Why Every Brand Should Be Going Direct-To-Consumer (DTC)

1. WHY EVERY BRAND SHOULD BE
GOING DIRECT-TO-CONSUMER
(DTC)

2. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
Many companies now realize that developing a direct-to-consumer (DTC) offering
brings many advantages. Here we look at this shift in more detail and provide
examples of brands that have succeeded with DTC.
WHY EVERY BRAND SHOULD BE GOING
DIRECT-TO-CONSUMER (DTC)

3. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
The direct-to-consumer (DTC) trend, also known as disintermediation,
essentially means bypassing traditional intermediaries in the supply chain –
including retailers, wholesalers, distributors, and advertisers – to connect
directly with the end consumer. With 81 percent of consumers in the US saying
they planned to buy from a DTC brand by 2023, it’s clear that DTC represents a
significant business opportunity for organizations – and poses a very real threat
for traditional intermediary businesses.

4. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
WHY IS THIS TREND SO POTENT, AND WHY NOW?
In a word, online. If you think about it, DTC channels are nothing new. For years, farmers
have sold their wares directly to customers at farmers' markets while also partnering with
supermarkets. But as customers increasingly head online for everyday interactions and
transactions (for everything from groceries to flights), it's become easier than ever to
connect directly with them – and thereby cut out the middlemen retailers and other
organizations who have traditionally facilitated the customer journey.
Now, we're seeing a wave of new businesses that are eliminating the middlemen
altogether, such as the Dollar Shave Club, which provides shaving products directly to
consumers on a monthly subscription model. But we’re also seeing established brands
such as Nike work hard to cultivate direct relationships with consumers.

5. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
WHAT ARE THE PROS AND CONS OF GOING DIRECT TO CONSUMER?
There are a number of reasons to jump on board with the DTC trend, including:
There’s no need to negotiate with powerful third-party intermediaries, such as chain
supermarkets and department stores. For startups, trying to get a foot in the door with big
retailers can be a significant barrier to entry.
 You have total control over your brand image and the customer experience (as opposed to
selling through retailers, where you may have little control over how your product is
presented and sold).
 Costs, in some areas, are reduced, potentially allowing you to price more aggressively.
 You get more of the profit since there are no middlemen taking a cut.
 And you build a better understanding of customers because, when you sell direct, you can
gather valuable customer data.

6. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
There are advantages for the customer, as well. For instance, they get to enjoy a more personal,
meaningful connection with the brands they love while also bypassing the baffling array of choices
that big middlemen retailers often present.
So far, so good. But exploring a DTC strategy does pose some challenges for organizations:
 It can add to some business costs, such as marketing and distribution.
 It requires a strong, authentic brand.
 It requires a digital-first mindset and a strong online presence.
 Plus, it runs the risk of sometimes alienating long-standing relationships with middlemen
channels.
All things considered, the right way forward for many organizations may be to strike a balance and
invest in DTC routes while still keeping existing partnerships with middlemen alive.

7. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
NEW AND OLD BRANDS ARE GOING DTC
Let's look at mattresses as an example. Buying a mattress used to involve going to a mattress store or
a home retailer like IKEA and trying out multiple different mattresses. The kids would be bored stiff,
while you and your significant other would be struggling to remember which mattress was which. Was
it the second one you liked the best, or the 20th? Having finally decided, you then discover it’s out of
stock for the next eight weeks…
But soon, mattress shops could be consigned to the history books as new mattress brands spring up
(pardon the pun) that sell direct to consumers. In 2019, 45 percent of mattresses sold were purchased
online, with 12 percent of those coming from DTC brands – and this will only increase. Eve Sleep is one
such DTC mattress brand. Formed in 2015 with the goal of making buying a mattress as easy as
ordering a taxi, Eve Sleep offers multiple different mattresses delivered to your door with a 100-night
at-home trial. The company is doing so well; it has since branched out into selling a whole range of
sleep-related products, such as sheets, duvets, and bed frames.

8. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
Eve Sleep may have been built from the ground up with DTC in mind, but what
about established brands that have traditionally sold through intermediaries?
Many of these brands are also pivoting to a DTC model. Nike, for example, has
drastically upped its e-commerce game, and, in 2020, DTC sales at Nike
accounted for 33 percent of revenues. That compared to 13 percent a decade
ago. In other words, DTC hasn’t been an overnight success at Nike, rather a
steady and ongoing push – but one that’s clearly paying off. So if you only take
one lesson away from this article, it should be this: start exploring a DTC strategy
now. Building those DTC connections can take time, even for big brands like Nike.

9. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
WHAT IF YOU’RE AN INTERMEDIARY BUSINESS?
If I were a leader in an intermediary organization, such as a retailer or even a
bank, I’d be paying very close attention to this trend. Such intermediaries – who
have been quite powerful in the past – will increasingly be pushed out of the
equation. Therefore, middlemen companies of all shapes and sizes must start to
ask themselves, "What value are we offering for customers? Is this enough for
them to stick with us? Will customers skip us altogether in the future?"

10. © 2021 Bernard Marr, Bernard Marr & Co. All rights reserved
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have a look at my new book, Business Trends in Practice: The 25+ Trends That
are Redefining Organizations. Packed with real-world examples, it cuts through
the hype to present the key trends that will shape the businesses of the future.

11. © 2021 Bernard Marr , Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker,
futurist, and a strategic business & technology advisor to governments and
companies. He helps organisations improve their business performance, use data
more intelligently, and understand the implications of new technologies such as
artificial intelligence, big data, blockchains, and the Internet of Things.
LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is
a frequent contributor to the World Economic Forum and writes a regular column for
Forbes. Every day Bernard actively engages his 1.5 million social media followers
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