D2C or ‘Direct to Consumer’ is a relatively new wave of business model and refers to when a company produces a given product in its own facility, as well as distributes it within its own channels. These channels may be an ecommerce platform, social media or physical retail.
It’s an exciting space to be in and can work in almost any given industry. If you’re looking for a team that understands and embraces this model, please get in touch.
The D2C (Direct To Consumer) model gives the brand a direct relationship with the consumer. In traditional B2C models, there is often the role of a manufacturer, a distributor, a retailer and then the brands head office team.
With D2C, lots of the traditional middle men are cut out and business strategy is centred around selling directly to the consumer through ecommerce. This is becoming a popular option for manufacturers and FMCG brands who are feeling the pressure from disruptive startups to compete on service and innovation.
The key benefits of a D2C model is the direct relationship with the end consumer. This means that product feedback, customer service and the margins saved on extra stages of distribution ensure a better, more innovative, customer experience. IAB research found that in most categories (starting from mattresses and furniture, to pet products, personal care, and beverages), D2C brands are fast gaining market share from incumbents.
The internet has facilitated this new wave of business model and allowed it to flourish.
Ecommerce platforms enable sales, social media ensures ongoing two-way communication and email marketing directly reminds consumers to make that repeat sale. It’s an exciting space that has provided consumers with a new standard in creative marketing and product development.
By its very nature, digital marketing is essential for D2C because it leverages the internet for each stage of the consumer journey. For inbound marketing, channels such as SEO and paid search are non-negotiable. Content marketing is also necessary in order to develop a brand story when there are limited touch points to align the business to its tribe. Content also strengthens consumer loyalty and retention. Performance media is the final element that drives acquisition and perpetuates awareness but it is not as heavily relied on as you might think.
According to a 2019 report, 61% of D2C brands rely on social media to reach customers. SEO is a close second (51%) in acquiring customers.
UK consumers spent an estimated £106.46 billion ($141.93 billion) online in 2019. This will make up 22.3% of all retail spend, a proportion that was estimated to reach 27.9% in 2023 but with unprecedented changes in consumer behaviour due to Covid-19, it’s likely that the D2C model and ecommerce forecasts will have been accelerated.
The thread that ties all successful D2C businesses together is a strong visual identity. To stand out and compete with traditional retail, emphasis is on brand aspiration and brand recognition. The desire to be association to that business has to be strong, this means clear values, clear proposition and clear design articulating the ‘vibe’ of the company instantly. If you compare the first impressions of a D2C brand with a high street offering, its uncluttered and specialist – owning its niche.
At its heart, D2C relies on an “emotional connection” with the product and the brand. That loyalty is what keeps the customer coming back. Your D2C marketing strategy should be designed exactly for this purpose, to stand out among all the big retailers out there, tapping into the emotional – not just rational – decision making process.