Evolving brand and retailer partnerships in a mobile-first world

In today’s digitally-driven retail landscape where consumer expectations and behaviours constantly evolve, the onus is on brands to keep pace with marketplace shifts. So, when a major brand reassesses its way of doing business, it’s worth taking note.

Adidas, the global sportswear brand, has recently done just that, sharing with investors its decision to pivot away from a singular focus on direct-to-consumer (DTC) sales and redefine its relationship with retail partners instead.

Here’s a closer look at the retail dynamics and consumer behaviours changing the direction of travel for brands today.

Avoiding a race to the bottom

DTC has been an important part of the adidas strategy in recent years. But, as CEO Bjorn Gulden noted, the focus on DTC brought with it the danger of “introversion” and a race to the bottom mentality on pricing.

In a bid to avoid discounting and performance marketing dominating its direct e-commerce presence, Gulden states adidas will no longer attempt to optimise sales online. Instead, it plans to use its direct channels to talk to customers directly, build the brand, and optimise margins.

Embracing retail intelligence

Along with the switch in e-commerce, adidas will now redouble its efforts in retail. Firstly, by showing up in retail environments and making sure it looks attractive and superior to others in its competitive field. And secondly, by tapping into the strengths and local knowledge and insights of its trusted retail partners.

Why? Because it recognises retail partners – and their staff – can offer brands a wealth of hard-to-replicate insights that are invaluable for brands, including regional nuances and consumer behaviours. Listening to retail partners is a key tenet of the adidas brand strategy going forward.

Meeting consumers where they are – and want to be

The brand’s strategic pivot also acknowledges where today’s shoppers are. Although brands and retailers may often think in channels, shoppers do not.

Outform’s recent survey of the changing habits of consumers in the UK, USA, Germany and France, found that more than half of shoppers prefer a mix of both online and in-store shopping, especially those shopping home/DIY and consumer electronics. Beauty and lifestyle shoppers enjoy this blend of channels too, with an even greater emphasis on the store.

The research also highlighted the device-first attitudes of shoppers, regardless of where they’re shopping. More than three-quarters – a finding that continues to trend upwards year-on-year – want to be able to compare prices, understand product benefits and read reviews when they are in the store, and are happy using their mobile devices to access the information.

By integrating mobile-first in-store experiences into the retail environment, brands and retailers have a good opportunity to deliver what customers want, especially as there is a high level of comfort among shoppers in sharing personal data in exchange for enhanced services and experiences.

Joining the dots

When shoppers’ preference is to shop both in-store and online, mobile- and device-first, it follows that brands and retail should follow suit. adidas’ change of tack signals its recognition not only of the operational challenges of DTC but also customer desire for a multifaceted approach to retail.

It’s not the only brand to acknowledge this. As Michelle Gass, new CEO at Levi’s, recently put it: “Everybody needs to think like an omni-channel retailer” to thrive.

For the customer, the smartphone is where purchase decisions and shopping journeys converge. For brands and retailers, the physical store is where convergence typically occurs and where they can add value in a joined-up shopping journey.

So, what could this look like? Interactive experiences and convenient services are a must for in-store shoppers. Give shoppers innovative ways to discover products, ensure faster checkout processes for convenience, and bake in utility at every touchpoint. In doing so, brands can take a big leap forward in meeting the modern customer needs.

Does this mean the end for DTC?

Not at all. There has never been an overwhelming trend for DTC, despite the headlines and investor attention garnered by brands focused on selling directly to consumers.

Some brands are simply born DTC, while others are looking for retail distribution from the get-go. No matter how brands start up, the truth is there is often the ambition to go wider.

DTC or not may be the first step, but the ultimate aim is omni-channel. That’s where the most value lies. Because omni-channel done well not only demands a digital, mobile-first approach, it reflects the demand of today’s shoppers, and it calls for a strong collaborative relationship with trusted retail partners.