How Retailers Respond When Brands Start Selling Direct

A new study analyzed the product orders placed by nearly 2,000 multi-brand retailers in the U.K. and France before and after a partner brand launched direct sales channels. On average, retailers decreased their orders by 19% and paid about 21% more after the entry compared to the period before the launch. But not all retailers responded the same way: the larger and more powerful the retailer, the less likely they were to retaliate against the brand. The researchers offer suggestions for brands looking to maintain relationships with both small and large retailers, noting that partnerships of all sizes can add up to significant portions of brand profits.