In November 2019, Nike announced it would stop selling its products on Amazon, the largest e-commerce platform in the world, as a first-party vendor. Since then, Nike has radically altered its business in recent years by focusing on a Direct-to-Consumer (DTC) approach that the company largely credits for its 19% increase in annual revenue last year to $44.5 billion. Also, it helps NIKE in increasing consumers’ brand awareness and loyalty. Let’s learn more about DTC/D2C with FreightAmigo and make trade easier!

What is Direct-to-Consumer (DTC/D2C)?

DTC/D2C stands for Direct-to-Consumer.  It refers to an individual with a product on the market sells their product directly to their end customers while bypassing all middlemen, including retailers and wholesalers, distributors, and e-commerce platforms. In Taiwan, a lot of brands build their own official websites, APPs, or physical store to sell products to customers directly in addition to displaying their products on e-commerce platforms like Shopee and momo. This promotes brand loyalty among consumers and helps businesses develop strong customer relationships.

Why is DTC/D2C Getting More and More Popular?

Gain Higher Margins

Most online shop owners use the Business-to-Consumer (B2C) e-commerce platform as a sales channel now that it has become a widespread market trend. However, it has been shown that despite these platforms receiving a lot of traffic, the commissions they take in are rising. Platforms for e-commerce like Amazon and eBay have commission rates that are more than 10%. DTC/D2C helps online shop owners achieve higher margins by eliminating the middlemen from the picture.

Improved personalization and Increased Customer Loyalty

No matter how well e-commerce performs, it will never give online shop owners access to crucial information about consumer purchasing patterns, behaviour, and preferences. As DTC/D2C commerce gives brands a greater breadth and depth of consumer data compared to traditional retail models, marketers can respond to the audience’s demands more effectively. DTC/D2C business model helps businesses in gathering consumer information from a variety of sources, such as age, gender, and preferences, to better understand their needs. This makes it faster and easier for marketers to act on user feedback and provide the personalized experiences customers are looking for.