Why 2021 Will Be the Year of Direct to Consumer (D2C)

April 15, 2021 | Written by CommerceCentric

Direct to consumer has been on the rise for some time now, and it does not seem to be slowing down in 2021. In fact, many brands are predicting that direct-to-consumer channels will surge in 2021 and beyond as more consumers continue their shift away from traditional retailers and look to buy directly from brands. But what does this mean for your brand? And how do you make sure that going direct is worth your while?

This article discusses why going direct is a necessity for an omnichannel strategy, the changes in shopper behaviour, how tools like Shopify are making DTC easier than ever before, and why more traditional retailers are entering the arena.

Direct to consumer used to be a massive undertaking for most brands, but now it's the norm. The change in consumer behaviour has made DTC a necessity for brands looking to stay ahead of their competitors while still appealing to customers who prefer shopping online or want more personalization options than offered at traditional retailers.

We're crazy about Direct-To-Consumer channels, and with good reason: they are becoming increasingly popular as consumers shift away from brick & mortar stores. We'll show you why going direct is an absolute must for your omnichannel strategy, walk you through some key points and provide tips on how to make sure this channel works well for you.

Direct-to-consumer used to be a big deal - something reserved only for higher end luxury goods like fashion but increasingly through the necessity of the pandemic and the rapid cost reduction in creating ecommerce stores, the DTC channel is now becoming a viable option for brands of all sizes.

Direct-to-consumer channels are proving to be an interesting way for traditional retailers to stay in competition with Amazon and other ecommerce giants, as well as new entrant brands who have captured consumers' attention by selling direct.

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Here's why you need to start thinking about Direct-to-Consumer:

  • Your customers want it - this goes without saying but studies show that many people prefer shopping online or want more personalization options than offered at traditional retailers.

  • Its more commercially viable now than it used to be - with falling costs for ecommerce software and tools, many businesses are able to create a beautiful online store in half the time it would have taken just years ago.

  • New technologies that make merchandising easier - new AI-based systems help select products based on your customers' preferences so you don't need an army of people doing this work.

  • Direct is now like traditional retail marketing channels - although some retailers may be hesitant to enter the DTC space because they see direct as too risky or complicated, its more important than ever not only as a way to grow sales but also to save them by reaching consumers through multiple channels instead of being reliant on one.

So, the need and technology are there but what about the benefits? Well, there are plenty of reasons why brands should consider going direct to consumer.

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The benefits of Direct-to-Consumer:

  • Increasingly less expensive.

  • Direct relationship with your consumers.

  • Own your own data.

  • Control your catalogue.

  • Sell anywhere in the world.

  • Reach new audiences.

  • Get higher margins on your products.

  • Faster fulfilment cycles.

  • Nimble to innovate and respond quickly.

  • No need for expensive retail real estate and all the costs that come with it.

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The pandemic has drastically altered shopping behaviour forever. People are now shopping differently and more often than ever before, with a huge reduction in physical store visits per week. People have spent over a year without going to their usual physical store and have adapted, possibly forever to this change. They're going direct to brands for their favourite products-which also means increased revenue potential for DTC companies as opposed to those who rely on retail channels like Amazon and High Street Retail.

Direct-to-consumer is the way forward because it's about being able to shop anytime anywhere without having any limits whatsoever - specifically because you own your data (no one can buy it from you) so there is no need to worry about someone else using it inappropriately or violating privacy rights. You are in direct contact with you customers with no middleman. It is perhaps this ownership of customer data which is driving the latest trend of going direct-to-consumer, as brands are realizing that it is the only way to guarantee customer loyalty and data ownership. This means creating a website with an online store or platform which allows you to sell directly.

Brands who have perhaps considered D2C in the past but discounted it due to the high cost of entry can now have a much easier time of it. Tools like Shopify, for example, make it so easy to start selling online enabled by the power of social media and influencer marketing on Instagram. Stores can be built in a matter of days with global reach, complete payment type coverage and flexible logistics meaning that there is no reason not to go direct-to-consumer.

2021 is definitely shaping up to be the year of DTC for brands but many will also be left behind if they don't adopt a strategy soon. However, the benefits of going DTC are clear. Preferential pricing, better customer data, improved margins and lower distribution costs all point to the march of direct-to-consumer as inevitable for brands in 2021. Is it time you considered it too?