Curious about how DTC can contribute to your overall portfolio? Below, you’ll find an overview from our DTC consultants on the landscape of operating with a Direct-to-Consumer model, but download our free eBook as well for the full scoop on this question. Whether you’re currently in the DTC space or considering entry, we’ll guide you through some ways of thinking about how DTC can contribute to your portfolio.
How Can DTC Contribute to Your Portfolio?
During the pandemic, the Direct-to-Consumer (DTC) model experienced a remarkable expansion, charting a path of soaring success for many industries. We now see a new normal where consumers have comfort buying certain categories online but have also returned to in-person shopping for many goods. We have seen a leveling off in some DTC categories, in part because of evolving consumer habits but also due to market saturation and low differentiation.
A hybrid model that incorporates DTC into a brick-and-mortar framework can reach different consumer markets, as preferences for in-person vs. online shopping vary. However, brands must have a marketing strategy to drive consumers to their sites. The DTC model is enticing to many companies due to its lower entry/establishment costs, easier market entry, and relationship with consumers.
DTC can allow greater opportunities for consumer interaction and personalization and can create a deeper connection with consumers, which can enhance brand awareness and revenue. In fact, 88% of consumers state that they would prefer to buy directly from manufacturers, so selling directly may open doors to more streams of revenue. Many consumers believe that brands themselves have better deals and offers, and they also tend to trust the brands more than the intermediaries and retailers.
Brands considering implementing a DTC model should determine the role that DTC will play in their portfolio and what successful DTC will look like at your organization, including determining where your audience is, how saturated the product market is, and how the product can be uniquely differentiated.
It’s essential to get the right product into the right channel at the right time. DTC can be a primary driver of revenue and for others, it might be more of a consumer engagement activity. Understanding the role DTC might play in your brand will allow you to set realistic goals and expectations.
To learn more about if DTC is right for you, contact our DTC experts today.
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Contributions from Sam Weitzel