According to Digital Commerce 360, 57% of businesses are looking to shift their business model to a direct to consumer approach. Brands such as Warby Parker and Dollar Shave Club have seen what appears to be almost instant success from selling D2C. In order to survive in the Amazon-era, brands need to learn how to make the customer experience the most important aspect of their business.
If you are considering making the switch to a Direct to Consumer business model, here are a few reasons that might help you with your decision:
- Increased Brand Control: One main reason that so many brands are making the switch to a D2C business model is the increased control it gives them over their brand. Typically, customers are buying products online from a distribution partner, leaving them responsible for the customer experience. Making the transition to a D2C model gives brands control over every aspect of the customer experience, such as the product, packaging, advertising techniques, and brand message. This remains true even on online marketplaces such as Amazon.com, selling on Amazon as a third-party seller allows you to have control over your brand.
- Expansion of Sales Channels: There is an increasing trend of multichannel retailing in business. More and more brands are finding it increasingly important to diversify their sales across multiple marketplaces. During this transition to multichannel retail, the main factor that makes or breaks a brand’s success is maintaining its brand image across all channels. To accomplish this, you must sell directly to your customer, as it is very difficult to manage your brand’s image while selling through a wholesale partner.
- Rapid Growth of eCommerce: As eCommerce continues to grow. Brands are finding their retail storefronts are not generating as much revenue as they used to. Customers are now turning to digital channels such as Amazon, Walmart, and eBay to purchase their products. A study by MineWhat.com found that 81% of shoppers conduct online research before purchasing a product. If your product is not selling online on marketplaces such as Amazon, Walmart, and eBay, you are most likely hurting your revenue in physical retail stores as well! Take a look at this chart from Shopify, which represents the changes in retail sales year-over-year by store type.
- More Profit: With eCommerce trends shifting heavily toward D2C, more and more vendors are welcoming D2C business models to their brand. This positions brands to be less reliant on distribution partners, become closer with their customers, and capture more value!