What is retail distribution?
Retail distribution refers to the process of getting goods from manufacturers and producers to consumers. Throughout this journey, goods may pass through many intermediaries such as wholesalers, vendors, and retailers.
In the case of direct-to-consumer (D2C or DTC) brands, the path is shorter because the brand sells the product directly to the customer through their ecommerce website or retail store.
How does retail distribution work?
There are several types of retail distribution strategies. While each of these strategies ultimately result in getting the goods to the customers, there are variations in the process and the number of outlets used.
Intensive distribution
This strategy involves using all available outlets to flood the market and sell products to almost every potential customer. An intensive distribution strategy is typically ideal for products with high levels of competition.
Since consumers have a wide variety of options to choose from, they’re likely to settle for an alternative if their preferred brand isn’t readily available. So by employing a wide distribution network, businesses can make their products more accessible than their competitors and gain leverage.
Selective distribution
Selective distribution involves taking a more targeted approach to retail distribution because it utilizes outlets in certain locations. As a result, products are still widely available to interested customers but not as scattershot as with an intensive distribution strategy.
A selective distribution method is ideal when your target audience is willing to do some shopping around and isn’t interested in an alternative brand. For example, some consumers may be loyal to the Nike brand and would be willing to shop around to find the perfect pair of Nikes instead of buying a similar design from other brands such as Puma or Adidas.