From distributors to wholesalers by way of agencies of every stripe, intermediaries are no longer in favour. While this phenomenon isn’t exactly recent, it’s been amplified beyond all measure during the pandemic. Disintermediation is the result of deep changes in our economy: the digital shift, technological innovation, and the multiplication of platforms facilitating direct relationships (Uber, Airbnb, Alibaba, etc.) have sounded the death knell of the status quo.
The traditional leaders in every industry are on the spot
Things have changed on the part of the consumer as well. These days, there’s no lack of reasons to short-circuit intermediaries. A few include: the desire to consume locally produced goods, the search for product authenticity, or simply a concern with paying less. Young consumers, who initiated the change, have also supported the rise of a multitude of direct brands that were born online.
The new holy grail: connecting directly with your customers
Precursors Apple and Nespresso launched the trend in the 2010s. Gradually the entire ecosystem of brands followed suit:
- International giants, like Nike, now earn over 40% of their revenue in direct sales
- New Quebec companies, such as Polysleep (mattresses), BKIND (beauty products), or even Lufa (food baskets). The latter has seen its delivery volumes increase by almost 50% in the space of two years.
There’s a variety of direct sale strategies
For those who are able to invest in the necessary infrastructure and expertise, the direct-to-consumer (D2C) approach enables you to stand out from the crowd and fulfill a new set of expectations on the part of consumers.
Intermediaries didn’t wait to respond
The battle that was already well underway among traditional intermediaries is intensifying. To ensure their survival, these companies have had to rethink the nature of their added value. Acquiring the status of trusted partner, developing new expertise, or offering customized or even premium services are all avenues that have allowed these players to remain relevant within the new economic arena.