A recent trend in retail is making waves in the industry. Manufacturer to consumer retail (M2C) is helping new brands enter a competitive space and consumers are adopting it faster than could have been imagined. M2C companies espouse high-quality products at lower prices because they make direct relationships with manufacturers rather than working through the traditional importer to brand to buyer relationships. With the rise of mobile tech for retail, companies in the M2C space are leveraging technology to increase their reach. The following are 3 consumer trends that are helping drive the success of this growing segment.
Moms have traditionally been the lead household consumer. Because moms control 85% of household spending countless retailers have set their sights on effectively marketing to them to grab a share of that spending. McKinsey&Company recently reported that 72% of moms are "looking for ways to save money." M2C offers the opportunity to shop with ease while saving money. By cutting out the middleman, which is what traditional retail functions as, these companies can return savings to the consumer. Albert Wang, CEO of PatPat, a manufacturer to consumer brand for moms, shares how his company started as an effort to make shopping better for new parents. "We started when my co-founder had a child and realized the expenses involved in obtaining quality products for babies. We decided that there had to be a better option for parents, which drove us to look into the manufacturer to consumer model." When a retailer/buyer purchases a product from a brand or an importer there is little that can be done to trace down the manufacturing practices that generated the garment. M2C brands, however, have very close relationships with manufacturers and as a result, they can guarantee a higher level of quality while maintaining pricing that undercuts traditional retailers. Entrepreneurs in the M2C space are part of a growing movement and consumers are responding by shifting purchasing habits away from brick and mortar retail stores.
While big box retailers like Target and Walmart have mobile apps, they tend to get bogged down with features geared toward getting you inside the store. Mobile savvy shoppers are looking for quality products online, and shopping via a mobile app allows them to save time and make more informed purchasing decisions. Flurry Mobile's research found that users spend 90% more time in mobile apps compared to mobile browsers. In response, many M2C companies are starting out in the app store before they create a normal website. The upside is as retailers catch on, consumers get more control over the efficiency of their shopping. M2C thrives in the mobile space because the model depends on direct purchasing from online consumers.
The same McKinsey report found that 74 percent of moms would continue buying less expensive options that they liked even if it was not a brand that they recognized. This means that there are big opportunities to take market and customer share from big box retailers. Because most M2C companies still sell branded merchandise, it provides moms with the option of brand loyalty at a lower price. This is also why most M2C companies tailor their products and shopping experiences to women and moms. "In our experience, Mom's have been an incredibly engaged consumer group. By creating social communities for sharing, focusing on the right product mix, and creating intentional customer service initiatives, we've had success connecting with mom's in the M2C space." Wang explains. If you search manufacturer to consumer brands online, you will find that a majority of them serve a female audience. As these trends make it easier for manufacturer to consumer brands to enter the market, it is important to remember that innovation and solving a need in the market are what drive the success of fledgling companies. M2C companies are well positioned to take increasing percentages of market share from traditional brick and mortar retailers.