What Are The 5 Marketing Strategies – What is DTC trading? Directly to brands and consumers. d2c vs ib. DTC on Amazon and other stores
Let’s talk about D2C, also known as direct-to-consumer marketing, in terms of selling products on marketplaces such as Amazon and Ebay. People who have little idea about this idea will not agree, because selling in the market is not D2C, but B2C. What can I say… don’t jump to conclusions.
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Now, after the start of the COVID-19 pandemic, the lines between these concepts have become blurred. Looking forward, the use of marketing strategies gives D2C companies an undeniable advantage over their competitors. In addition, we are here to give you the tools to make sales at the supermarket by being able to manage orders, products, and prices in one place. See more about how it works:
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Direct-to-consumer, as you can understand from the abbreviation, is the sale of goods / services directly to the buyer, bypassing all intermediaries. If you look at B2C, there are 1 or n number of stores and products reach the buyer through them.
We will talk about CONs and PROs later, but for now we want to remember that any manufacturer or owner of their own brand can use the DTC format.
Years ago, the concept of DTC marketing was only heard in the pharmaceutical and financial sectors. Now, the situation has changed a lot.
Direct-to-consumer marketing first appeared in 2010. Warby Parker, an online store that sells eyeglasses and sunglasses, used a direct-to-consumer strategy. the first time. They focus their products not on retailers but directly to consumers. Does it work for them? Yes and how! His income in 2019 is $250,000. They sell through their online store and offline stores across the US and Canada. This is a great example of a direct-to-consumer product. Now do you understand what the dtc symbols mean?
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In fact, I am not sure about the date of the first appearance of the D2C deal. This pattern was known even before the invention of electricity and transportation. But back then it was not like now. Long distance from factories to the city, instead of cars it’s horses… you know. The first sellers more or less in this field can be considered as farmers who find their own customers and work for their own satisfaction on a small scale.
This strategy is better known as direct selling. Today, this model is in competition and has gained more and more popularity every year. It looks like this:
BTC is considered a traditional form of trading. If you use these two types of transactions, they will look like this:
For some companies, this is important. When you have that kind of freedom in your pocket, you can take your brand to the highest level.
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However, do not think that in the competition D2C vs B2C, the former model is ahead of the rest of the world. As with everything, direct selling has its disadvantages, which is why few people choose it.
Both strategies have their advantages and disadvantages but … for those who want to be leaders, not average, for those who want to achieve maximum results, but not collect the crumbs from the monopolists, we recommend that you choose direct sales. Yes, it’s hard, but who said it would be easy?
Take, for example, the Quill brand, which sells stationery. It is the best example of D2C competition with Amazon and Walmart. Can you hear the level? In this article we will not go into detail how to create a brand / company in the DTC model. The products that we can offer are suitable for existing DTC companies and for those who have chosen to sell more products in the market. If you are one of these, we offer you to know the tariff plans:
Warby Parker. As we already know, Warby Parker started direct sales today. Many B2C companies do not like this type, simply because it disrupts the traditional sales model.
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At that time, more than 80% of the high-quality retail products were controlled by – Luxottica. Because of the so-called horizontal equipment, the gear is very expensive, mainly because of license fees. The good thing about this chain is that everyone is afraid and dependent on each other, except for the main one, Luxottica. Because of these large models, the glasses are very expensive, and middlemen have to reduce the price in order to sell.
After analyzing all this, Warby Parker arrived at a vertical concept where everything is in one company, for example – raw materials, warehouses. All outsourcing operations have been eliminated.
You say this is a big expense and risk, and it is, but Warby Parker has removed the most unnecessary products, in his opinion, stores. It has created a very simple online store. Customers can choose multiple frames, request a free trial and use the glasses for 30 days for free. After suffering such a debt, Warby Parker began to gain popularity, and the business soon received a large market share from the monopolist Luxottica.
An unemployed businessman at the time, Michael Dubin, managed it. He analyzed the market and found Gillette’s three main problems – high prices, horizontal sales chain, which increases the price, and the complexity of the shaver concept itself.
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The 2012 Dollar Shave Club campaign was a gift. In just two days they received 12,000 orders… so far the view has exceeded 27 million, can you imagine how many orders?
Seriously, why would you want a razor with a flashlight, back scratcher and 10 blades? Just a razor! Grandpa uses a razor, and he has polio…
Michael Dubin simplified the razor concept without sacrificing quality. It creates a unique business. And, most importantly, he chose D2C – he spoke to the consumer directly, made the production process, removed all the unnecessary elements and voila – the rival Gillette, came on the way, in the American business – №1. And what shaver do you use?
All the birds. This company was founded in 2016. Despite its short life, Allbirds already has more than 200 million dollars in revenue by 2020. You may wear sneakers or clothes from Allbirds, because that they are eco-friendly. This is an example of how money can be saved from the lack of middlemen to the quality of the product.
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Before finding Allbirds, materials such as nylon were believed to be classics. It is cheap, durable, resistant, but it is not natural and its products create problems. All attempts to make shoes and clothes from environmentally friendly materials have failed, because the price has risen in B2C.
Founder Tim Brown did a market analysis and chose D2C. As we have seen, the result is very good. The best quality and eco-friendly materials are used in affordable sneakers/clothing. They are like nylon.
Nike. Everyone knows the company with an interesting history, but we want to pay attention to the period from 2011 to 2020. In 2011, Nike started direct sales. After one year of direct sales, this segment accounted for 16% of the company’s total revenue. In 2020, it is already 35%. In the next few years, Nike will reach a stage where direct sales will make up the majority of the company’s profits. This company’s strategy shows the importance of this segment and the positive expectations for the brand, and it’s not about money, it’s about quality.
I would like to focus on the period from 2017 to 2019 when. Nike has launched a direct-to-consumer Amazon pilot program. Nike as a retailer.
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As reported by Retaildetail, Nike ended its Amazon DTC sales pilot program in 2019 and will focus on direct sales. The main reason for this is to prevent counterfeit sales on Amazon. We want to remember that participation in the DTC Amazon market brought Nike billions of dollars.
The company decided not to chase the money and focus on developing brand loyalty. This is a great way!
We mention this example only to show that direct selling on Marketplace is very profitable. Of course, we are not from giving advice to Nike. We just want to tell you that if you are not Nike or a super hyped brand, the idea of selling at stores – it is one of the best ideas, at least at the time when you the results will be more than US$ 2 billion.
Acer. This company is a good example of selling directly through a business like eBay. As of 2018, this market has decided not to focus on direct sales. However, now the situation has changed. Remember the story with the DTC strategy, which 10 years ago was not widespread and now has changed the B2C segment.
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Acer is one of the first to start selling directly on eBay. One