Top 3 reasons for brands to go Direct-to-Consumer (D2C)

Commerce is now driven by shoppers. They research online before they buy online or offline. Infact 72% of shoppers research their options online before they make it to the store. - TechCrunch

The paradigm has shifted - the buyers are in full control of their buying journey and decision making, and with that brands have an opportunity to create seamless shopping experiences across touch-points by going Direct-to-Consumer. In this blog, I'll uncover three reasons why brands should skip intermediaries/third-parties and deliver direct to the customers. But if you're already convinced for D2C - watch Rahul Khosla, CEO Altudo talking about "How to build successful D2C businesses".

Reason #1--Revenue Impact-- Leverage demand that you already have

If I have to categorize customers-- I'll create two categories. (1) Those who go to a store finding a kind of product that you offer and (2) those who to go to the store to purchase a specific product of your brand.
In the first case, the retailer introduces your brand to the customer, but in the second case, your brand introduces the customer to the retailer.
For e.g., Adidas has built that brand demand for their specific product "Yeezy" that their monthly average searches are between 100K-1M

And if you notice below, Adidas has gained 1st ranking organically over any other ad. If Adidas has built that demand, why do they need intermediaries and retailers to fulfill that demand.

If your brand already has that demand, why not tap that category directly by removing intermediaries and third-parties? This move can make a dramatic impact on your revenue.

Reason #2-- Delivering Seamless CX and building a direct line with your consumers

Most brands are built on stories-- and the storytelling fails when the brand itself does not tell it. Customers buy brands, and they expect a direct connection with the brand. Customers tend to trust the product more if they buy directly from the brand.
When wholesaler sells the product through retail distributors, the brand have a very less say on "how the product is sold." They're at the mercy of the retailer to ensure the customer leaves the online/offline store happily and with satisfaction. Moreover, experience post-purchase (returns/exchanges) can be handled better by brands comparative to retailers.
Ofcourse, there are complications in building a brand Direct-to-consumer. An impactful D2C presence can endanger other sales channels as well. E.g.-- An aggressive D2C approach (like Nike) puts the brands' relationship with distributors in an awkward situation. But I am sure a brand would prioritize Customer Experience above all because CX is what makes a brand a "BRAND."

Reason #3-- Direct touch allows you to collect data and understand your customers better

Your customers expect a personalized, contextualized experience when they interact with your brand. Moreover, they expect you to remember their choices, buying patterns whenever they interact next. Mapping their journey is imperative for brands to deliver that hyper-personalized experience, and for that, you need your customer behavior data.
D2C brands get an opportunity to interact with the customers directly and gather that data to generate actionable insights.
Most importantly, the direct and authentic engagement with customers often lets you know the "why" behind each action of your customers, and that helps the brand gain a better understanding.

Conclusion

Companies like Dollar Shave Club, Toms, Stitch Fix, Warby Parker are finding success in D2C, but there are many more who are failing. Watch our recently concluded webinar titled - "How D2C brands drive revenue through Digital" to know the secret sauce for brands to excel with data-driven customer experiences. It's a must-watch if you're planning to go Direct-to-Customer/already have a D2C strategy in place.