Why Direct-To-Consumer Sales are Gaining Popularity

While e-retail sales have grown in popularity, this was not initially true across all product lines. For example, consumers did not readily embrace purchasing items like mattresses, food, and toiletries online.

All of that is changing with the rise of the direct-to-consumer model. Startups like Casper, HelloFresh, and DollarShaveClub have shifted consumer perceptions by demonstrating clear value to customers and impressing the importance of customization and convenience. Bigger brands took note, and are implementing their own programs.

Why are these businesses choosing to include direct-to-consumer sales in their pipeline? There are many reasons, but here are three compelling ones.

Technology

One large factor in the rise of direct-to-consumer sales is the basic ability of businesses to implement this strategy. Technology gives brands a platform that they have not had in the past. Not only do their websites function as customer service hubs and a source of information, but also operate as an online store with very little effort.

With more data coming from these sites, brands can better anticipate supply and, therefore, demand. They also offer better tracking and delivery analytics, which allows them to constantly improve their process and keep consumers in the loop.

Brands can also ship directly to stores more efficiently with this information. They can cut out warehouses and bring targeted quantities of each product they need to retailers.

Profit Margins

With all of this additional information gathered from technology, brands can adjust production accordingly. They can also schedule deliveries to be more efficient and hit multiple destinations quickly and via the most efficient route.

By essentially cutting out the middleman and working directly with a logistics team to ship and deliver their wares, businesses can cut expenses and grow their profit margins. Streamlining these channels will save businesses money in ways that were not previously possible before.

With the right strategy and technology, supply chain professionals can tighten these gaps and yield excellent results.

Consumer Relationship and Demand

A proper, well-oiled direct-to-consumer supply chain will also improve the relationship a brand has with consumers. If the customer can rely on a brand to deliver a high-quality product quickly, they are more likely to come back to that brand. With about 25% of the world’s population shopping online, this is not a market that brands can afford to miss.

In fact, 80% of surveyed people say they will stop shopping somewhere with poor customer service. Direct-to-consumer sales give brands an opportunity to control that directly. No longer will businesses rely on retailers to maintain that customer relationship; the brands can take control of that, as well.

Communication throughout the shopping, shipping, and, if necessary, return/exchange processes is key. Chatbots, effective tracking, and easily-found policies can help with all of this and cement the customer relationship. This can lead to increased loyalty and return business.

For more information on supply chain trends and beyond, please peruse our Michael Page advice column. If you are looking to hire new talent, can also get in touch with one of our expert recruitment consultants or submit a job description here.