By Alarice Rajagopal & Lisa Johnston
Direct-to-consumer has long intrigued consumer goods brands, but complications surrounding logistics, channel conflict and corporate buy-in have historically led to a reluctance to do more than experiment.
When we examined DTC in 2017, CG participation was described as a “slow burn.” But, as it has with e-commerce, COVID-19 abruptly poured a heavy dose of accelerant onto the fire, and the channel is now driving growth across the entire consumer goods industry.
While it’s growing in almost all cases, that doesn’t mean every brand is having an easy time of it. Opportunities abound, yes, but competition is fierce. Even the brands that have long played in the channel can have trouble striking the right balance.
But consumer behavior, especially with younger generations, has shifted to a point where brands are now expected to market directly to consumers. With more time to scroll on their phones and engage with brands, CGs that fail to establish this connection and provide education are not only losing out on digital sales, they risk ceding share once free time is no longer quite so ample.
Read on for research findings, market perspectives, and case studies from digital natives to traditional brands and everything in between.
“Direct-to-consumer — and this is true across almost every industry we track — is proportionately selling at a higher growth rate than the total market,” says Marshall Cohen, NPD Group chief industry advisor, retail.
CGs that experienced more than 75% growth in DTC sales in the
last 12 months
Source: CGT Snapshot Survey
To collect a snapshot of the industry, CGT polled its audience in January on the challenges, opportunities and expected tech investments in DTC selling.