Definition: D2C

What is D2C?

D2C, short for direct-to-consumer, is a business model where a manufacturer or brand sells its products directly to consumers, bypassing traditional retail intermediaries such as retailers, wholesalers, or distributors. This approach enables companies to have greater control over their sales, marketing, and distribution strategies while also establishing a closer relationship with their customers.

How does D2C work?

In a D2C model, businesses typically sell their products through their own website or other online channels, such as social media or marketplaces. They may also leverage targeted advertising, influencer partnerships, and other digital marketing tactics to reach their desired audience.

However, this means that there is a need to invest in additional areas such as eCommerce infrastructure, logistics, and customer service, which are usually handled by retail intermediaries but will now have to be handled by the business itself.

What are the advantages of D2C?

One of the main advantages of a D2C model is that it allows companies to capture more of the value chain, as they are not reliant on third-party retailers to distribute their products. This can result in higher profit margins and greater control over pricing, inventory, and branding.

A D2C model can also provide companies with valuable insights into their customers' preferences and behaviors. By selling directly to consumers, companies can collect data on their customers' purchasing habits, demographics, and feedback, which can inform product development, marketing strategies, and overall business decisions.