Pros and Cons of Direct to Consumer (D2C) Model
Every approach that is new for the business industry comes with some benefits and some non-benefits. Before moving on to the Pros and Cons let’s give a little sneak into the difference between D2C and a B2C approach.
The major difference found in these 2 approaches is that in D2C the owner can directly sell the products to customers and know their choice for further growth and enhancement in business whereas in the B2C approach the manufacturers first sell their products in bulk to retailers to further sell to other parties in smaller quantities.
Below are some pros of the D2C approach
Control over brand reputation:– This is the biggest advantage of the D2C approach where the owner can sell the products directly to the customers and know the exact behavior of the customer towards the product. And even get information on who has purchased and who has not purchased the product.
Increased Customer Engagement and Loyalty:– The D2C approach owners enjoy the freedom of running their business without the interference of the third-party sellers which can defame their image in the market. This is a great opportunity for the owners to make a strategy that will keep the customers busy and engaged.
Access to the market at a lower cost:- New and rising brands may get their businesses up and running for far less money by avoiding the substantial and recurring overheads that come with owning a physical retail presence.
Due to the convenience of setting up an online store utilizing the correct platform, a business may start selling and shipping products within a few hours in the D2C model.
Cons of Direct to Consumer (D2C) Approach:–
With every new approach comes some effects as well which have been discussed below:-
Increased Competition:- With every now shifting to the D2C approach, there is now increased competition as every e-commerce is on rising and many big companies are selling their products directly to customers.
Higher Costs:- Selling directly to customers means getting higher profits from the business but all other expenses that involve campaigning or marketing have to be borne by you.
Complex business Operations:- With the freedom to run the business the way everyone would like to run comes with a great responsibility to match to the ongoing multiple tasks being performed on daily basis.
Is D2C Right for You?
D2C approach is suitable to those owners who want to sell their products directly to the customers and as it will help the owners to know more about the likes and dislikes of the customers to whom they are reaching out for selling the products. The business that would be perfect to use this approach is the Milk business, Grocery business, Meat delivery business, Water Delivery, and many more.
Price vs. Purchase Velocity (or Usage)
It will be hard to trade an item on a Direct to Consumer site without skill sets if it is a high-usage, low-priced item. A D2C may be a good fit for the company if you sell a high-priced, low-usage item.
A D2C website may be a terrific channel to build your brand and the consumer experience with your brand if you have the appropriate plan and the correct goods. Contact our Pattern specialists for more information on how to build a D2C site or for other resources for expanding your business.
Trends in 2021
The D2C market is being grown rapidly with double-digit growth rates within several years and the projected growth for the year 2021-2022 is expected to be between 20-30%. Since many big brands have completely shifted to the D2C approach at the time when their sales have shown a dip to 85% and with this approach, their sales rate has risen to 1000% so now this is the need of the hour of every business entrepreneur who wants to reach the customer and sell the product directly to the customers.
Since the customer’s expectations are always at high and so in turn now the brand’s expectations also have turned high and they are experiencing with the trends for the year to maintain themselves and the product with the market.
The D2C wave is creating a huge impact on the customer’s mindset slowly moving the customers to shop online. A survey revealed that 85% of the orders the brands are getting have been created online and only 15% are from the marketplace as in today’s time customers make up their mind regarding any brand or the product on their own and need not ask anyone for the opinion.
So to connect with the customers – the D2C approach is by far the best and secure way to grow.
Hope You Enjoyed the Read!
He loves to explore. His passion for helping delivery industries in all aspects flows through in the vision he has. In addition to providing smart solution to make delivery process flawless, Ravi also likes to write sometimes to make it easier for people from business industry looking for digital solutions.