Products have needs.
And when their needs are not met — they are unhappy (read “unprofitable”). We see a lot of happy products flowing through our operations HQ in Kentucky every day. They are protected, tracked, packaged for e-commerce, and a good fit for the Amazon fulfillment model. But we also see many unhappy products when scanning e-commerce retail channels.
A product could look past feeling out of place if it were at least profitable along the entire value chain — for the manufacturer, the retailer, and as surplus for the consumer (a kind of consumer profit). A product may be asking to be on the shelf where it can do what it was meant to do or else be given better attributes to succeed in this new world: e-commerce-ready packaging, flatter form factor, and lighter. This becomes obvious when assessing shipping cost for particular fulfillment models.
The allure of forcing a product through a fulfillment model that shouldn’t work comes from a false sense of success as parts of the chain are able to absorb the losses in favor of greater gains elsewhere. That creates a supply chain lock-in that in turn leads to lack of reinvestment and loss of leverage as it relates to brand building, control, and longer term success.
What to do? We recommend that brands look at their options in the context of what customers need and what their products need. Look at your products through an e-commerce lens — whether they are fulfilled by Amazon (FBA) or any option (FBx), the same logic applies: Do the profitability and volume support the amount of investment needed to be sustainable along the entire value chain?
Where do your products fall today? Are they in the optimal fulfillment scenario that enables growth for the brand? Then ask: What can I do to create mobility in the system? What is needed in terms of packs, packaging, assortments, or pricing architecture to make it work? What will make the product happy?
Brands benefit from looking at product needs, too:
Consumers need engagement:
Meet consumers where they are. Brands confront a shifting landscape driven by consumer behavior, technology, and the interconnectedness of physical and digital platforms. Consumer paths to purchase include a complex mix of physical and digital touchpoints. Successful brand strategies require unprecedented alignment across consumer preferences.
Brands need options:
Control, flexibility, and growth. In an interconnected retail environment, brands that have control and visibility can reinvest in products that are meaningful to consumers and allow relevant physical and digital platforms to support the business strategy.
Products need profitability:
One size fits no one. E-commerce is unprofitable for a significant number of discovery and fulfillment scenarios. Products have needs, too, and e-commerce is rewarding those products that are channel-ready and hurting ones that are forced through models that don’t work.