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  • Vanessa T.

Retail Is Back In Vogue

What's old is new.

History repeats itself.

What goes around comes around.

There is nothing new under the sun.

I can't believe I've been around long enough to see the role of retail in CPG come full circle.

The rise and fall (and correction) of DTC has been well-documented.

High customer acquisition costs, limited scalability, subscription fatigue, consumers' preference for a tactile experience of in-store shopping, yada yada yada - are just some of the limitations.

We learned DTC is not a business model, but one of several sales channels. It's a way to go to market, but not meant to be the only market. We learned DTC is not a tech-startup (can anyone really say they are surprised?) nor does it deserve a tech startup valuation.

So where does that leave us?

DTC is still a valuable way to launch a new brand. It continues to lower the barriers to starting a CPG business (non-perishable, that is) than in years past when you could only rely on retail or food service channels both of which have long lead times and a high risk of failure in the early days. Now you can shift that risk to an environment in which you control and can use to prove product-market fit and build traction.

7 Things You Can Prove Out on DTC Before Going Into Retail

  1. Is there consumer demand for my brand and products, and what is the consumer profile of the person actually buying my products?

  2. Have I set my retail price correctly?

  3. What are the product improvements needed to improve user experience? Every CPG startup changes its product and packaging within the first year of business (and more times after) so the quicker you learn what needs improvement, the better you are.

  4. What are consumers' path to purchase? Which marketing levers, media platforms, marketing messages, and creative content are most effective in driving site traffic and sales conversions? What is the ideal marketing mix to scale further and with more efficiency?

  5. What is the ideal product assortment? Which SKUs sell best and which SKUs can I discontinue?

  6. Do I have repeat purchases and signs of loyalty?

  7. Am I able to build an audience (email list, social media followers, etc) effectively and inexpensively?

Not only does the above de-risk your business and give confidence in expanding into retail, but it also arms you with the key ingredients for your retail pitch to convince retailers your CPG brand is retail ready.

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