Stay-at-home rules, imposed during the global Covid-19 pandemic, have put digitalisation into turbo drive. According to McKinsey and Company, the growth in the USA’s e-commerce in the first six months of 2020 equalled that of the previous decade.
The accelerated adoption of eCommerce has introduced existential threats for many traditional retailers, while creating fresh opportunities for brands that are comfortable with using digital channels to develop a personalised relationship with their customers.
What’s driving DTC?
As the name suggests, direct-to-consumer (DTC) describes the sales model whereby creators sell directly to consumers, bypassing third-party retailers, wholesalers, or any other ‘middlemen’.
DTC offers a win-win situation to both brands and consumers. Brands thrive by directly engaging with their customers, reducing costs, and experimenting with operating models. Consumers stand to gain more value and satisfaction, through brand loyalty programmes which offer discounts, and frictionless sales processes, such as the ability to purchase directly from social media posts. Tailored promotions, based on previous purchases, encourage additional sales, while delivering more data back to brands, which increases the opportunity to personalise future offers.
Why consumers want to buy direct
Many DTC brands are founded with a mission, such as supporting environmental sustainability, which particularly…
