British consumers who shop directly from manufacturers are saving up to £3,000, according to a new study by economic consultancy Cebr. The research examines the impact of different distribution channels, where fewer intermediaries are in the supply chain, on average basket prices for UK households.
Commissioned by e-commerce platform Temu, the findings reveal consumers could save £2,961 annually or £247 on average per month by buying directly from merchants. That’s 46% of consumers’ total category spend per month.
The direct-from-factory model enables businesses to offer consumers products at significantly lower prices than their competitors. Shoppers can save an average of £79 per month on clothes – 48% of the average household spend on dressing themselves.
In fact, consumers can save £39 per month on other recreational items, gardens and pets when using marketplaces – 48% of the average household spending in this category.
As UK households continue to grapple with the effects of higher living costs, the findings show that consumer savings represent 11% of the average annual income in the UK.
CEO at economic consultancy Cebr, Nina Skero says: “As online shopping continues to expand rapidly and becomes an increasingly prevalent choice for consumers, selecting effective selling channels is more important than ever.”
“By analysing consumer spending patterns and comparing prices across various platforms, we find that UK households could save nearly £3,000 per year by shopping on platforms which utilised direct distribution channels.”
A Temu spokesperson says: “Access to affordable, quality goods should not be a privilege for the few. By partnering with manufacturers and cutting unnecessary costs, businesses can make quality merchandise more accessible.”
“The findings show the direct-to-consumer model can benefit consumers to buy the products they need and want, without being held back by financial constraints.“
Technology is transforming almost every space. One of the biggest impacts is on the logistics and manufacturing sectors. Globalisation, product innovation and customer deamands are causing businesses to reevaluate their supply chains. The pandemic, inflation and tensions globally are increasing calls for a solution. That’s why it’s no suprise that ecommece companies are considering artificial intelligence (AI), real-time supply chain and advance analytics solutions.
The Cebr analysis found that merchants and manufacturers gained a greater understanding of consumer preferences and product demand through a direct-from-factory model. This, in turn, helps meet consumer needs more accurately and avoids overstocking and unnecessary storage costs.
The findings also concluded that import duty structures in the UK cannot explain most price differences between companies utilising different distribution models.
