The Covid-19 pandemic and the acceleration of ecommerce saw many companies launch or accelerate plans for D2C offerings to fulfil short-term consumer needs. Direct-to-consumer ecommerce (D2C) sales in the US alone are expected to reach $151.20 billion in 2022, an increase of 16.9% on 2021, and there is a similar trend throughout Europe.
The pandemic has also shown the B2B world how embracing D2C can be a lucrative model and many manufacturers are seeing it as a way to future-proof their B2B business. A December 2020 report from Barclays Corporate Banking forecast that D2C sales were worth £96bn for UK manufacturing in 2020 and are set to grow to £120bn in 2023. Almost three fifths (57%) of those surveyed said they now frequently go direct to manufacturers because they believe they will get a better price (36%) and better service (23%).
There are many benefits to going direct to consumers including brand differentiation and control over pricing, ability to deliver better customer experiences and personalisation, innovation that is based on real-time customer insights and feedback, along with the potential for increasing lifetime value and profitability. New tools and technology are making it easier to launch a business, but it is also about getting and staying close to customers with direct access to their data and a big focus on customer experience and, increasingly, community.
Read more of Econsultancy’s 2022 predictions and trends analysis
The Covid-19 pandemic has shown that Philippines Photo Editor having a D2C channel provides additional flexibility, with the prediction that the shift to online shopping is here to stay. FMCG giant Unilever illustrated the importance of this channel by dedicating one of its strategic pillars for growth in 2021 to its D2C operation and is already seeing strong growth, with ecommerce now accounting for 12% of its business.
More than two in five Americans (43%) are familiar with D2C brands, and of those, seven in 10 (69%) have made at least one purchase from a D2C brand in the past year, according to Diffusion PR’s Direct-to-Consumer Purchase Intent Index.
As well as brands selling direct through their own websites and marketplaces, many are exploring options such as livestreaming or developing partnerships via social platforms in order to connect with their consumers and grow their digital business. Looking ahead over the next 12 months a survey of CMOs in the UK highlighted that 47% of respondents said D2C channels would offer them greater control over how their brand is portrayed, while 43% said they are excited about the valuable first-party data that D2C will offer.
For many FMCG companies the ability to build direct relationships with their customers, gather knowledge about their behaviour and in particular, have ownership of the data have been key drivers behind their D2C models. For instance, Jean-Philippe Nier, Heinz’s Head of Ecommerce, told Econsultancy that their D2C offering ‘Heinz to Home’, originally intended as a stop-gap to provide cupboard essentials, has evolved into a longer-term strategy with a long-term vision about data and insight.