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~ ChannelEngine ~

t is still in its infancy when looking at the How have recent e-commerce trends changed the
penetration of the total retail market (16% in classic distribution model?
I2019). Still, it is continuing to grow faster than In days gone by, brand owners and manufacturers followed
ever, as retailers are scaling up, embracing new sales the traditional distribution model, which meant working
channels, and brands across the globe are finally through agents, distributors, and wholesalers to deliver
taking the leap to go direct-to-consumer (D2C). their products (stage 1). Such a one-way journey was pretty
Last year, the pandemic further accelerated the shift stable: once a deal was done with a retailer, manufacturers
to e-commerce, reportedly by up to 5 years in some felt safe knowing that a revenue stream was coming in for
regions. sure.

The e-commerce landscape is rapidly evolving and In recent years, agents have mostly disappeared due to the
shifting to marketplaces. Large retailers are turning into rise of B2B e-commerce (stage 2).
marketplaces, entirely new marketplaces are emerging, and
social media and search engines are becoming transactional. With the rise of marketplaces, both retailers & e-tailers
This provides a lot of cross-border opportunities for any have started selling to consumers via marketplaces and have
company selling products. However, it also creates new launched private label brands, turning them into brand
complexity in managing all these new sales channels. owners (stage 3).

More than half of all e-commerce sales are already taking Many brands and distributors were already shipping
place on marketplaces. This trend will keep growing, leading products to the end consumer and are now taking control
to an expected 75% of global online sales going through a of their product distribution and sales through direct-to-
marketplace or drop-shipping model. For companies selling consumer webshops and by directly selling on marketplaces
products, it’s essential to connect and manage all these (stage 4).
diverse sales channels through a centralized system that is
fully integrated with their internal systems.

What are the core challenges of the current distribu- all channels. Finally, resellers, product availability, and price
tion chain? levels should be monitored and controlled.
Many brands experience a lack of control in managing all
the sales channels out there because they can’t fully control Distributors and retailers fight to boost their revenues with
the content to make sure it’s complete, attractive, and in line better margins and look for the right service to enable them
with brand guidelines. The same goes for the product range, to sell a higher volume of products, creating an economy of
which needs to contain the latest product lines available on scale, wherever customers are searching for them.

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