More Global Brands Shift To Direct-To-Consumer Model
Isolation during the global pandemic has forced consumer packaged goods (CPG) brands to move to an online direct-to-consumer (D2C) model, enabling them to develop individual relationships with consumers and attract new consumers.
Even before COVID-19, CPG manufacturers had begun reaching consumers directly to better control pricing, messaging, and distribution. Early adopters are now enjoying the benefits of the more cost-effective, web-based business model. Additionally, this model is more agile and resilient amid the uncertain environment and costs less for maintaining channels.
A study by Direct Brands for IAB Australia revealed that direct brands are not just selling online. They are also using online channels to develop new delivery methods and communicate strong brand purpose.
As a result, brands are benefiting from controlled pricing, promotion, product, and distribution, previously controlled by distributors and sellers. Brands also gain access to first-party data, insights, and testing approaches to marketing and innovation.
So far, global brands – Swiss chocolate pioneer Lindt & Sprüngli (Lindt), Heinz, have successfully moved to a DTC model toward a more robust e-commerce environment.
Lindt is now able to reach its customers during the second busiest time of year for chocolate sales, while the curbside pickup enabled better personalization to customers.
Meanwhile, Heinz is boosting its supply model amid the pandemic, even when the local supermarket is closed. After 150 years, the company sold online to consumers through the Heinz to Home initiative, offering the popular Heinz Beanz, Tomato Soup, and Spaghetti Hoops packaged as a bundle.