Strategy

Why going direct-to-consumer is table stakes and how to develop your direct-to-consumer strategy

Chris Perry
Chris Perry March 15, 2021
Why going direct-to-consumer is table stakes and how to develop your direct-to-consumer strategy

At the turn of the year, digital commerce was the #1 growth driver both globally and locally in the U.S.  

By March 2020, the lockdown and containment initiatives spurred by COVID-19 accelerated digital commerce, by making it a critical lifeline for shoppers, brands and retailers alike.  

COVID accelerated ecommerce plans dramatically across every industry, especially CPG. Those CPG brands that rose to the opportunity are now realizing a competitive advantage in the market, while building a direct-to-consumer (DTC) foundation for the future.

Brands become retailers

The boundaries between retailers and brands have blurred on both sides.  Countless digitally-native brands, like Harry’s, Casper, Quip and many others, have come on the scene, driven by  an indisputable  market opportunity, low barrier to entry, and a more agile, responsive go-to-market model. Furthermore, many national CPG brands have recognized the benefits of direct-to-consumer, and have started to develop and test more DTC initiatives, both in-house and via acquisitions and partnerships.  

Before COVID, more than 44% of scaled CPG brands already had, or were planning to, launch their own DTC models in-market.  However, due to the pandemic, DTC has quickly become a higher priority for many brands.  

For example, COVID has had a major impact on inventory availability and retail access. This has driven many well-known CPGs to launch new DTC initiatives.

Just to highlight a few; in April 2020, Kraft Heinz launched Heinz to Home in the UK, and PepsiCo launched Snacks.com and PantryShop.com in the U.S. to make their food and beverage essentials available and accessible to their shoppers in each market.

Why should brands go direct-to-consumer?

Given an unprecedented scenario like COVID-19, shaking shoppers’ confidence and risking their basic access to essential goods and services, why else have CPGs been prioritizing a DTC model and how should they be strategizing to expand an offering beyond basic product availability and accessibility?   

Download this executive brief to learn the strategic reasons CPGs should be prioritizing a DTC model and the critical questions leaders should be asking to help define a differentiated value proposition to ensure a successful and sustainable DTC venture.

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