Looking back to the last 15 years in business, I believe there are a few aspects that made our own brands successful and these are certainly aspects we can young, striving brands also encourage to do.
Find your niche: We first started out selling DJ equipment on eBay, followed by other platforms. Fast forward a few years, and we work with a range of strong brands within very different sectors – kitchen appliances, home and gardening, audio etc. But each of our brands is unique in its own specific niche.
Use multiple channels: Amazon is a great partner for us, which enabled us to grow at a fast pace and to maintain that pace today. Without Amazon, that would not be possible. But ecommerce goes far beyond Amazon. Brand owners should never think in one channel and rely on that alone, but always think omnichannel instead. Always be where your customers are!
Work hard on your product descriptions and imagery: Good product descriptions are key to getting discovered by online shoppers. It may sound obvious, but many providers still struggle with good copy outlining their products. With some extra effort in this area, smaller brands can easily differentiate themselves and stand out. Always think about how much love you put into developing the product; show that love in the text you are writing. Bring that passion across to the consumer. Following that a good description is completed with great imagery - ideally with the product in use.
When you feel growth is slowing down, initiate partnerships: Know your own strengths and weaknesses. If you feel your team is its capacity, get a partner in the area where you struggle. The brands I talk to often felt like they were reaching the roof soon.
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Insight into omnichannel ecommerce and other new evolutions
For us at BBG, omnichannel isn’t new. I always wanted the company to be on channels where our clients are. While some might get inspired and end up buying on Instagram, our parents rather buy in more traditional online stores. I have always loved the variety of ecommerce.
For example, despite the importance of Amazon to the entire ecosystem, and while it certainly tops the list of most-visited online stores in the UK, Ireland, Germany and France, it doesn't even make it into the top five for booming ecommerce countries like the Netherlands, Denmark and Sweden.
There, consumers are spread out among a handful of online retailers specializing in product categories, like H&M, Zalando or Bol, as well as several other national online retailers. Even in the countries where Amazon leads the online market, smaller domestic retailers occupy an important place in the landscape.
I have always found our own DTC channels are an extremely important backbone of our growth. Channels like Amazon are an excellent partner for an ecommerce company, but relying on one distribution channel is always dangerous.
The challenges of scaling a successful online retail business
That’s what we did over the last 15 years – scaling our self-built 14 brands like Klarstein.
Scaling is incredibly challenging. To be able to scale, you need an outstanding team and technological instruments, as well as knowledge of the market. I am happy that we are now able to cover all three elements, but scaling still requires hard work and dedication.
Since starting to acquire also external brands last December – and scale these – we need to repeat what we’ve done in the past. But with the resources we have we see progress in making small brands successful in more markets, on more channels with more products.
Why D2C ecommerce has become the consumers’ choice in 2021
Users have become much more attentive to the origin, manufacture of products and customer service of brands in recent years.
On the one hand, this results from a more conscious zeitgeist, but on the other hand also from the relationships that brands build with their users through various channels.
This also includes attentive customer service, strong brand communication and quality products. D2C brands have simply become better at creating customer loyalty, which we can now see reflected in consumer behaviour.
The supply chain challenges ecommerce companies have faced over the last year
We live in a globalized world, with fast and complex production and transport routes. When the pandemic hit with full force, it became clear how vulnerable our globally connected systems are, logistics being the most sensitive part of that.
A massive slowdown in production in Asia directly affects consumers in Europe. You need to manage supply chains and always adjust in a smart way, and that is where data can help.
What we’ve learned during the pandemic, in particular through the Suez canal blocking: having real relationships with suppliers massively helps to maneuver around troubled water (no pun intended).
After 15 years in the market, with long-term partners along the way, we have learned how to be fast and flexible. For a newer player on the market, especially with no own logistics, that’s almost impossible. This proves to us once again that our own logistics are key to success, not only in Europe.
Outlook for the coming decade and beyond
People around the world respond to strong brands, but they are not limited to single platforms.
This has always been the case throughout the history of retail – and it will continue in the digital age. Today, we see large retail groups like Unilever, Procter & Gamble, and Whirlpool bringing together the world's most popular consumer brands under their umbrella.
This "House of Brands" business model is also what will allow large, digital retail groups to keep growing and play on the global field alongside Amazon. The question is, who will build the next successful House of Brands and which brands will be able to prove themselves and scale away from their existing channels and domestic markets?
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