Breaking Retail Cartels
Tesla’s direct to consumer sales model has completely shaken up the retail car sales world. A direct to consumer model in a market run by private dealer cartels can be a greater disruptive force than most industries can ignore. So what are we waiting on regarding other markets that require a proper revamp of the purchasing network?
Established retailers wield great power over many products and industries. In many of these cases, this authoritative power comes from laws that require producers to sell their wares through third party channels. Tesla Motors took on the the cartel of dealer networks in many states where the law states the manufacturers can’t sell their products directly to consumers. While this resulted in legal battles in some cases, the industry as a whole was ultimately dragged kicking and screaming into a new world where established retailers have to earn their keep rather than expect it, and consumers can do business directly with manufacturers rathe than through a broker.
We can see this shift of retail strategy already taking place in the beauty market. In cases like mens shaving companies like Dollar Shave Club and Harry’s have successfully outfoxed the establishment brands like Unilever and P&G forcing the conglomerates to buy out their upstart competitors. Meanwhile oral hygiene, hair color, hair color, and skin care markets are all seeing D2C companies taking market share from major traditional players.
The question remains if the major conglomerates can adapt new channels and market strategies fast and well enough to compete with these new D2C challengers. Most often it’s simpler for them to just buy their competition rather than fight in unfamiliar territory.