We are seeing a revolutionary new era develop for manufacturers, consumer packaged goods (CPG) and other categories being forced to take on the direct-to-consumer (DTC) mindset and pivot towards a DTC model. These brands are using DTC to distribute their products and reinvigorate their commercial growth strategy.
But what are the benefits of DTC for CPGs?
The pandemic has seen retailers increasingly shifting to e-commerce in order to build and accelerate customer connections; as well as avoid further revenue loss. In our recent survey, we saw that direct-to-consumer (DTC) deliveries of vegetable and recipe boxes were being chosen by 25% of new customers of which nearly three quarters say they are likely to carry on. We are seeing a revolutionary new era develop for manufacturers, consumer packaged goods (CPG) and other categories being forced to take on a DTC mindset and pivot towards a DTC model. This is allowing these brands to distribute their products and reinvigorate their commercial growth strategy.
But what are the benefits of DTC for CPGs? We have collected a handful of benefits below:
1. Builds consumer relationship
s & connections
Digital engagement and data collection against target customers allows retailers to understand their consumer like never before. Data-driven feedback can ensure new product development (NPD) or product evolution is aligned with current moving consumer trends, tastes and new habits. This route to market allows us to better understand our targets and iterate our products to serve our customers more effectively. In the long term, this should improve our customer lifetime value.
2. Builds & sustains brand loyalty
Companies can now control the end-to-end customer experience and further deepen brand loyalty through reviews and tailored personal communication. Subscription models have allowed brands to remain relevant by enabling the customer to customise and feedback on their orders on a regular basis. This has unlocked more of an understanding of what customer’s value.
3. Allows for innovation & agility
Through opening the door into DTC, brands and larger CPG organisations can better target their audiences based on the consumer’s path to purchase, their connected lifestyle behaviors, interests and market changes. With an e-commerce presence and digital growth strategy, brands can pivot and iterate their strategy. Above all, they are better set up for constant innovation.
Here are some call out tips to improve your DTC strategy:
- Personalise your conversations with your online customers
- Create seamless consumer service through an integrated omni-channel strategy
- Enhance your website, social and email marketing strategy
The pandemic has carved a new era, changing the way brands across different industries think about connecting consumers to their products and nurturing these relationships. We are progressively seeing CPG’s growth strategy including a DTC component to provide their agility to tap into the power of e-commerce, as a major market driver.
At KICR we are helping to reinvent the F&B industry, thinking and doing things differently – and innovating into a new routes to market is no exception. We believe in the value of complete immersion into a category or market before you jump into innovation – both to experience the category for yourself as well as drawing on outside experts and consumer insight to round out understanding. Our in-house expertise in everything from food development, to insight and ideation, right across to DTC commercial growth strategy, means we will challenge and support you. We want to maximise what a direct to consumer offer might look like for your business.
Get in touch to discuss exciting opportunities, innovation and DTC tactics – we love a challenge!