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What is Direct to Consumer (D2C)?

What is direct to consumer? Trakop

D2C (Direct to consumer) Approach is a “Direct to Consumer” approach where the companies or the brands sell their products directly to the customers without the involvement of any middleman. Brands using the D2C approach usually imply an online shopping environment and web interface.

This actually helps the business owners to create an environment where they get to know their customer’s interests in a better way and quickly modify the products in the market to enhance the growth of the business. 

The D2C approach means much more flexibility in the pricing, promotions, and marketing of the product and you have the ability to get in touch with your customers on a daily basis.

Why is this the perfect time to launch your Direct-to-Consumer brand?

Read here: Ultimate guide to start D2C business

This is the perfect time to launch your D2C brand as with the increased lockdown implications in the worldwide people prefer not to step out and rather want to get all the facilities at home and the people feel the online channel to purchase the products as the safest and the easiest mode of interaction where the customers can choose a variety of the products. So this period is the best time to launch your product.

How to start a direct-to-consumer brand in easy steps

Here are the steps mentioned to start a business with a D2C approach

Great idea: what are you solving?

Starting with the D2C approach requires a magnificent idea of business that can differentiate you from other businesses in that domain and also from your competitors. A unique business idea plays an important role in differentiating you from others.

Know Your Customer

The second step is to know your customer whom you will be targeting for your brand product. It is the most important step as for every business it is necessary to know the customers to whom we have to serve. So the owner has to set a pitch for their customers for the product.

Market analysis and business plan

To start with the D2C approach a deep analysis of the customers and competitors as you have a strong business plan and are ready to execute it so the owner also needs to analyze any of the existing gaps that your business can fill and the owner can create a  market potential that can fill the gaps and your brand product can stand different among the brands available in the market.

Branding: articulate your “why”

The most crucial part to start with this approach is to define the brand that is going to launch is to define the purpose brand. With what vision the customers will be approached and why the customers should buy from your brand. So it becomes important to define our brand value.

Finances 

If you are going to launch D2C then the business owner must know a fair idea of the finance involved to launch your brand product. It will help you to analyze the expenses that are involved and also it will give you a possibility that you can solely handle those expenses. If Not then you can plan for the partnership accordingly.

Invest In Technology

The business Owners can define that the product is based on which technology and which current technology is in the market which is ruling the market.

ADVANTAGES Of D2C Approach

The advantages of Using the D2C approach are listed as follows:-

Higher Profit Margins

With the D2C approach, the business owners slash the middleman from the circle so no money has to be shared with them which in return is shared as higher profit money in the business owners account. By fully having control of the business the owners can increase their revenue and can emphasize the marketing and the sales strategies.

Direct Control on Brand Presence

As the business owners are getting direct control over their brand and eliminating any third party from between the channels, the owners get authority of their brand product so the changes can be made as per the market demand of the product which will create a transparency channel between your brand and your customers. The more transparency the more identity for the brand.

Disadvantages of using D2C Approach

The disadvantages of this approach are listed below:-

Increased Competition 

Since this post COVID situation, every second business owner is now applying this D2C approach as every owner wants to rule in the market with their brand product so with so many owners trying to enter the market with unique ideas because some time the same product can be purchased from multiple platforms so there is increased competition in the market.

Complex Internal management

D2C is not about only eliminating the third parties from your channel but also maintaining relationships with your inventory, payments, and managerial levels as well. 

Pandemic Effects on D2C Model

With the COVID situation getting worsening in almost every part of the world, every brand has to fear in their minds that how they will manage as people have restricted themselves, but very famous brands like Warby Parker and Casper started with the D2C approach and they were unstoppable as they showcased all their products online and allowed their customers to select the choice of the product which gained much popularity.

In the Year 2020 World Health Organization saw an increase of 30% in online shopping as compared to the year 2019. And from there the percentages are still increasing. 

When this approach gained popularity, many businesses started shifting to it and tried reopening in the month of July 2020. 

In a survey conducted in January 2021, it was found that 6 million people preferred to shop online. A major reason to shift to the D2C approach and invest in smart technology.

Which industries fit into D2C?

The industries that would fit into the D2C model approach are

1. Dairy Industry:-  The basic amenity in today’s life is Milk which is one such commodity that is required by almost every house across the globe on a daily basis. In a recent survey conducted by the World Health Organization, it is found that in every 3rd of the 5 houses there is a small child and as per the study done by WHO milk is required by every child growing in the age group of 3-12 years. But since people don’t step out, they want the milk to be delivered to their doorstep.

2. Water Industry:- The water industry is one such field that is rapidly growing and expanding where people can get the big water containers at their doorstep. As water is also considered as the basic commodity which is required by almost every house, office, hospital, restaurant, etc. So it can be supplied to each mentioned place.

3. Grocery Management:- The Grocery industry is also one such industry that has been recently shifted to a D2C approach as with the COVID lockdown scenario, only some shops were available for the daily needs, but with this approach now the owners can deliver the products to every person placing the order and maintain the stock for it as well.

4. Pharmaceutical Industry:- The pandemic situation showed a way different scenario to people where every age group required medicines to cope with the COVID and remain healthy so the pharmaceutical industry has risen to a great extent as people get the required medicines sitting at their home.

There are many more industries that fit into this D2C approach, just know your customers and plan accordingly to grow digitally.

Conclusion:- 

Using this approach to enhance your business will give the business owner the confidence to know the customer is served in a deeper way and also the owner will have the option to change their products as per the customer wish as it would be the best way to fulfill the customer demands and grow more.

Hope You Enjoyed the Read!

Ravi Garg Founder & CEO

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.