Direct to consumer (D2C) isn’t just an emerging change in retail, it’s also affecting the consumer products industry. As social media and mobile technologies are redefining consumer buying habits, linear model of selling goods through retailers is breaking down.
Today consumers want a personalized approach and personalized products of a good quality, and at a fair price that they can get hassle-free, no matter what channel they use.
For consumer product companies, selling their products to retailers is really not enough – in fact this might even kill the brand.They need to start connecting with their consumers directly if they want to stay relevant to them.
But how? And how do you integrate the customer journey into internal processes while streamlining the operations to deliver seamless, meaningful, and relevant content and offer to consumer?
One thing is certain: A strategic approach to route markets is needed for the manufacturer to build the brand, from traditional, modern trade to direct to consumer.
Direct to consumer brands that shine
What else? They make affordable products. Good.
What else? Do they sell them directly to consumers too? Bingo!
Smaller consumer goods start-ups are making a big disruption in the marketplace by offering new experiences with quality products that consumers can simply fall in love with. These companies understand very well that choosing one product over another on a retailer’s website might end in winning a sale, but with it, they lose the opportunity to build a relationship with a consumer.
That is why they are offering a more direct approach and building a more natural and lasting relationship with their customers. The direct to consumer brand model allows them to simply take complete control over their growth, price, brand, sales velocity, and customers.
And they are successful at it. Away shook a sleepy luggage market with their affordable carry-ons, and in less than three years, sold over half a million of them. Similarly, Dollar Shave Club built a successful billion dollar empire by simply offering a better grooming/shaving experience at a more affordable price.
D2C isn’t just for start-ups
Recognizing that competition never sleeps and constant innovation is necessary, big brands are also entering into the direct to consumer fray.
Retail giants like Nike, Levi’s, and Nespresso are now rapidly searching to find out what their customers want, how they want it, and what their value proposition is – and they winning big.
Nike: Nike’s D2C sales are estimated to reach $16 billion by 2020.
Levi’s: The iconic denim wear retailer hit a two-decade sales record as direct to consumer helped them increase their revenue by 22% globally in 2018.
Nespresso: Their direct to consumer platform records 250,000 purchases each month, with a 24.7% conversion rate – almost double the rate from similar purchases on Amazon.
The bottom line: In order to protect your bottom line, the direct to consumer model must be incorporated.
Ready to join other direct to consumer brands? Take this survey to find out if you’ve got what it takes.