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Direct to Consumer

Direct to Consumer (D2C) is a type of business model that bypasses traditional middlemen to create frictionless shopping experiences and unlock new revenue and profit streams.

Direct to Consumer

Publicis Sapient helps consumer packaged goods (CPG) companies identify and unlock the value from DTC business offerings. CPG companies have traditionally trailed other online retailers when it comes to establishing direct-to-consumer (DTC) models, leaving potential value on the table as consumer habits become increasingly more digital.

“We already know DTC creates value to consumers through multiple drivers such as convenience, frictionless experiences, unique personalized product offerings, etc., but the value DTC provides to the business is generally less understood,” said Sabrina McPherson, consumer products digital business transformation lead at Publicis Sapient.

“DTC offers companies several business-value drivers that extend well beyond the direct incremental revenue it generates while complimenting the traditional retail and marketplace channels. In order to truly maximize DTC opportunities, CPGs must focus on evaluating, assessing and measuring DTC initiatives based on direct value (new revenue streams), as well as the more holistic, indirect value (both monetary and non-monetary).”

Our holistic approach unlocking the value of DTC consists of four building blocks:

  1. D2C Value Pool Identification & Quantification: Identifying the highest value D2C opportunities across direct revenue and indirect value drivers (e.g. data benefits) and across different D2C business models (e.g. subscription vs. Brand.com). This provides clarity and alignment on the D2C value-at stake, where to invest in D2C and why.
  2. D2C Strategy & Case for Investment: Developing the holistic strategy and financial business case linked to highest value D2C opportunities. This provides executive buy-in to the strategy and commitment for investment in D2C linked to value pools.
  3. Platform Evaluation & Build: Identifying the most optimal D2C technology architecture, platform and partner for delivering the strategy and implement. This reduces technology costs and ensures higher value capture from D2C initiatives given scaled capability.
  4. Build the Capability: Standing-up a new D2C business /capability from start to finish including optimizing supply-chain for omnichannel. This delivers a new end-to-end direct & indirect value generating D2C business offering.
a symbol of direct to consumer

Our DTC teams focus on extracting value for both the direct value that comes from new revenue streams but also four key indirect value streams:

  • Data-Driven Consumer Insight: Collecting and leveraging data & analytics to deliver personalized experiences, reduce churn and develop new products or services that better meet consumer needs
  • Concept Incubation: Testing and developing new products and services with less risk and faster speed-to-market
  • Brand Building: Using stronger control over how consumers interact with their products, to influence conversion rates, loyalty, and increased organic brand advocacy through word-of-mouth customer reviews and recommendations
  • Business Agility: Increasing ability to innovate, expand and adapt to shifting trends in a way that relies less on outside retailers that may be exposed to different risks

 

“Our approach helps to capture the indirect value pool which can be 1.4 to 1.7 times the size of the direct revenue potential of the new D2C offering,” McPherson said.

CPGs must be prepared to evolve along with the changing market. DTC capabilities ultimately give companies greater freedom across online and offline channels.  

Accelerate With Direct to Consumer

17:21 A live, interactive discussion on how Consumer Product firms can unlock the value from mobilizing a Direct to Consumer model. This session will introduce the D2C strategy and tools that organizations need in order to help lower operating costs, drive results quickly, and get to a better future faster.

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Sabrina McPherson
Sabrina McPherson
Consumer Products Digital Business Transformation Lead