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A Brand Manufacturer’s Guide to Direct-to-Consumer E-Commerce

A Brand Manufacturer’s Guide to Direct-to-Consumer E-CommerceOnce upon a time, the lines between manufacturers and retailers were clear. Manufacturers made widgets, retailers bought large amounts of said widgets, and consumers bought widgets at stores. There were exceptions to this model – the first Niketown, for one, opened in 1990 in Portland, Oregon. However, while the advent of online shopping a few more years into that decade gave rise to a host of new pure-play online retailers, the fundamentally linear model of the brick-and-mortar world – manufacturer to retailer to consumer – remained largely intact.

This linear model no longer rules. Thanks to widespread adoption of broadband, mobile, and social technologies and applications, and the emergence of Internet-of-Things technologies, consumers have access to more information and buying opportunities than ever before. They can compare pricing, read product reviews, complain about poor customer service on social media platforms, order groceries at 3 a.m., and so on. As a result, consumers have higher expectations of both brands and the retailers that sell those brands. Meeting these expectations is forcing brand manufacturers to rethink their relationship with, and dependence on, retail partners for getting their goods and services to consumers, and whether they themselves should begin selling directly to consumers, otherwise known as D2C.

This report examines the D2C model from the perspective of the brand manufacturer. It describes the drivers of D2C and the mindset changes that manufacturers will need to make, outlines the processes and capabilities that a manufacturer will need to have in place in order to implement a D2C strategy, and provides a model to guide manufacturers to the five stages of D2C maturity.

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