In what appears to be an unprecedented move, a major eCommerce retailer is connecting its suppliers directly to consumers. Newegg, which is arguably the largest computer component and consumer electronics retailer, has announced a new program to help vendor partners sell directly, albeit through its platform.
It looks as if the major upside for Newegg is increased traffic to its site. According to the company, the program has been in beta for the past six months. It recently completed a successful pilot that achieved a 102 percent year-over-year increase in unique visitors, driving an 87 percent increase in sales during that period.
“D2C represents the next big growth opportunity for eCommerce, and Newegg gives manufacturers a direct path to reap the rewards of a D2C campaign with very little effort,” said Anthony Chow, Newegg’s global CEO, in a statement. “By extending our expertise in all aspects of eCommerce – from marketing to merchandising to logistics – we bear the heavy lifting on behalf of our vendor partners to help them deepen customer engagement and increase sales.”
According to the company, typical D2C engagements include targeted marketing, optimization of the on-site experience and logistical support. Its team works with each D2C partner to reach targeted audiences with lead generation tactics like social media and influencer marketing, email marketing and SEO. The company says its vendor partners retain control of the shopping experience on Newegg.com, including pricing. Newegg will track the customer journey and aggregate analytics to refine future campaigns as needed.
“D2C vendor partners benefit from Newegg’s nearly two decades of logistics expertise,” a company statement said. “In addition to fulfilling its own customer orders, Newegg regularly picks, packs and delivers orders on behalf of hundreds of other companies that rely on Newegg’s suite of third-party logistics (3PL) services. D2C partners have access to Newegg’s vast portfolio of end-to-end logistics solutions, including reverse logistics management and customer service and support. 3PL support is fully customizable, enabling D2C partners to outsource logistics services as needed.”
One of the use cases featured by Newegg is from massage chair manufacturer Best4Less. Through the DTC program, merchandisers optimized pricing and promotions, including targeted email campaigns. The company noted that Best4Less has experienced a 1000 percent increase in GMV since 2016.
The move follows an April 30 announcement that Newegg – prompted by the pandemic, which lengthened time-to-delivery for customer orders – was increasing production within its fulfillment network. Newegg said its clients that use Newegg Logistics (the company’s in-house fulfillment network) avoided supply chain disruptions.
“Newegg’s in-house fulfillment and logistics capabilities are more important than ever as we strive to maintain unparalleled service across our entire eCommerce ecosystem during these difficult times. Speedy order fulfillment for our customers is the core of our business model,” said Jamie Spannos, global chief operating officer of Newegg. “By reacting quickly and maintaining business continuity, we’ve ensured our customers can expect timely order fulfillment, whether they order directly through Newegg or via one of the many third-party eCommerce companies we support through Newegg Logistics.”