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How retailers benefit from collaborations with DTC companies

ConsumerGeniuses

ConsumerGeniuses

Because of the high marketing costs associated with internet sales, DTC firms are increasingly finding value in selling items offline. Many mature firms have created permanent storefronts in major areas, while others have used temporary pop-up stores or formed partnerships with traditional retailers to house their items in a physical setting. DTC firms stand to benefit greatly from having their items on the shelves of Walmart or Target, but how can a big-box retailer benefit from such collaborations? Walmart paid a record $3 billion for Jet in 2016, and it uses its Jet.com platform to offer trendy brands like Nike and Bonobos. Walmart has started to restructure its digital approach by incorporating Jet into its bigger e-commerce operation and letting go of both Lore and Dunn. DTC brands can still provide digital expertise, but retailers must find out how to make shopping for those brands and the rest of their site seem seamless. Establishing alliances with newer, more desirable brands enables businesses to recruit and create relationships with a new group of consumers who would not have purchased with them otherwise. This increases foot traffic to retailers, generates additional income, and helps customers preserve cultural relevance. DTCs may also assist retailers with their own labels, such as Target’s Open Story luggage line and Walmart’s All in Motion sportswear brand.

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