Importance of D2C

We’re in the midst of a “retail renaissance.” Gone are the days of consumers spending their Friday nights shopping aimlessly at their local mall. Now we spend our nights shopping from the comfort of our homes as we binge our latest streaming obsession. 

Consumers aren’t the only ones who have grown tired of traditional retail channels. Brands are seeking other avenues to sell their products to adapt to consumer behavior and gain valuable customer insights by cutting out the middleman. 

The direct-to-consumer (D2C) model has skyrocketed in popularity in the last several years as brands discover the many pros this method of selling has to offer compared to selling through traditional retailers. According to Salesforce, 99 percent of leading consumer goods companies are investing in D2C sales. 

Allbirds, Warby Parker, and Barkbox are names that likely come to mind when discussing D2C, but the list is continuously growing. Household names like Nike and Adidas are investing more heavily in the D2C model. Nike has recently terminated relationships with several wholesalers to move to a more D2C focus and Adidas plans on 50 percent of sales coming from D2C by 2025. 

The question remains - is D2C  the future of retail?  Signs point to yes. 

 Why  Brands Should Switch to a D2C Model

There are many benefits brands can attain when switching to a D2C model. D2C offers the unique ability for brands to capture better insights to personalize the customer experience that ultimately drives revenue and brand loyalty. 

Access to First-Party Data 

Switching to D2C gives retailers access to important first-party data. First-party data is data that is collected directly from its customers. When brands utilize traditional retail channels like department stores,  brands lack foresight into customer demographics, purchase history, behaviors, etc. Having access to this data will become even more critical for brands to collect as changes to third-party cookies will occur later this year.

Ability to Personalize the Customer Experience

Access to first-party data grants brands the ability to better personalize the customer experience.  According to Epsilon, 80 percent of consumers report that they are more likely to purchase from a brand that offers a personalized experience. 

Unrivaled Customer Support  

Brands can also more easily provide a better customer experience when using the D2C model. Take Chewy for example. In 2022, a customer of Chewy explained on Twitter the level of customer service Chewy offered when the customer’s dog had sadly passed away. Chewy not only gave the woman a complete refund but went above and beyond to ensure this customer was taken care of. 

I contacted @Chewy last week to see if I could return an unopened bag of my dog’s food after he died. They 1) gave me a full refund, 2) told me to donate the food to the shelter, and 3) had flowers delivered today with the gift note signed by the person I talked to?? 😭🥹

— Anna Brose, MSc (@alcesanna) June 15, 2022

Warby Parker is another great example of a D2C brand that is able to pivot quickly to meet the needs of its customers. Warby Parker offers customers the ability to try on glasses both in-store or a home try-on experience. But the brand took it one step further to make the experience even easier for consumers. Warby Parker invested in augmented reality (AR) to enable their customers to virtually try on glasses from the comfort of their homes. 

Drives Higher Revenue and Brand Loyalty

As a result of higher personalization in the shopping experience, the number of advocates for your brand will inevitably skyrocket. Consumers like to feel as if brands understand their exact pain points and needs. Consumers will reward the brands that accomplish this by pledging their loyalty when shopping.

Switching to a D2C model doesn’t have to be a daunting task. Start driving brand awareness and drive revenue for your brand with our Marketing Campaign Template.