What Is Direct-to-Consumer Marketing?
Direct-to-consumer marketing, or D2C marketing, is a strategy in which a company promotes and sells its products or services directly to consumers, cutting out the need for any intermediary retailers. D2C marketing is essentially the new and improved mail-order catalogue: Consumers buy directly from online suppliers and receive their purchases in the mail.
D2C marketing differs from more traditional business-to-consumer, or B2C, marketing, which relies on a retailer stepping in between a manufacturer and customers. Since these retailers typically sell the products of several manufacturers, an individual manufacturer can’t control whether its product is chosen over a competitor’s.
Direct-to-consumer marketing allows suppliers to provide an end-to-end brand experience — from making a winning product, attracting and marketing it effectively to customers, delivering the product or service and owning customer communication and experience. This direct interaction with consumers from start to finish also means that suppliers can collect customer data and refine their offerings to address customer pain points.
Pros of direct-to-consumer marketing
More control. D2C brands have maximum control over their product, reputations, brand messaging and customer service.
Access to customer data. Direct-to-consumer marketing makes it easier to acquire customer data to get a clear picture of buyer behavior and create more conversions while delivering unique, personalized experiences.
Easier to build customer relationships. Because manufacturers that use direct-to-consumer marketing directly interact with people that buy their products, brands can make improvements on their offerings based on customer feedback, ultimately improving customer loyalty.
Cons of direct-to-consumer marketing
Supply chain coordination. Brands that use direct-to-consumer marketing can face challenges in managing their own supply chain to ensure they have the appropriate inventory.
Conversion. D2C brands often stand apart because they feature exceptionally low costs and/or free trials. Though free trials attract potential consumers, D2C brands run into problems with consumers frequently canceling at the end of the trial or paying for no more than a couple months of service.
Requires additional expertise. Beyond creating a great product, D2C companies have to know how to acquire and retain customers, understand shipping logistics and devote more time and resources to processes that could otherwise be outsourced to intermediary companies.
D2C marketing examples
Direct-to-consumer marketing is most popular with online retailers. An e-commerce business keeps overhead costs low, which in turn allows the business to price its product lower than the competition and better attract customers. D2C marketing lends itself easily to subscription models, where a consumer agrees to a recurring purchase of a product or service at a certain cadence, such as monthly. Here are some examples of popular direct-to-consumer brands:
Dollar Shave Club.
A version of this article originally appeared on Fundera, a subsidiary of NerdWallet.
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