I am a digital marketing & analytics professional. One advantage of digital medium is that, it cuts the distribution channel. That is why, the ecommerce portal selling products in competitive price & passing the benefit to consumers
Cutting Distribution channel in Offline – Strategy
Few days back, I read an article that one FMCG (ID Fresh) is started opening "Trust Shop" in Gated communities in Bangalore & Chennai.
What is Trust Shop? How it cuts the distrubution channel
Trust shop, where no sales person exists. The FMCG food products are stocked in the refrigerator (Batter, parrates) inside the gated community. The consumer take the product & pay as they like. The shop runs on trust. There is no supervison / monitoring (Like Web cam), etc.
By doing so, the company cuts the intermediates & stock the product in the consumer zone. They don't have to pay the middleman (Store keeper).
"Trust Shop" from Business perspective
- Brand value – This will build brand equity & value.
- Profit – Maximizing the profit by cutting the distribution channel
- Elite Group – When Tracking Elite Locality, payment is 99%
- Consumer behavior – The product is within the reach, habituating the consumers to buy
- No Monitoring – There is no monitoring exist. There are chancesAround 15% of people won't pay
- Product Tamper / Product expiry – If the product got tampered or the exipired product are displayed, it affects the brand
- Stocking – Restocking interval is not same for all the real estates
"Trust Shop" from Consumer perspective
- Convenience – Food Take Away is Near by. Pick & pay anytime
- Branded Product – Quality is not at stake
- Monopoly – Only product is displayed
Issue – In case of issue, consumer cann't communicate immediately