Nowadays, a new wave of innovative brands is shaking up retail — direct-to-consumer e-commerce companies that create, market, sell, and ship their goods themselves, without intermediaries. Brands characterized by their direct connections to consumers are disrupting the business model of market-leading brands which is leading to a new way of doing business. These direct brands are digitally savvy and fueled by data and will be the growth engine of the new economy. The Direct-to-Consumer (D2C) approach is quickly becoming a common path for suppliers and CPG (Consumer Packaged Goods) products to reach the market directly. They produce and ship their goods directly to customers without relying on third-party aggregators or other intermediaries. It helps D2C businesses to sell their products at a cheaper cost than conventional luxury brands and to retain end-to-end control of the production, sale, and delivery of goods. Direct-to-consumer brands have used the digital infrastructure to grow quickly and connect directly to their customers. They have built robust and influential presences in Google search results, turned their Instagram followers into micro-influencers, and used highly targeted Facebook ads to widen their audiences.
The DTC business model is here to stay, and the following characteristics make these brands exceptional.
- Mission Driven: Many brands of DTC believe in the value that they offer to their customers. Their message is not just about the product; it is also just as based on relation or experience. Sales are no longer just sales for them; it’s the customer journey. Support is no longer just help & support; it is the experience of the consumer.
- E-commerce sales: Most DTC brands are digital natives, with sales only available online – from sites like Amazon to their self-hosted store. The same is true of most marketing campaigns, with a big emphasis on digital platforms such as social media and paid search.
- Quality over price: Many DTC brands take the debate regarding benefits vs. marketing features seriously, and product costs seldom play a role in their marketing strategies implying customers tend to be invested in a DTC brand
- Data-centric: Since most DTC brands are also digital natives, they prefer to concentrate on the Millennials & Gen Z consumer segments. These brands tend to be highly analytical – they rely on metrics to cater to their consumers, to make their sales, and to keep up with great messaging. Most of their sales and marketing activities are targeted at making changes to maximize the funnel rather than make a big splash.