Brands looking to accelerate in the CPG space have to diversify their sales channels and meet customers where they are—online. Whether you’re just starting to think about going direct-to consumer or have been considering making the move for a while now, here are three reasons why your brand should turn to DTC today:
1. You have assets to leverage.
Leaders at CPG brands often worry about disruptors, that there’s some “little guy” who will nimbly take a big bite out of the market. When Mars Petcare came to us to help them innovate and go DTC, they cited increased competition from startup brands like Farmer’s Dog and Ollie. And we’ll tell you the same thing we told them: as an established brand, you have a unique advantage over any newcomer—you have all the assets to create something new, more so than any disruptor entering the market.
When you make innovation a true priority, you can own the competition—by inventing it yourself. Best of all, you can do it using assets that you already have: manufacturing efficiencies, in-house talent that is diverse in skills and expertise, a robust database of consumer insights, and much more. Everything that fuels your business now can drive what’s next. Unlike much of the competition, you’re not starting from scratch.
2. You’ll own the shopping experience.
When you have a DTC channel, you’ll be able to get more personal, speak directly to your audience, and own the entire shopping experience. The DTC channel can serve as an added value to the on-shelf experience in a retail store. Take Function of Beauty shampoo. Consumers can find out which product will work best for them on the Function of Beauty website and purchase it either online or at a local Target.
An online DTC presence also gives you breathing room from your competition. When shopping direct, customers are no longer looking at your product within direct eyeshot of your competitors’ products. Plus, DTC gives you the ability to upsell and/or bundle products that wouldn’t typically be displayed next to each other in retailers (ex: coffee grounds and mugs). These factors help reinforce brand loyalty amongst your customers.
3. You’ll have access to customers.
When you have a DTC channel, you’ll have a direct line to your customers. Not only will this help you build stronger relationships, but it will also give you the data you need to better target your marketing efforts and ultimately create the products your customers want. If you rely exclusively on retail partners to sell your products, you may miss out on gaining information about your customers that can help you better serve them. When you sell DTC, you not only have access to first-party data, but you own it.
This will set you up for success as privacy regulations phase out third-party cookies, limiting access to data from outside sources. Owning first-party data will give you a competitive advantage and give you information to fuel research and development—and growing your database will allow you to drive down advertising costs.
Ready to discuss how your brand may be positioned to add a DTC channel? Get in touch.