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UK food wholesalers are pivoting to direct-to-consumer in the coronavirus crisis – will it work? – Econsultancy

As people across the UK have heeded advice to stay indoors and only venture outside if necessary, restaurants and pubs who would normally be catering to large crowds have closed their doors.

This has left the wholesalers who supply food to them in a tricky position: many want to find ways to keep their business going, but their regular source of revenue has ground to a halt. However, the demand for food across the country is as high as it ever was – and with supermarket delivery slots booked solid, shelves cleaned out and most imposing limits on who can shop and when, is there a niche that wholesalers could fill?

A number of UK wholesalers think so, and in a bout of admirable agility, have pivoted to selling direct-to-consumer, opening up consumer-facing online shops and Facebook pages and offering delivery to customers’ homes.

The possibilities of wholesalers selling direct-to-consumer (DTC) are numerous, from establishing themselves as a trusted and valued brand in their own right to opening up additional revenue streams and gathering customer data that could continue to be valuable even after the crisis has passed.

But building a successful DTC business model can be a challenge even for a retailer that is normally customer-facing, let alone one that is used to selling to businesses in a very specific way, with specific requirements for delivery, quantity, and minimum order value. Can wholesale sellers overcome these challenges and make a success of DTC?

The ecommerce experience

Most wholesalers are used to having the businesses that they interact with place orders through particular channels. We may be in the age of ecommerce, but for wholesale food suppliers, it’s not unusual for orders to be placed over the phone – even if they display goods on their website. But in the world of consumer-facing retail, expecting customers to ring up to place an order seems hopelessly archaic, especially if they are already on your website looking at products.

However, this is exactly what some wholesalers, like Brakes and LWC Drinks, are expecting customers to do. Brakes has gone so far as to set up a dedicated webpage for its new customer-facing ‘Food Shop’ service – but is only accepting orders via “call and collect”, in which customers place an order over the phone (after browsing the website) and then drive to one of its depots to collect the order. It also requires them to download and follow a specific set of instructions for each depot, as well as agreeing to a lengthy set of terms and conditions.

While some of these hurdles, such as the terms and conditions, might not be possible for wholesalers to do away with without a much more wide-ranging overhaul to how they prepare, ship and sell goods, it makes sense to reduce friction as much as possible everywhere else to make up for it. The more obstacles there are in the path to purchase, the less likely it is that customers will bother.

German sausage retailer The Sausage Man is an excellent example of how to sell direct to consumer as a wholesaler: the company has set up a dedicated online shop that is available 24 hours a day, and has taken pains to highlight its reward system and e-gift vouchers. It has also eliminated the minimum order value – another big potential hurdle for would-be customers, who might not want to spend upwards of £50 or £60 on a single shop – and though a minimum spend is still required to receive free delivery, it is lower for customers in the retailer’s postcode area.

Another meat wholesaler, Fairfax Meadow, has set up a dedicated microsite for selling to the public, with a clear, easy-to-navigate interface and a Facebook Messenger online chat for customer queries. However, the microsite isn’t linked anywhere on Fairfax Meadow’s main website, even where it talks about opening up a consumer-facing business – I only managed to find the link when I visited the company’s Facebook page.

Additionally, Fairfax Meadow requires customers to buy at least £50 worth of meat to place an order, and while the retailer has some great discounts available across its site, this only means that customers have to buy more in order to meet the minimum amount, which may not make them feel as though they’re saving money.

Quantity and delivery

Another major difference between a regular online shop and buying from a wholesaler is the quantity of goods – wholesalers are used to supplying in bulk to restaurants and caterers, and so they sell their products online in similar quantities. Brakes, for example, sells teabags in quantities of 300, hot cross buns in packs of 48, gravy granules in 6kg packs, and so on. LWC Drinks similarly sells cases of beer, alcohol, soft drinks, etc. in quantities of 12, 15 or 24 – although with the pubs closed, these could be in more demand than you might expect!

While wholesale quantities of food would have been a great option for party catering before the pandemic, large gatherings aren’t exactly a possibility now – though for families and larger households, buying in bulk may still have its appeal. And given the huge queues that have been reported in Costco warehouses across the country, shoppers may be prepared to take whatever they can get.

Once customers have placed their order, another issue is getting it delivered. Many wholesalers are used to delivering to restaurants in the nearby area, and are taking the same approach with customer deliveries, only offering deliveries to a specific postcode or area (e.g. within the M25).

However, opening up delivery to a wider spread of locations across the country could give wholesalers a major advantage if they want to make a success of their direct-to-consumer business. Finding a delivery partner could help them accomplish that without needing to spend a great deal of time and effort building up a delivery network, and the partnership could be wound down once the crisis has passed, if wholesalers decide not to continue their DTC business.

Offering delivery also allows customers to purchase food on behalf of friends or loved ones they might be concerned about, or as a gift – Fairfax Meadow, for example, is advertising a special Easter meat pack for customers to buy for a loved one or as a personal treat. It might be a little unorthodox, but these are unorthodox times!

Tell a loved one that you miss them with the gift of a Fairfax Meat Pack as an Easter treat, order before 3pm today for…

Posted by Fairfax Meadow – Putting great meat on the menu on Sunday, 5 April 2020

Maintaining a presence on social media is also a good idea for wholesalers who have pivoted to DTC as it provides a convenient channel for customer enquiries – and aids with word-of-mouth.

While it may seem like a hassle to put these extra processes in place, they can pay dividends in terms of additional business. Wholesalers who sell direct-to-consumer don’t have to become Amazon, but they do owe it to their new customers to make placing an order as frictionless as possible. After all, if you’re reinventing your business model, you may as well do it effectively – and there could be benefits and takeaways that last well beyond the current crisis.

Learn more

Join our research webinar to learn how marketers are responding to the challenges of COVID-19 – Tuesday 7th April at 11am BST. Register for free here.



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