The direct to consumer trend is one that ‘needs to be taken more seriously’ by the UK’s independent retailer network, toy shop owners have warned, as consumers and manufacturers have grown increasingly comfortable with bypassing the middleman.
A movement that has been bubbling away for the past few years through the retail and shopping applications implemented through social media platforms such as Instagram and TikTok, fears have begun to surface that the direct to consumer method is increasing at an alarming rate, to the point where independent retailers will ‘struggle to find a place in the post-pandemic world of consumerism.’
The past year of social restrictions, stay at home messaging and the surge in online shopping has helped to fuel a stark rise in brands and manufacturers adopting their own direct to consumer methods, whether that is through social media or their own online operations, in order to engage directly with and get their product in the hands of their customers.
Once used as effective marketing tools of putting brands and products in the homes of consumers, platforms like Instagram and TikTok have begun to take strides in the ecommerce space with applications that enable users to shop directly with brands.
“I think this is a major trend and not likely to be reversed,” says Wendy Hamilton, owner of the Scottish independent retailer, Curious Minds. “It’s been happening increasingly for the last decade and gathered momentum over the last 12 months.”
According to the kids, tweens, and teens market intelligence specialist, Kids Insights, direct to consumer retailing is set to become a major trend for 2021; one that was set in motion well before the on-set of the coronavirus pandemic, but has witnessed substantial growth as a direct result of it.
In its 2020 Industry Report, the group identified that more than half of businesses predicted that their direct to consumer revenue would increase significantly on 2019. It also observed that in the UK, the number of six to 18 year olds spending money online grew by 29 per cent year on year, indicating the vast potential that direct to consumer has for brands in the toys and entertainment sector.
The pandemic and the widespread closure of physical retail over the course of 2020 of course fuelled the need for brands to adapt. In the toy industry, both Hasbro and Mattel expanded their direct to consumer operations in order to meet the growing demand for ecommerce, while others have been implementing strategies through social media to pick up the slack in brand engagement.
A movement born out of necessity, the wider implications of the growth of this trend haven’t been lost on the independent retailers still fighting off the advances of online shopping from their local high street locations.
Hamilton, adds: “During Christmas, I saw one very respectable, high-end manufacturer selling, via sponsored adverts on Facebook, at cheaper prices than their wholesale indie customers could buy.
“They were in direct competition with their own retail customers. It’s easy to understand why they would do this, they’re struggling too and it’s a question of survival, but a sore one for their previously loyal indie customers.”
A trend that at first appears inaccessible for the independent retailer to move in on, the era of social-shopping hasn’t completely cut out the traditional shopping culture. Late last year, the US retail giant, Walmart embarked on a pilot initiative with the social media platform, TikTok to host a live shopping event.
A first of its kind, the event enabled viewers of Walmart’s live-streaming TikTok video to ‘live shop’ for items worn and displayed by influencers working in partnership with Walmart. Piloted applications allowed audiences to tap on the items they were interested in, they would then be taken to a shopping cart where they could purchase the items, all without leaving the TikTok app.
At the launch of the pilot event, Walmart chief marketing officer, William White, said: “We have shortened the distance from inspiration to purchase by making it shoppable. The TikTok community will be able to tap on a product when they see a Walmart fashion item they like during the event.
“We’re excited to engage with TikTok on this experience and learn what’s possible for shopping on a platform that brings its community so much joy.”
The issue remains, however, that success in this new era of ecommerce will be afforded to the brands with the largest audiences and social media power, and not to the independent store that relies on its local network. Curious Minds’ Hamilton says it’s a phenomenon that all indies should be taking very seriously.
“It’s going to become more and more common,” she says. “I’m not sure indies can do anything about it; with the increasing comfort in online retail by the public, the company who owns the brand controls the market place and the pricing, the need for a network of smaller retail businesses throughout the land is diminished.”
Despite the surge in this direct to consumer trend, large swathes of the physical retail industry maintain that their position will go relatively unharmed. At the start of the year, experts from the retail industry think tank KPMG/Ipsos gave reason for the sector to look towards a brighter future in the second half of 2021.
Among the reasons why, it stated that pent up savings and demand from consumers forced to stay at home and away from the physical retail space will fuel a ‘much more prosperous second half of 2021.’
In its Outlook for 2021 report, the think tank highlighted that a shop local mentality that helped buoy independent retailers to a successful Christmas trading period given the circumstances will be maintained, as consumers turn to the convenience of the high street and local shops over the trips to larger cities or more crowded shopping destinations.
Amanda Alexander, owner of the independent toy shop, Giddy Goat Toy Shop, says: “Some of my suppliers are already providing a direct to consumer shopping option, and because of lockdown, indie retailers can no longer claim the advantage of providing an opportunity to showcase products and recommend them.
“However, I think ultimately, there is still a place for indie retailers. Unless a customer knows exactly what they want, online shopping can be confusing and overwhelming and many people like to look at different options and speak to someone knowledgeable.”
Going one step further, Alexander also believes there is opportunity for indie retailers to jump on the social-shopping trend of contemporary consumerism.
“We can get in on the act and engage with both suppliers and consumers through the use of social media and through being able to (eventually again) offer our stores as places to showcase products,” she tells ToyNews.
“The smart suppliers realise that shifting lots of units to a store that will get repeat loyal customers is easier than continually shipping individual units to single purchase customers, so I don;t think they will move entirely to a B2C model.
“We just have to make sure our shops are appealing to both suppliers to showcase products and to customers to browse and consider product options.”
It’s clear, however, that whether it’s at the hands of ecommerce or not, retail will have to evolve to new consumer sensibilities upon its full re-emergence from this pandemic period, and Alexander is already talking about the future role that the indie toy shop will have to place within its local community.
“Experiential shopping is where we come to the fore with the promise of a personal shopping experience, demonstrations, recommendations, and the sense of connection we offer the customer,” she says. “So long as we can offer a pleasant and positive shopping experience, we have that advantage.
“However, I do feel strongly that unless your shop is large enough to be a destination retailer, we are best positioned to survive when we are part of strong trading communities and areas that have other good indie retailers offering groceries, gifts, cafes and bars are going to be in the strongest position to do well in the months and years ahead.”
It will then be in the translation of this, engaging an audience on a local level, through which the indie retailer believes it can make a success of its online proposition.
Lisa Clay, owner of Armadillo Toys, says: “I feel my most important online market is still a more local one. The vast majority of my online sales were for click and collect, so I am very happy we are still allowed to do this. The use of social media to link to the website will be more crucial than ever.
“I am a traditional brick and mortar shop, it’s what we do best. I love the engagement with parents and children, seeing happy faces and all the rest that goes with real shopping. The online side of my business is supplementary to the shop, and I don;t think it will ever be the other way around.”