The backbone of the consumer packaged goods (CPG) business model was stable for decades — shoppers consumed brand and product advertising and were enticed to visit stores to make purchases.
With the emergence of ecommerce 20+ years ago, CPG companies began dreaming of bypassing their distribution networks and selling directly to consumers. However, that dream has been out of reach thanks to the significant challenges that come with launching a direct-to-consumer (DTC) digital channel.
Having built up complex networks of distribution and retail partners over many years, selling direct-to-consumer is no easy task.
DTC Challenges
- Most CPG companies typically ship large quantities of products to distributors and wholesalers, who in turn put them on shelves in stores where consumers can purchase them. So it’s terribly disruptive and expensive for CPGs to shift to a business model that drives a large number of small transactions with one or two items that need to be individually delivered to customers.
- For companies with “Buy Now” buttons, it may be time to transform that into an engaging brand experience that keeps customers on their site so they can obtain valuable customer data rather than redirecting consumers to shop on their retail partner sites.
- For companies with many brands and complex global operations, the approach of each brand or country leader defining and executing their own digital and DTC strategy is giving way to a more efficient and cost-effective approach of standardizing their global digital operations on a single set of commerce solutions and services.
The DTC trend that many companies are considering is all about getting closer to their customers and increasing the lifetime value of that customer relationship. But accomplishing that requires a closed-loop process that enables CPG companies to attract new consumers to their brand, create an experience that keeps them coming back and deliver customer service and support. Meanwhile, consumers expect engagement with their favorite brands that lets them find and purchase products without being sent someplace else, receive products in a way and timeframe they have come to expect and the ability to provide reviews and engage through social channels in a manner that creates loyalty and drives others to the site.
But that’s not all. The rise of online marketplaces and social media channels have further complicated channel strategies and DTC initiatives for CPG companies. Although more options for consumers mean more opportunities for sellers, brands struggle with deciding where to invest. Should they launch a DTC storefront, launch their own marketplace, test third-party marketplaces like Amazon and Walmart or create a B2B ecommerce experience? The answer for many is “All of the above”.
DTC Solution
Fortunately, now there’s a way for CPG companies to quickly and easily launch their own DTC business, connecting with customers wherever they are, without disrupting the entire organization or creating conflict with their distributors and retail partners.
Direct-to-Consumer (DTC) Launchpad is a commerce platform and fulfillment solution powered by VTEX on AWS for CPG companies that want to sell directly to consumers. It allows brands to give customers Amazon-level fulfillment and delivery service while creating an experience that reflects their brand and generates customer data they can use for marketing and product development.
With leading commerce, logistics, fulfillment and delivery pre-packaged to deliver a seamless, end-to-end experience, brands can launch and scale DTC digital commerce and online marketplace operations faster and more cost-effectively than ever before. DTC Launchpad gives CPG companies the power to:
- Deliver digital commerce and online marketplace experiences for all their brands across any channel or customer touchpoint;
- Create and manage compelling digital offers and promotions;
- Offer subscription services to consumers;
- Give consumers the ability to choose the same 1-day or 2-day delivery options that Amazon offers;
- Run that Super Bowl ad with confidence knowing they’re backed by the unlimited scalability of AWS and the delivery capacity of fulfillment by Amazon.
For any CPG company, DTC Launchpad is the “easy button” to test new direct-to-consumer business models, sales channels and go-to-market strategies without unnecessary cost, and risk, or turning your organization upside down.
