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Even Big Brands Need a Direct-to-Consumer Strategy

The attitude toward direct-to-consumer (DTC) initiatives has changed almost overnight. Large consumer brands used to worry that such initiatives would create channel conflict and cannibalize the business—not to mention displease retail partners. Now they realize that the DTC approach allows them to collect valuable consumer data, personalize the experience, quickly launch and test new products, and grow the business. What’s more, as the pandemic has revealed, it aligns with the way many consumers want to interact with brands.

Today, companies don’t have to choose between DTC channels and retail partners. Instead, they just have to ensure that the DTC channel they establish adds to total growth. Consumer brands that are not already investing time to evaluate and improve their DTC capabilities need to start doing so immediately—or face losing market share to more nimble rivals. To help, we have codified a set of learnings for consumer brands to rapidly accelerate their DTC efforts and reap the benefits.

DTC Is Here to Stay

Our definition of DTC brands is expansive. It includes:

  • Digitally native, online-first consumer brands with a portfolio focused on a particular product category
  • Retail brands with stores that fully embrace digital channels through their own websites (see “The Retail Response”)
  • Well-established consumer brands that are sold mainly by retail partners and are experimenting with DTC as a new business model

Given the rate of e-commerce growth, these companies must either quickly establish DTC capabilities or continue to build their existing functions. From December 2019 to May 2020, US e-commerce sales in the food and beverage category—long considered a laggard in the online space—grew by 67% year over year. [Read More @ BCG.com]

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