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Circumventing the traditional manufacturer to wholesaler; wholesaler to retailer; retailer to consumer distribution model and going directly to the consumer isn’t new for many brands, particularly for those for which telling the brand story and customer service are key factors in making the sale and building customer retention and loyalty. Many well-established brands’ dominance began to fade behind a new retail reality populated by big-box discount retailers. Without an army of professional salespeople to tell consumers why the brand was superior, many brands began to falter behind those with the lowest prices. Companies that are deploying the direct to consumer model are once again building powerful brands that stand for quality and innovation.
With the disruptive advent of digital marketing, the direct to consumer (D2C) distribution model is experiencing an explosion in popularity and causing both emerging entrepreneurs and well-established companies to reconsider the way they do business. The D2C marketing model is permitting companies to streamline the shopping experience by offering their products online, directly to customers.
The benefits include increased opportunities to build better relationships with customers, improving the implementation of new product offerings, getting products to market faster and eliminating costs associated with intermediary distribution players. The system allows full control over the massive amounts of data generated from the digital marketing experience. Industries that are finding success in the D2C channel include apparel, beauty, healthcare and home furnishings.
The Diffusions “2018 Direct-to-Consumer Purchase Intent Index” indicates that consumers plan to do at least 40% of their shopping from D2C companies in the next five years, and 81% say they’ll make at least one purchase from a D2C brand within the same period. However, according to a study by PipeCandy, fewer than 3 percent of new brands currently have a billion dollars in online sales, suggesting that traditional retailers still account for the majority of sales to consumers. Many brands who have already established a D2C model are moving to expand into brick-and-mortar by forming partnerships with established brick and mortar retailers or opening their own retail outlets. With the potential of a bright future, many existing brands are moving to connect directly with their customers through the D2C distribution channel.
Direct to consumer marketing is trending upward and appears to be here to stay. Emerging companies are finding the D2C channel ideal for introducing new products faster while significantly reducing the costs associated with typical distribution channels. Current marketers are renewing their relationships with existing consumers, making connections with new market segments and taking control of their brand’s message and reputation. No matter the industry, it’s time to reevaluate the benefits of direct-to-consumer marketing.