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Direct to Consumer Business Changes the Game, Keeps Brands and Retailers On Their Toes

Ecommerce has been around for well over 20 years and is not slowing down anytime soon.  It has become the driving force of online business and is responsible for constantly evolving consumer shopping habits.

According to a report by the US Commerce department, ecommerce remains a particularly bright spot for the retail industry, as U.S. online retail sales grew faster in 2016 than they have in the past three years and continue to represent a healthy chunk of total retail spending growth.  

Some of the most impactful changes that have taken place in the ecommerce space in the last 10 years include:

  • The rise of online marketplaces.
  • The seamless shift to using mobile devices for online shopping.
  • The tremendous growth of online and digital marketing and advertising.
  • The practice using of digital modifications or enhancements to reality in sales and mainstream consumer shopping.

The rapid growth of direct to consumer way of business

Direct to consumer (DTC) companies are not only giving brands and retailers a run or their money, but are making them rethink their business strategy, they way they interact with consumers and they way they collect data on consumers.

Everyone in business is looking for ways to cut out the middleman to save costs and the internet has made it easier for companies to go directly to the consumer. Now there are billions of smartphone owners who have a computer in their pocket and can demand services and goods instantly.

With the rise of mobile, social and cloud technologies, customer expectations continue to increase. More than ever, customers demand a more seamless experience. For many businesses, customer experience is the new battlefield—a competitive advantage that attracts and keeps customers.

When wholesale manufacturers sell through retail distributors, they have very little say on how the product is sold. They’re at the mercy of the distributor to ensure that the customer leaves the store (or the website) happy and satisfied. By selling directly to consumers, companies can envision how the customer journey should take place and execute the tactics required to make that vision a reality.

 Investing in direct to consumer

Whether it’s a direct to consumer company or strategy, big brands and retailers are moving forward and investing heavily in what could change them for the better.  According to Market Realist, Nike has focused on the direct to consumer channel within their business which is responsible for 24% of the brand’s revenue. Nike plans for their DTC sales to grow to $16 billion by 2020.

One of the most appealing reasons to sell with the direct-to-consumer model is the opportunity to collect massive amounts of consumer data. This makes it incredibly easy to learn customer behavior, track customer responses, and develop targeted lead lists that ensure time and money are not wasted on selling the wrong products.

With companies building closer bonds with their customers by getting to know them more intimately, they are investing in processes that talk directly to their customers. As some experts predict, the brand that understands and communicates more closely with its customers is going to win.

By Lolita Alford

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