How to Expand Your E-Commerce Brand into Retail & Make More Sales
A conversation with Kevin Joseph founder of Perpetual CPG.
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In today's competitive marketplace, direct-to-consumer (D2C) brands are increasingly exploring the retail sector as a vital component of their growth strategy. I sat down with Kevin Joseph, a retail expert, to discuss his experiences and insights on how D2C brands can successfully transition into retail. Here’s a dive into our enlightening conversation.
Understanding the Retail Landscape
Kevin's extensive background in retail—from large corporations like PepsiCo to startups—provides a unique perspective on why D2C brands might consider retail. One of the primary reasons is profitability. Over time, the cost of consumer acquisition for online sales can skyrocket, leading brands to seek more cost-effective channels like retail.
Benefits of Retail for D2C Brands
According to Kevin, retail offers several advantages. It allows brands to reach a wider audience that may not shop online. Additionally, retail presence often leads to a surprising uptick in the brand’s D2C sales, as consumers discover products in stores and pursue them online. This dual presence can boost a brand’s overall market exposure and profitability.
Challenges New Brands Face
For startups with limited online presence or struggling to move inventory, entering retail seems like a quick fix. However, Sandy notes the importance of strategy and understanding operations. Kevin emphasizes that while D2C offers full control over the brand, retail requires adaptability, collaboration, and an understanding of shifting dynamics and expectations.
Building the Foundation for Retail Success
Kevin advises brands to start preparing early—at least a year before their intended retail launch. Transitioning from a D2C setup to a retail operation involves changes in operations, cash flow, and marketing strategies. Retail is complex, with distinct cycles and requirements that necessitate careful planning and execution.
The Retail Journey: A Step-by-Step Guide
Kevin shares the process of launching a supplement brand in a major retailer like Whole Foods. This involves analyzing the product category and competitive landscape, understanding the product’s profit-and-loss statement (P&L), and adjusting the product offering to fit retail expectations—right down to packaging compliance.
Operations are crucial, and brands must ensure their logistics, supply chain, and product specifics align with retail demands. Once these are set, a convincing sales pitch to retail buyers follows. Successful entry into retail is just the beginning; maintaining that retail relationship requires diligent fulfillment of demand and managing inventory effectively.
Funding the Retail Expansion
Expanding into retail often requires funding beyond what brands might manage alone. Empirical advice suggests several routes for securing necessary funds, including investment-backed growth, leveraging existing successful sales channels, or riding a consumer trend.
Expert Advice and Consultation
As Kevin points out, the complexities of retail demand expertise. Brands are encouraged to seek guidance from those with proven success in retail environments. The cost of missteps can be high, and experienced consultants can prevent financial losses and help navigate challenging retail landscapes. Retail offers unprecedented opportunities for growth but requires strategic planning and execution.
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