As eCommerce continues to thrive, many digital brands are flourishing in the online marketplace. However, there is a growing trend among these brands to expand into the retail space, and for good reason. Bridging the gap between digital and physical retail channels can open up opportunities, strengthen brand presence, and significantly increase sales.
While online sales are growing, the physical retail market still holds its relevance. Expanding into retail stores allows digital brands to reach a broader, offline customer base that may not have heard of them through digital channels alone.
Being on store shelves in high-traffic locations can boost brand recognition and provide an opportunity to introduce your products to new audiences. Retail presence can also elevate the perception of a brand, offering it credibility and legitimacy in the eyes of consumers. Plus, Millennials, while heavy online shoppers prefer to view items in person before making a purchase online.
Unlike eCommerce, where customers may take time to think and shop around, retail environments encourage spontaneous purchases driven by product placement and the shopping experience. When digital-first brands transition to physical retail, they can strategically position their products to catch the attention of shoppers who may not have planned to make a purchase but are enticed by what they see.
Expanding into retail doesn’t mean abandoning your eCommerce insights. In fact, digital brands can combine in-store shopping behavior with their online analytics to better understand customer preferences and trends. Tracking both online and in-store sales can provide valuable, comprehensive data on consumer behavior, helping brands refine their product offerings, pricing, and marketing strategies.
The benefits of being present in both digital and physical retail stores are multiplied when brands create an omnichannel shopping experience. With solutions like OrderEase, digital brands can sync their eCommerce platform and retail operations, ensuring that their inventory is efficiently managed and updated across all channels. This integration helps prevent issues like over-selling or under-stock, streamlines order fulfillment, and improves the customer experience by offering seamless transitions between online and offline shopping.
Retail expansion can also help build stronger relationships with customers. In-store experiences allow brands to interact directly with shoppers, building personal connections and offering a more tactile experience with their products.
Relying solely on online sales can be risky, especially if a digital brand is highly dependent on a few online platforms (such as Amazon, Shopify, or social media). By expanding into retail, digital brands can diversify their revenue streams and mitigate the risks associated with relying too heavily on any one channel. Retail can also serve as a safeguard during economic downturns or shifts in consumer behavior that might impact online sales.
For digital-native brands aiming to become more competitive in their industry, retail expansion is often a key part of the strategy. It allows them to compete on a larger scale with established companies that already have a physical retail presence. By showing that their products are worthy of shelf space in retail locations, digital-first brands can gain a stronger foothold in their respective industries and earn more attention from consumers and retailers alike.
While the benefits of expanding into retail are clear, the transition from digital-only to multi-channel retail can come with its fair share of challenges. One of the most significant hurdles for digital brands is managing the complexities of Electronic Data Interchange (EDI) when dealing with large retail partners.
EDI is a standardized method of exchanging business documents, like purchase orders and invoices, between systems without manual intervention. Large retailers often require suppliers to communicate via EDI for streamlined order processing and inventory management. Here's why EDI can be a challenge and how to address it:
For many digital-first brands, EDI may seem like a foreign concept. Each trading partner may suggest using their managed service provider (MSP), such as SPS Commerce, who can offer a dashboard to manually process EDI or ERP integration options, or the trading partner manages EDI internally and requires a direct connection to your system and there is no dashboard functionality.
Whether you work with their MSP or directly with the trading partner, the process is time consuming and costly plus each time you add another trading partner, you have to repeat all of the same steps. On top of that, each retailer may have different requirements for data formatting, communication protocols, and transaction types. This can result in significant upfront time and resources spent ensuring compatibility with each trading partner.
Without the right technology, configuring and managing these integrations manually or through outdated systems can lead to delays, errors, and inefficiencies, hindering the ability to scale operations smoothly.
Traditional EDI systems can be costly to implement, particularly for small to mid-sized brands. These costs can include setup fees, monthly subscription charges, and the need for specialized software or third-party service providers to manage the EDI transactions. For many digital brands, these expenses may seem out of reach or unjustified if they're only starting to test retail markets.
When handling large volumes of transactions, errors become inevitable—especially when managing multiple data formats across various systems. EDI integrations require precision in translating data between systems to ensure everything, from inventory levels to order statuses, matches up across all channels. Without a reliable EDI system in place, mistakes in pricing, order quantities, or shipping information can occur, leading to delayed shipments, stockouts, or unhappy customers.
A minor mistake in an EDI transaction with a large retail partner can lead to bigger consequences, such as chargebacks or damaged business relationships. Ensuring that all systems are properly synchronized is crucial for avoiding these issues.
A major challenge of retail expansion is ensuring that data flows smoothly between digital and retail channels in real-time. Brands need to have their inventory and orders synchronized across multiple platforms—whether it’s their eCommerce site, retail stores, or marketplace listings.
EDI requires constant monitoring and maintenance to avoid discrepancies. For example, if a brand’s inventory is updated in real-time for one channel but not for another, it can lead to overselling, delayed shipments, or missed sales. Without a system to manage these updates, brands can struggle to keep operations aligned.
At OrderEase, we understand that EDI can be a significant barrier for digital-first brands looking to expand into retail. That’s why we’ve built solutions that simplify the integration of EDI into your business processes, saving you time and reducing errors.
Expanding into retail doesn’t have to come with the headache of managing complex EDI systems. With the right tools in place, digital-first brands can take advantage of retail opportunities while keeping their operations efficient, error-free, and cost-effective.