Case Study: How Havaianas improved DTC sales through distributor monitoring
The iconic Brazilian brand increased its DTC sales by 31% in European marketplaces and managed to avoid 25% of channel conflicts.
Havaianas is globally known for its flip flops. It started manufacturing its famous flip flops in 1962. In the early days of the company, street vendors travelled around Brazil in vans selling them, which until 1969 were only available in 2 colours: blue and white.
The green Havaianas, which were created by mistake, became a huge success and led to a wide range of colours and prints. Currently, Havaianas remains a symbol of Brazil’s vibrant and relaxed lifestyle. With a global presence, it sells around 250 million pairs of flip flops each year, in over 100 countries. And in 2022 it had a turnover of over €750 million.
The challenge: Detecting price violations that would damage its brand image and create channel conflicts
The report “The state of the Connected Customer” published in 2021 by Salesforce in collaboration with the Harvard Business Review presents a revealing statistic about omnichannel purchasing processes: 73% of consumers use multiple channels during their purchasing process, highlighting the importance of an integrated omnichannel experience.
Wanting to offer the most integrated and satisfying omnichannel experience possible, Havaianas faced the challenge of monitoring the prices of its products in the online channel. Its teams needed to collect and organise prices by model and size on a daily basis, regardless of the language or location of the site.
The leading company in the flip flop sector realised that there were multiple distributors and sellers of its products online. Who also were operating on different websites and marketplaces. And it needed to control them all.
According to a study by Forrester Research, focusing on how direct-to-consumer (DTC) sales affect relationships with distributors, 52% of manufacturers reported experiencing channel conflicts due to DTC sales, which compete with their traditional distributors.
As we explained in one of our previous articles, channel conflicts are one of the biggest headaches for brands and manufacturers, and in the case of Havaianas it was no different.
If Havaianas couldn’t get full control of the situation, distributors and resellers would continue to commit price violations, damaging the brand image and causing the dreaded channel conflicts. In addition to controlling prices on various ecommerce sites, it was also important for the brand to be able to identify each seller on marketplaces such as Amazon or Zalando, where numerous sellers offer products at varying prices.
This involved monitoring over 19,000 product pages on 448 websites in 5 different European countries. Manually, it was an impossible challenge to take on. So Havaianas sought the help of a technology partner specialising in marketplace and seller monitoring.
The solution: A specific, intelligent and scalable price, marketplace and seller monitoring strategy
After several meetings of all the teams involved, in which the best strategies to monitor their distributors and control channel conflicts were reviewed and discussed, the brand Havaianas decided to work with flipflow. They chose to monitor all retailers and sellers daily for each reference in their catalogue in the 5 European countries they needed to control.
In addition, they also started reviewing Amazon and Zalando on a daily basis, thanks to the marketplace and seller monitoring tool included in the flipflow platform. This tool gave them information about all the sellers in the Buy Boxes and their activity.
These actions provided the Brazilian company with real-time visibility of each online seller. And also, with information about offline sellers who start to sell in marketplaces.
On the other hand, the Havaianas team established automatic comparisons of selling prices with each product offer on the market. Based on percentages by range and region, they received automatic alerts, sent by email, to detect price violations in real time.
They also created reports and dashboards for different departments by country and distribution channel. In this way, each delegation of the company obtained segmented information from the retailers and marketplaces in its domain, as well as other global ones at EMEIA level, and could take action in real time.
The solution implemented, thanks to the use of the intelligent flipflow platform, impacted the direct work of several teams within the company. Marketing, sales, ecommerce and Havaianas management saw their strategies to control price violations and channel conflicts improved. And this translated into magnificent results.
Results: Fewer price violations and channel conflicts. More DTC sales
Since Havaianas forged its alliance with flipflow, it has improved its control of European retail thanks to real-time and actionable information. Manually, this would have been impossible to control. The company has managed to gain better control of its distributors and pricing policies, reducing unauthorised sales by up to 50%. It also managed to reduce channel conflicts by 25%. And improve its DTC (Direct To Consumer) sales share to marketplaces by 31%, with an exponential increase in turnover and margins in this type of sale.
Javier Gurney, from Havaianas EMEA, wanted to share with us his team’s experience with the flipflow platform:
In addition, I would highlight flipflow’s powerful BI, which gives us the flexibility to adapt its analysis and reports to our needs. The tool’s ease of use allows other areas to exploit the data it collects without having to be a data expert.»
In addition, the market analytics platform provides current and historical data on each seller, price and promotion. Thanks to this, Havaianas increased its negotiating power with distributors.
All these actions had a positive impact on its sales and led to a reduction in friction in online and offline channels.
Do you want to gain control of your distributors and improve DTC sales, ensuring the same good results as Havaianas for your company? Find out how we can help and request a demo of our marketplace and seller monitoring tool here to achieve success.
