#The middleman full

DSD DeliveryДЄlthough not exactly a вЂDirect to ConsumerвЂ™ example, Direct to Store Delivery (DSD) is also on the rise.

The competitive edge that these startups have relied on revolves around remaining in control of 4 things: customer data, customer relationship, profit margins, and the overall customer experience вЂ“ from discovery to delivery. What these brands know for sure is that вЂњtheir customer is their assetвЂќ. TheyвЂ™ve had the ambition to reinvent the rules and to take on highly crowded and competitive markets by fully owning the relationship with customers. WarbyParker, OneDollarShaveClub, Casper вЂ“ all these $1B+ brands, and many more, have paved the way in recent years. The direct approach is risky but if the brand promise is fulfilled through the purchasing experience, young companies have the capacity to change the landscape. After all, it takes years to slowly build a retail network вЂ“ whether itвЂ™s owned or not.

However, over the past decade weвЂ™ve seen companies disrupting established industries by bringing a Direct to Consumer approach to their products. Startup companies are disruptive by nature. Even 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. Other megabrands such as LвЂ™Oreal, which in the past has been almost fully dependent on retailers to stock and sell their products, announced that their ecommerce sales rose by 33% year on year in 2016 and now account for 17.6% of their sales. The effort is expected to represent over 80 percent of NikeвЂ™s projected growth through 2020. For the brand, which has traditionally relied upon other retailers to sell their products, itвЂ™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 вЂ“ a faster pipeline to personally serve customers at scale. And the number of manufacturers selling directly to consumers is expected to grow by 71% this year to more than 40% of all manufacturers. According to Forbes, over a third of consumers report that they bought directly from a brand manufacturerвЂ™s web site last year. WhatвЂ™s more, customers also often prefer to buy directly from the source when possible вЂ“ with the understanding that they will get the best brand experience by ordering directly from the brand itself.

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 donвЂ™t have their own delivery fleet, or if they need to supplement it.ДЄs brands, companies and manufacturers become more comfortable with selling direct to customers this trend will only grow.

#The middleman full

Leading 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.