Direct To Consumer: Impact On Retail Manufacturing Industry

To say direct-to-consumer retail practices have had an impact on the manufacturing industry would be an understatement. With eCommerce a major proponent of the direct-to-consumer (DTC) channel and showing no signs of slowing down, the retail industry landscape has been forever changed.

Outside of brick-and-mortar stores being on the receiving end of some crucial direct-to-consumer blows, one area that’s seen a major transformation is behind the scenes with the retail manufacturing industry. Helping to serve the entirety of the direct-to-consumer world — via eCommerce channels as well as traditional department store catalogs — manufacturers are essentially the backbone holding it all together.

Within just one year, Amazon ships 600 million packages. With all of the recent acquisitions and partnerships already announced by the eCommerce giant alone, the demand for manufactured goods will likely continue to see an uptick.

As such, the transformation that it has undergone over the last decade or so has been tremendous. Retail manufacturers have received pressure from partners to make and ship products at a much faster rate than at any time in the past. A direct result stemming from that pressure to move at a quicker pace? The movement to install robots to help expedite the process. According to research from PwC, 59 percent of manufacturers already use robots in some capacity.

Helping to push retail manufacturers to the next level is the influx of Internet of Things (IoT)-related technologies being inserted throughout operations. In addition to adding sensors to automated machines, connected aspects have been integrated to make the entire manufacturing process seamless.

Experts from Zebra Technologies’ new Manufacturing Vision Study report are predicting that by the year 2022, 64 percent of manufacturers’ factories will be fully connected and 55 percent will utilize wearable technology. Manual processes are expected to be on the way out as well, with research sharing that the current 62 percent of workers using pen and paper in manufacturing operations will drop down to 20 percent within the next four years.

Zebra Technologies’ senior vice president and CMO, Jeff Schmitz, commented on the report’s findings and what it means for the future of the industry.

“Manufacturers are entering a new era in which producing high-quality products is paramount to retaining and acquiring customers, as well as capturing significant cost savings that impact the bottom line,” said Schmitz. “The results of Zebra’s 2017 Manufacturing Vision Study prove that IoT has crossed the chasm, and savvy manufacturers are investing aggressively in technologies that will create a smarter, more connected plant floor to achieve greater operational visibility and enhance quality.”

The eCommerce world has not only spurred manufacturers to up their game for distribution via companies like Amazon and Jet.com, but has also resulted in a shift in people purchasing directly from manufacturers themselves. While companies like Warby Parker and Everlane have been at the forefront of this trend, brands like Nike and Pepsi are joining in on the DTC avenue — and it’s paying off. As PYMNTS reported earlier this month, Nike’s DTC side of its business, perhaps partly due to its decision to sell on Amazon, is predicted to see an increase from $6.6 billion in 2015 and up to $16 billion by 2020.

In DTC news this week, New York-based True Gault launched its new interactive app that takes a 3-D scan of consumers’ feet to create a custom pair of high heels. In partnership with Marie Claire’s creative director Nina Garcia, this app is offered via Apple’s iPhone.

All in all, DTC’s impact on the manufacturing industry appears to have pushed it into both innovation and entrepreneurship.