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Understanding D2C What’s fuelling the move?


By Elliott Jacobs, EMEA Commerce Consulting Director at LiveArea


The direct-to-consumer (D2C) market has


skyrocketed, experiencing double-digit growth to the point where it is projected to grow 19.2 pe cent this


year. While D2C will have been on brands’ radars for some time, the majority have lacked the systems and processes needed to support such a move. The closure of physical retail, however, has proved a catalyst for many to make the move as they aim to reinvent themselves for the new landscape.


W


hile the April 12th roadmap puts a return to the high


street back on the horizon, we’re unlikely to ever return to pre-pandemic footfall. Together, shrinking margins, the emergence of digital disruptors and the unstoppable rise of eCommerce mean D2C is no longer a nice-to-have for many brands, but a means of competitive differentiation in the age of at-home retail.


Changing behaviours under Covid When we think of ‘D2C,’ it’s usually the likes of Dollar Shave Club, Brewdog and Bloom & Wild that come to mind, and two key similarities run through them all. Firstly, they tend to be niche and offer a fine-tuned proposition concentrating on one category – think subscription razors, craft beers or letterbox f lowers. Secondly, they are obsessively focussed on digital, whether it’s through social media engagement and user-generated content or innovative eCommerce experiences, these brands lead the way in data-driven business decisions.


The most agile, efficient and resilient businesses over the past year have been the ones which place digital commerce,


homeofdirectcommerce.com | Direct Commerce


data and analytics at the heart of their operations. Businesses can no longer rely solely on bricks-and-mortar, with many household stalwarts reliant on physical real estate having shut their doors for good. Spurred on by lockdown restrictions and panic-buying, many consumers are now sold on the convenience of buying directly from brands – a trend which is unlikely to change even with the reopening of physical stores.


These behavioural changes have sprung larger brands into action, who are now launching their own D2C operations to improve profitability and take over the relationship with customers. Here, Nike has reaped the rewards of an earlier decision to pull back from Amazon and use its website and shopping apps to build close connections with customers no longer shopping in-store. Elsewhere, PepsiCo and Heinz launched D2C offerings catering to common lockdown purchases to address supermarket shortages as a result of the panic-buying seen in the early days of the pandemic.


Acting on data intelligence The reason behind many of these brands adopting D2C lies in the


Continues overleaf > 31


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