The acceleration to D2C for wholesalers and brand manufacturers

How the Corona pandemic put D2C (Direct to Consumer) in 5th gear

The corona pandemic is not only turning the world upside down on a social and societal level: the crisis is also leaving its traces commercially. That is certainly being felt by wholesalers and brand manufacturers, who are now being forced to re-strategize their sales channels. The main message: B2B companies must find ways to sell their products and services directly to the end customer.

But what are the main D2C trends that wholesalers and brand manufacturers should consider? In this blog article we will explain.

The rapid changes came like an earthquake for many companies. Already during the first lockdown, the principle of 'survival of the fittest' came into effect: the companies that adapt well to the new situation (using the best technologies) not only survive the crisis, but ultimately emerge even stronger.

Working from home has changed consumers

McKinsey has conducted research among American consumers and it shows that more than 75% of the shopping habits have changed and the consumer has switched to new brands. This was due to the following three reasons:

1. Value
2. Availability
3. Ease

Another important factor is the confidence consumers have in a provider. Companies that make optimal use of an eCommerce environment with the associated payment and delivery methods can compete in the new normal.

The forced orientation towards new sales channels pushed many trading companies towards direct-to-consumer (D2C). While the move to D2C was a trend at first, it became dire necessity during the pandemic. The reasons are obvious: more customers buy online and more brick-and-mortar stores are affected by restrictive measures. Although we are still in the early stages of the D2C revolution, the growth of this way of selling will leave a significant mark on the evolution of the industry.

D2C in this period of time

Many B2B wholesalers encountered a special situation during the first lockdown: the products and consumers were there, but the pandemic had disrupted or paralyzed the main sales channels. The innovative vanguard responded by opening D2C sales channels, making products from wholesalers and brand manufacturers directly available to consumers.

The corona pandemic exposes some D2C trends that will play an even more prominent role:

• The pandemic has a disruptive effect on the market. The trend from B2B to D2C is permanent. A return to pre-COVID-19 status quo is unlikely.
  
• Digitization is increasingly important for trading companies and brand manufacturers. The availability of physical store channels is uncertain (lockdowns), while digital channels offer plenty of opportunities to test new products, (export) markets, target groups and sales strategies.
• D2C offers a lot of scope for recommerce and setting up one-stop shops. The personalization of customer journeys is an increasingly important part of the sales strategy of successful trading companies and brand manufacturers.

The benefits of D2C

D2C has important advantages that B2B companies can also reap the benefits of in the coming years.

• A direct relationship with the customer solves distribution bottlenecks. Brands are reducing their distribution costs and gaining more control over their profit margins by eliminating middlemen.
  
• With a good D2C strategy you get more out of your data. This gives you insight into patterns, trends and customer needs. The result: better segmentation of customers and more effective marketing strategies.
• Brands gain a deeper and more meaningful connection with their customers through the expanded personalization options. D2C gives you more control over your marketing and sales channels. This allows you to bring all branding and conversion activities into a single funnel, making it easier to create a strong brand identity.

Direct-to-consumer is one of the eCommerce trends that wholesalers and brand manufacturers must respond to. Download the whitepaper and read more trends that are crucial in making a decision for your own organization.