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Direct-to-consumer (D2C): Introduction

Romain Ledru-Mathe
Published on
December 31, 2021
This is the first in a series of 8 articles on direct-to-consumer. An article will be published each week.

The direct-to-consumer or D2C model of sales to consumers consists for brands of moving away from resellers and distributors of the traditional distribution model, and of controlling the entire relationship with the end customer, from the sales platform (often online) to delivery, including marketing and customer service.

The interest is threefold for the company: to increase the proximity between the brand and the end customer, to better control the entire purchasing experience, to capture a great deal of data on customers and their habits, and to reduce the costs of distribution by avoiding intermediaries.

In recent years, we have seen a certain enthusiasm for this distribution strategy, particularly on the part of established brands, such as L'Oréal, Nike or Unilever, who see it as an opportunity to experiment with new ways of interacting with their customers. end results and create new sources of income.

This trend is not unrelated to the emergence of new digital native brands that are positioned in specific product verticals (DNVBs: “digital native vertical brands”). These 100% online brands, without a store network, have been inventing new ways of addressing their customers and radically different shopping experiences over the past ten years. From mattresses (Casper) to glasses (Warby Parker in the United States or Jimmy Fairly in France), via fashion (Bonobos in the United States, Le Slip Français or Sézane in France) or everyday products (Dollar Shave Club for razors or Joone for diapers), these young brands are gradually gaining significant market share to the detriment of their historically established competitors.

Beyond this new competition, the COVID crisis has reinforced the interest of classic brands for D2C: with the prolonged closure of distribution stores and restaurants, online purchases have increased strongly in all sectors (+ 30% on average in e-commerce in 2020 according to a study by Publicis Sapient ), accompanying a gradual change in the habits of consumers, who are less inclined to go to stores and more demanding a “remote” experience.

In this context, it becomes critical for brands to know how to reach their end customers wherever they are, without depending on intermediary distributors. D2C now represents essential know-how for brands in these uncertain stop-and-go times.

But where to start ? Let us first examine the underlying trends that have allowed the emergence of this new distribution model, and the successful pivots of some major brands (I). This will allow us to identify the key success factors of a relevant D2C model (II). Finally, we will see the strategic questions to be asked for a brand to launch a winning D2C model and the different concrete forms that it can take (III).

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