Without middlemen, or what is the D2C model

Anna Meller

he D2C, or direct-to-customer, model is gaining popularity in online sales. In 2019, the percentage of consumers making regular D2C purchases was 49%, while in 2022 it will already be 64%. What is the direct sales phenomenon and how can we tap into its potential? Read the article and find out!

D2C sales - what's the fuss about?

The name D2C (Direct to Consumer) literally means: direct to consumer and is an increasingly popular form of sales in, among others, the fashion, cosmetics, electronics and furniture industries. The D2C model involves the manufacturer selling products directly to the target customer, bypassing external distributors. The D2C concept involves dispensing with third parties who mediate the traditional journey of goods from the manufacturer to the final customer and replacing them with the manufacturer's own sales channels. 

In practice, it boils down to the fact that brands that produce also distribute their goods both in their own traditional outlets and online on their own sales pages, and package and distribute the goods purchased by buyers themselves. The D2C model therefore omits links such as distributors, marketplace platforms or other resellers, operating both offline and online. 

Benefits of the D2C model 

1. D2C: greater business independence 

Managing the entire supply chain, from the production site to the final customer, allows the entire D2C infrastructure to be designed with precision, which is decided solely by the manufacturer. Thus, the company becomes independent of external requirements dictated by retail chains or marketplace distributors, such as delivery conditions, returns, strict product information guidelines on websites, etc. 

2. D2C: greater financial independence

Implementing a D2C model means greater control over the profit and loss account. The company thus becomes independent of price changes across the network of subcontractors and intermediaries, which are generally not negotiable with large retail chains and online marketplace giants, especially if there is a smaller, unknown player on the other side. 

3. D2C: no margin for intermediaries

In the short term, the D2C model usually requires costly investments in building online tools, promotion and setting up logistics facilities to handle D2C orders. 

In the long term, the implementation of an in-house sales channel allows for a significant increase in revenue and the investment more than pays for itself. The costs of operating your own infrastructure are lower than the services of intermediaries, who take a margin in traditional models. In order for the D2C model to be profitable, however, it is necessary to rely on proper marketing and intensive recognition building.

4. D2C: greater efficiency in sales monitoring and production management

Managing one's own sales channel allows one to precisely monitor customer behaviour at each stage of the purchase path and thus efficiently diagnose the links that reduce sales potential and fine-tune products and sales forms to suit customer preferences. This is not possible even with the most advanced analytical tools on the marketplace or through external sales outlets, where products are often lost among the competition and feedback from the market usually does not reach the manufacturer.  

While in the case of traditional sales networks, companies are often defined by contracts specifying the volumes and type of goods the company supplies, in the own sales channel the limitation is only the demand for services and, with increased demand, the company's potential to produce the quantity desired by the market. Adapting production volumes to the level of demand allows costs to be optimised, as money is not frozen in products sitting in warehouses. 

D2C tip 

5 D2C: Higher quality communication with customers

The own sales channel shortens the distance to the customer by several additional links that exist in the traditional B2C model. An entrepreneur operating in the Direct to Consumer model thus has direct contact with the customer, both in offline and online shops. 

In D2C sales, it is the manufacturer who is responsible not only for quality, product design and aesthetics, but also for communication and after-sales service. The company has the possibility to easily communicate upcoming changes, novelties or promotions, which is often limited in cooperation with intermediaries or involves additional costs, such as an additional paid information campaign. 

6. D2C: easier market entry with new products

In traditional shops, openness to new products is governed by its own rules and is usually directly proportional to the amount of budget spent on promoting the new product. A new, unknown product means more risk for the external shop. Such barriers disappear in the D2C model, where the manufacturer has more opportunities to "experiment" with the offer and observe the reactions of customers.

Novelties can be easily communicated using display tools, without having to pay extra for, for example, attractive shelf space, as is the case in retail chains, or highlighting at the top of the page, as is the case in marketplace sales. 

7. D2C: a more precise sales strategy 

Managing each stage, from production to sales, gives greater control over effective sales and enables access to valuable data that companies obtain and communicate in direct contact with consumers. On the basis of an effective diagnosis of needs in the Direct to Consumer model, it is the entrepreneur who decides on all parameters, such as the type of product, the graphic design of the product and packaging, the form of product presentation on the website and in the shop, the form and content of the information presented, the individual stages of the purchase path.

8. D2C: advanced personalisation and product customisation

In the D2C model, the seller has more control over the design of each product and its purchase path. A company that sells directly to its customers has the chance to get to know them better and can afford more precise personalisation.  This applies to aspects such as the design and usability of the product itself, the packaging, the frequency of delivery, the way the product is presented or the terms of payment. The company decides on all the variables itself, does not have to adapt to the needs of the market players it works with and has the chance to resonate better with market expectations.

D2C channels also enable in-house market research, quizzes or surveys. In this respect, the creativity of companies is immense - they design quizzes to define customer preferences in an entertaining way, tutorials, shopping in different quantity options with the benefit of scales, attractive forms of delivery and interactive product interaction experiences, etc. Better response to market needs for customers means higher quality in the shopping experience, for which the customer is willing to pay more.

Examples of D2C companies

Tchibo - the D2C model for decades 

The Tchibo brand, which has been producing coffee for more than 60 years, has successfully pursued the D2C model since its inception. The company started in Germany by distributing coffee by mail order. Today, Tchibo is one of the largest coffee retailers and producers. It employs more than 12,000 people across Europe and has more than 1,000 of its own shops. 

In the D2C model, Tchibo combines professional coffee expertise with an offer of interesting products offered to customers on a weekly and seasonal basis. Sales take place both in stationary shops and on tchibo.co.uk.

Castomats - a practical D2C tool 

Castomats are lockers for free collection of orders from Castorama's online shop up to two hours after ordering. Castorama's caches are a D2C alternative to courier delivery, which has increased the appeal of online shopping at Castorama. Castomates resemble other parcel caches on the market, but have a shorter delivery time and more spacious boxes. 

Castomats are located at each Castorama stationary shop, outside the building, so they operate independently of shop opening hours and are available to customers 24/7. Larger orders are immediately packed into a shopping trolley for a convenient drive to the car.

D2C at Husse

Husse is a Swedish manufacturer of dog, cat and horse food with more than 30 years of experience in the market. The main mission of the Husse brand is to promote a healthy lifestyle for animals. Prior to the creation of the new online shop, sales of Husse products were mainly done offline, orders were manually entered by distributors/franchisees into the administration panel. When a target customer wanted to buy food, they were assigned to a specific consultant who delivered the product to the address indicated. 

The new online shop is not only a sales platform, but also serves as a source of knowledge for four-legged owners on how to choose the right food in line with the brand's mission - that is, taking care of the best possible health of their pets. The aim of creating a new sales platform is to present Husse's broad offer, which focuses on proven product quality and professional customer support in the selection of the assortment.

Husse case study

D2C at Lancerto

Lancerto is a premium clothing fashion brand that, since its emergence in 2008, has focused on delivering a high-quality shopping experience for customers in every sales channel in line with its omnichannel strategy. The brand is committed to the highest level of customer service. offers convenient delivery models and makes it easy to choose the right size. In addition to its sales function with facilities for size selection and delivery, the website also acts as a compendium of knowledge and inspiration on fashion and style. 

As part of the improvement of the Direct to Consumer channel, the new e-commerce implementation created in 2021 simplified the shopping path and provided online customers with a shopping experience similar to stationary shops. Content and layout are designed to emphasise the premium brand character and justify product prices, while technical solutions on the site enable information and products to be more efficiently adapted to changes in fashion and the market environment. The right product selection is assisted by a sizing assistant, which analyses, among other things, the shape of the belly, shoulders and age also affecting the changing silhouette and on this basis selects products with the right size and cut.

Lancerto case study

D2C by Semilac

Semilac is the market leader among hybrid nail polish brands. The brand's growing popularity and dynamic sales growth led the company to make changes to the shopping experience. Semilac relied on a professional e-commerce implementation, which streamlined operational processes in selling products in the D2C model. 

The new site allows large daily sales volumes and sales peaks of up to thousands of orders to be handled efficiently. It also enables active co-creation of multi-channel sales strategies with a particular focus on social commerce. On the website, customers can find inspiration pointing to specific products and sign up for training on current trends.

Semilac case study

D2C at the Rijksmuseum

The Netherlands' most famous museum, Rijksmuseum, visited by 2.7 million people a year, has launched an online ticket-buying website and a shop with books, decorations, items for the home and even artworks. Sensational stories about the artworks on display at the museum, interactive videos on works by Vermeer or Rembrandt provide a visually rich form of online promotion for the museum.  

The aim of the website is to guarantee an experience both of exploring the exhibition and of shopping in the online shop analogous to a visit to a museum and to display a range of products inspired by the museum's collection, as well as inviting people to visit the actual museum. 

Direct to Consumer is a challenge

While in retail chains and virtual marketplaces, the manufacturer gains access to a high-potential market from the outset, in which he has the opportunity to increase his market share with the help of pricing tools, as a rule, in the D2C model, without the time- and cost-consuming investment in promoting his own sales channel, the best product will not reach the consumer. 

In D2C, the basis for success is an attractive and optimised sales page that is more in tune with customer needs than the online shops and markeplaces of the intermediaries. It is supposed to add value to the user experience and provide a competitive advantage for its own channel. 

A D2C strategy therefore primarily requires the fine-tuning of an e-commerce channel that will attract customers with quality and the creation of communication activities from scratch in order to build adequate traffic rates and market interest in the virtual or offline shop. For entrepreneurs previously operating in the B2C model, the transition to D2C therefore often requires fundamental changes in the company and the establishment of new teams to handle distribution channels and marketing. On the other hand, a stumble in the customer relationship in one's own channel involves a much higher risk of losing the market, which may turn away from the channel in question, which is less of a risk with a diversified B2C business.

Direct to Consumer - a model with a future

Direct to Consumer brings communication, marketing and sales benefits through better knowledge of the consumer, who is close to his or her brand, rather than appearing only at the end of the entire sales chain through intermediaries, as is the case with B2C models. The brand's interaction with the target group translates into greater flexibility for the manufacturer in relation to market preferences and better fulfilment of customer needs. The effect of introducing the D2C model in the long term is a reduction in sales costs, as the margin in D2C goes exclusively to the manufacturer and not to intermediaries, as in traditional forms of sales. 

Companies are increasingly opting for a parallel D2C model in addition to the existing B2C. In the current times of crisis, an integrated D2C + B2C strategy minimises the risks associated with the D2C model alone and makes this sales model a "second leg" on which the entrepreneur has the chance to gradually expand the market in a secure way, increase sales efficiency and increasingly confidently build his or her position on his or her own terms, unrestricted by distributor guidelines. 

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