Manufacturers test the Web for direct sales
Manufacturers are testing the Web for direct sales; some are finding success
MAYTAG'S DONE IT. So has Bose. Nike, Mattel, and Sony have done it too. All these consumer product manufacturers have sold direct online one way or another.
At the dawn of the Web, manufacturers discovered they could promote their products on their own sites, controlling the branding, marketing, and merchandising experience. In recent years, some have taken that promotional capability a step further, offering a selection of their products for sale online, direct to consumers -- without the retailer.
The prospect is tempting for manufacturers. Cutting out the middleman -- retailers -- gives them more profit. It also gives them the opportunity to collect more information and have more control in those all-important relationships with their customers.
But because online sales make up just a fraction of overall retail sales, manufacturers have tiptoed around the issue. Some are selling only custom-built products online. Others are selling a small portion of their total product line. All are very aware of the colossal failure of fellow manufacturer Levi Strauss in its foray into direct sales online.
As part of its online sales initiative, the manufacturer of jeans and Dockers prohibited some of its retail partners from selling Levi's products online. Those retailers, a little peeved at the move, promoted their own product lines rather than vaunting the Levi Strauss brand. And Levi's, already struggling to reach its target market of teens and young adults, eventually realized the channel-conflict headaches were more than it could handle. The site shut down after a year.
Other manufacturers have heeded the lessons learned by Levi Strauss. Many avoid selling direct online, instead offering information about the stores that sell their products. Braun and Sonicare are two examples.
Others offer product samplings for sale online. Sony sells some of its consumer electronic products online at SonyStyle.com. Mattel offers portions of several product lines for sale at its site, including Barbie and Fisher Price.
And some manufacturers, following the PC tradition, offer custom-built products on their sites. At Nike.com, consumers can design their own shoes, choosing colors and even adding words such as "Air Kate" to the back of the shoe.
One new site, still in its pilot phase, lets consumers design their own breakfast cereal. MyCereal.com uses the tag line "Incredible cereals that don't exist until you help create them." The General Mills site isn't live to the public yet. But what a concept.
What next? Custom-made vitamins, designed to offer the nutrients that your particular diet doesn't provide? Colognes created by e-shoppers,combining the scents of jasmine and tobacco that evoke college days?
Or how about this one: desktop productivity software -- word processors, e-mail, and spreadsheets that allow you to select the functionality you need, making only a small footprint on your PC.
Some manufacturers are mitigating the channel-conflict threat by working with third-party vendors to create solutions that still enable them to sell via the Web sites of their retail channel partners. By choosing this option, manufacturers control the look and feel of their merchandising message and can avoid getting into the hassle of creating fulfillment operations for single orders.
Whatever option a manufacturer chooses to sell online to consumers, it's clear that this is an evolving market. The way things are today won't be the way they are tomorrow. Manufaccturers and retailers will continue to test different approaches.
Just like the consumer or business PC market and the travel industry, the consumer products market will undergo profound changes as more manufacturers explore the power of the Web for both promoting and selling their products.
The introduction of more technologies such as Web TV and online devices for the general consumer market will only hasten the rate of change, bringing more consumer dollars to the online sales channel.