![]() ![]() ![]() However, over the past decade we’ve seen companies disrupting established industries by bringing a Direct to Consumer approach to their products. Startup companies are disruptive by nature. Other megabrands such as L’Oreal, which in the past has been almost fully dependent on retailers to stock and sell their products, announcedthat their ecommerce sales rose by 33% year on year in 2016 and now account for 17.6% of their sales.Įven though many of their digital sales go through other portals, they could also be looking to grow their Direct to Customer approach with the mighty force of Kim Kardashian who is able to directly launch and sell out an entire cosmetic line in under 3 hours. The effort is expected to represent over 80 percent of Nike’s projected growth through 2020. ![]() For the brand, which has traditionally relied upon other retailers to sell their products, it’s a significant strategic move focused on distribution through their website and in their own stores with an emphasis on 12 key cities across 10 key countries. This summer, Nike announced their Consumer Direct Offense – a faster pipeline to personally serve customers at scale. B2B manufacturers, service providers and startups are all reaping the benefits of a digital era which enables industries to optimize their supply chains and get much closer to their customers.īelow are some notable examples of how entire industries are either already being re-shaped or gearing toward a Direct to Consumer approach. This trend doesn’t apply exclusively to customer-facing products. And the number of manufacturers selling directly to consumers is expected to grow by 71% this year to more than 40% of all manufacturers. What’s more, customers also often prefer to buy directly from the source when possible – with the understanding that they will get the best brand experience by ordering directly from the brand itself.Īccording to Forbes, over a third of consumers report that they bought directly from a brand manufacturer’s web site last year. The evolution of digital technologies, and in particular the boom of e-commerce means that brands can relatively easily set up an online store and work with delivery partners if they don’t have their own delivery fleet, or if they need to supplement it.Īs brands, companies and manufacturers become more comfortable with selling direct to customers this trend will only grow. MIDDLEMAN EXAMPLES FULLLeading brands that once upon a time relied solely on partners to distribute their products are now embracing Direct to Consumer sales, which can be a powerful distribution channel with the added benefit of full control over the supply chain, and therefore also in full control of the overall brand experience. With revenue growth remaining a challenge, almost half (48 per cent) of manufacturers are racing to build Direct to Consumer (DTC) channels, with almost all of them (87 per cent) seeing these channels as relevant to their products and consumers. ![]() They often travel thousands of miles to go direct to consumer.Īnd they go through multiple intermediaries, something which has an impact not only on the profit margins, but also on the brand’s ability to connect and communicate with their customer. As supply chains evolve and grow, products are often passed between dozens of hands at factories, shipping vehicles and pallets, distributor warehouses, retail warehouses, shop floors, and delivery fleets. ![]()
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