In another GreyScout blog, we talked about how the exponential rise of e-commerce over the past decade has seen authorities throughout the world ramp up their efforts to combat the ever-rising issue of counterfeit and grey market selling issues such as parallel imports within online marketplaces.
So, how does this impact brands operating in the e-commerce space? Essentially, in these times when eCommerce Marketplace sales is seeing exponential growth globally.
How to Fight Back with Tighter Controls
You’ve poured your heart and soul into establishing your brand as one that delivers high-quality products with integrity.
Moreover, you’ve worked tirelessly to maintain your reputation by carefully selecting quality Amazon resellers and brick-and-mortar retailers who meet your brand’s high standards to distribute your product.
Without a well-executed and monitored selective distribution model in place for your business, the products and brands you worked so hard to build and protect could end up on these nefarious websites, tarnishing your brand reputation in the eyes of consumers forever.
Selecting a Distribution Model
There is a wide range of distribution models, but businesses operating in the e-commerce space typically adopt intensive, selective, or exclusive models. The strategy a business employs depends heavily on its growth goals.
Here is a quick breakdown of these three distribution models:
What is Intensive Distribution: This model supports rapid growth by getting products to as many retail outlets as possible. The goal here is to penetrate the market aggressively and get your product maximum exposure.
This model ensures customers interact with your products throughout their consumer experience – at every touchpoint. From convenience stores to department stores, your product will be front and centre.
What is Selective Distribution: The opposite of intensive distribution – which often sees products distributed directly from manufacturers to consumers to reach as many outlets as possible – selective distribution sees a product for sale in only select retailers in specific locations.
While the idea of getting your product out to as many people as possible with an intensive distribution strategy might seem ideal from a market penetration perspective, it is risky.
With a selective distribution model, a business selects a limited number of authorized distributors that can sell the products to retailers who meet a strict set of criteria.
What is Exclusive Distribution: The exclusive distribution model is the way to go for brands looking to maintain an aura of exclusivity. This model ensures that a brand is only available at select retailers to maintain a brand’s image.
For example, Brands like Nespresso typically only make their coffee pods available for purchase at their chain of boutiques and at select retailers that fit their brand image – such as Bed Bath and Beyond. Meanwhile, Nespresso pods are typically not available for purchase at department stores such as Wal-Mart or grocery stores.
How do you Deploy Selective Distribution?
Working with your product’s distributor(s), an agreement must be made that puts in place strict measures to protect many aspects of the brand, including product presentation and marketing, the quality of the website’s retail experience, and other factors.
For example, To protect consumers, a brand might restrict the sale of its products to e-commerce vendors that are not registered with a Verisign seal or other “trust mark” or websites that are not on their official list of authorized resellers.
This is all monitored on the brand’s end, with enforcement backed by legal measures, including termination of the distribution contract for non-compliance.
The Bottom Line
A selective distribution strategy sounds like a no-brainer for brands looking to protect their products from ending up in the wrong hands. However, compliance on the part of distributors and vendors can be a challenge.
This is where e-commerce brand protection and monitoring tools like GreyScout come in. By performing dynamic scanning across eCommerce marketplaces like Amazon, eBay, and Google Shopping, brand protection software can alert brands of precisely who’s selling their products so they can take any necessary action if a distributor does not comply with the terms of a selective distribution strategy.
By monitoring distributors, brands can gently remind them of the agreement to get products off the shelves of unauthorized retailers before making it a legal issue and terminating the contract. With this distribution strategy, brands can protect the product’s consumer perception.
As shoppers move to online shopping, more potential customers are going to come into contact with your brand. Hence, It’s critical to safeguard the customer experience by ensuring your products are distributed to the right vendors with a solid selective distribution approach.
