Whether your business is large or small, it’s essential to consider how you will get your products to customers.
Will customers buy your products primarily online? Will most of your sales be to in-person shoppers? Will you connect at trade shows with other retail businesses selling your products to people? What if there’s a mix?
As you work to get your products in front of customers' eyes and into their hands, it’s essential to go in with a plan — a retail distribution strategy.
What Is a Retail Distribution Strategy?
A retail distribution strategy is how you’ll get your products in front of customers, which can vary depending on your business model and ideal customer.
In a retail distribution strategy, products go through a retail distribution channel. This retail distribution channel includes the different parties — including the manufacturer, retailer, third parties, etc.
You won’t always get your product to the end user directly — for instance, if you sell products wholesale to other businesses, they would be the retailer getting the product to the end user.
Different Retail Distribution Channels
You can use many retail distribution channels as you determine your retail distribution strategy. Many businesses may have more than one retail distribution channel in their strategy.
Direct
In direct retail distribution channels, you sell products directly to the consumer.
They go from your wholesaler, full-service printer, or store to the customer. There’s no third party making the sale — although a third party may help ship/fill the order and hold the physical product inventory. The end customer pays your site or store directly and receives the product.
- Store: If you own a brick-and-mortar retail store, you sell products to customers directly in person.
- Website: An eCommerce business can be a great, inexpensive way to sell directly to your target market.
- Social Media: Facebook Marketplace and Instagram are two popular direct distribution channels that appeal to customers now.
- Third-party Marketplace: If you sell your products on Etsy, eBay, Spoonflower, or a similar site, you’re selling directly to end customers.
Indirect
In an indirect retail distribution channel, you sell or give your products to another retailer or distributor that makes the sale to the end customer who will purchase that product.
- Wholesaler: Your business may operate as a wholesaler and sell products to brands or companies that sell the product to their customers. Therefore, selling products to customers as-is, or some form of private label or customization.
- Retailer: You may sell products to other retailers — large or small businesses—that operate in-store or online.
- Distributor: A distributor sells products to retailers in their established network and encourages them to buy products to sell in-store.
When doing indirect distribution, this can be intensive, selective, exclusive, or dual.
- Intensive: In this model, you sell products to a wide range — and as many retailers — as possible to expand your market share.
- Selective: In this channel, you only sell products to select retailers. You may have specific criteria for the retailers or sites that sell your products to fit your branding.
- Exclusive: With this channel, you may only sell your products to a single specific retailer. This model is especially popular with luxury markets and brands that are hyper-specific about their distribution strategy.
- Dual: Your company uses a mix of distribution channels.
Choosing the Right Retail Distribution Strategy for Your Business
With so many distribution channels, it can be overwhelming to determine the proper distribution strategy. However, follow a few simple steps to plan your distribution strategy and successfully make sales.
1. Define Your Target Market
To successfully appeal to customers, you must know your target customer.
Are you selling to your end consumers directly? Or is it better to widen your scope and sell to successful retailers who can get those products in front of your target market?
What are some defining characteristics of your ideal customers? It can help to set up a couple of “characters” which fit your target market demographics.
Defining your target end consumer can help determine your business's best retail distribution strategy.
2. Determine the Best Distribution Channel to Get Your Products to Customers
Once you know your ideal customer, you can set a plan to get products to them — directly or indirectly.
If your ideal customer is a tech- and social-media-savvy Millennial or Gen Z who will likely discover your products on social media, a direct eCommerce site may be the best way to get your products to them.
However, if your ideal customers are Gen X parents shopping in-store products, consider direct retail or indirect retail distribution channels for your company's most lucrative channels.
If your customer base varies, or if you have multiple distribution channels that will work well to get your products to your target market, that’s okay! However, ensure you have a well-set plan and systems to get your products to them.
3. Ensure Your Distribution Channel is Set for Success
Once you determine your target market and have defined the distribution channels that will help you successfully get your products in front of customers and into their hands, it’s critical to ensure success.
For example:
- Are there any bugs on your eCommerce site that need improvement?
- Do you have a functioning, dependable POS system to ring customers out in-store?
- Do you have the proper certifications to sell your products wholesale to other retailers?
Be sure to brainstorm any logistical snags or errors that may cause potential problems for you or your customers. Once you smooth them out, you’re ready to optimize marketing and get your products in front of customers.
4. Optimize Your Marketing Strategy
Marketing can be an investment, especially for small businesses — but it doesn’t have to be.
Social media and SEO optimization are inexpensive ways to draw customers to your site or store.
Social Media
Whether your audience is other retail stores or end customers, having a robust social media presence that reflects your products and branding is crucial. Be sure to optimize your profiles and posts with relevant keywords.
If you have a brick-and-mortar location, use your town and other surrounding areas on your site and profile to boost your reach to locals.
Also, consider the platforms your target audience is most likely to use. For example, TikTok is increasingly popular, especially with younger generations, while older generations may lean more toward Facebook. Instagram is an excellent all-around platform for clothing retailers.
You can leverage paid posts to push your content to your target market, but it’s not necessarily a must-have.
SEO Optimization
Search engine optimization (SEO) can be critical in getting your products in front of the right customers. As you build and modify your site, use relevant keywords related to your product, brand, and location (if selling your products in physical stores).
If you’re using a third-party site like Etsy or eBay, optimize posts and have your shop profile filled out entirely with relevant keywords. However, be sure not to do keyword stuff — if you try to pack your site full of a bunch of keywords that don't sound organic, you'll get penalized and get pushed down in results.
Also, be sure to update content regularly and keep it up-to-date. In addition, this will ensure that customers can find the most relevant information and tell search engines your site is active.
These steps can help push your content to the top of the search engine results page and help get your products in front of your target market.
5. Build Customer Relations and Encourage Repeat Sales
While you naturally want to expand your market reach and share your products with new customers, maintaining positive relationships with existing customers is just as — if not more — important for your business.
It can cost a business 5 to 10 times more to acquire a new customer than to sell to an existing one. Plus, existing customers spend an average of 67% more than new customers.
Ensure your customers — direct consumers or retailers — are happy with your products. If a problem arises, do what you can to solve it quickly. For example, consider incentivizing existing customers to make repeat purchases with updates on new products, occasional coupons or sales, and loyalty programs with perks.
Keeping your customers happy will make them want to come back for more — which will help you keep your distribution strategy running smoothly.
6. Scale Your Strategy
As you successfully implement your retail distribution channel, you want to expand your business. Scaling your strategy is vital to help you extend your reach and grow your bottom line.
The strategy can look different if you want to expand to other distribution channels or broaden your existing ones.
If you sell your products directly to consumers in-store or online, consider going wholesale and getting your products in other retailers’ stores. Or, if you want to expand your product offering, consider sourcing products from a qualified wholesaler like Bella + Canvas.
Working with a qualified company can be a great way to sell blank, customizable products to other retailers and grow your bottom line. You can even work with one of Bella + Canvas’s full-service printers or embroiderers to sell products in various colors with custom prints, graphics, and other designs.
Working with a wholesaler takes a lot of the weight off your shoulders and is a great way to scale your retail distribution strategy.
Setting a Successful Retail Distribution Strategy
Creating a successful retail distribution strategy is key to successfully getting products into customers’ hands.
Whether you sell DTC or go indirectly through retailers, ensuring a solid strategy will help you maximize sales and grow your retail business. Get started with your retail distribution strategy today!
Author Bio:
Pranjal Bora work as Head of Product Development at Digital Authority Partners.
