Pivoting to DTC

Pivoting to DTC

September 2, 2020

Tracy Nguyen

Technical Project Director 

Tracy has more than 15 years of experience leading complex technology and software development in areas such as in-store retail, mobile and web application development, digital signage software, Alexa skills, and digital marketing campaigns.

eMarketer reported that U.S. Direct-to-Consumer (DTC) sales will account for total ecommerce sales of $17.75 billion in 2020, up 24.3% from 2019.

That was before the pandemic. The number may significantly increase as many brands reevaluate their traditional retail and wholesale business model and quickly pivot to the DTC model. The disruptions in supply chain, retailer store closures, and increase in consumer behavior with online shopping are among the reasons why brands are shifting gear to sell directly to consumers.

DTC gives brands the ability (and opportunity) to better connect and build that 1-to-1 relationship with their customers. Brands have more control over the consumer data and can leverage that information to personalize and optimize the customer experience. They get direct customer feedback and can accommodate the customer’s needs faster and easier through their own channel vs. the distributors. Take, for example, PepsiCo’s pantryshop.com and snacks.com, two DTC sites launched within 30 days to address the increase in snacking behavior during COVID.

With the shift in consumer behavior to online, some brands are taking this opportunity to expand their digital presence, such is the case for America’s Best Beverage. For decades, the company had helped build other coffee brands and relied on sales from wholesalers. However, with the rise of at-home coffee brewing and cold-brew coffee, the company decided to launch its own cold-brew brand via DTC last month.

Or the opportunity to accelerate their plans to further invest in their growing DTC business, like Nike who last week announced it will cut ties with retail partners such as Zappos, Dillard’s, Belk and Bob’s Stores and drive consumers to the brand’s own digital channel and stores.

No doubt the DTC business is growing, as seen in a recent ecommerce platform report showing Shopify’s revenue grew 97% year-over-year in its 2020 second quarter earnings. New stores grew 71% during that same period. Even Wix recorded 3.2 million new user registrations in April 2020. But, are companies frantically setting up their digital infrastructure without a long-term ecommerce strategy just to stay afloat? Whether you need help developing your ecommerce strategy or even fine-tune your current DTC approach, Velocity Commerce Group, can help you identify the best opportunities for your business. Feel free to reach out via LinkedIn or email. Let’s Talk!

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