✓ Embracing D2C
Direct-to-Consumer (or D2C) refers to selling products and services directly to consumers bypassing any middle-men, such as wholesalers, retailers, and so on.
To understand the power of D2C, consider the following example.
In 2016, Unilever acquired online-only service Dollar Shave Club (for one billion dollars), which already disrupted the market with its subscription-based revenue model. The company sent razor blades directly to consumers by mail for a fixed monthly fee. Because of such unprecedented growth in the market, traditionally dominated by Gillette, the latter saw its market share drop from 71% to 59% in 2015. By acquiring the service, Unilever gained access to the market and valuable consumer data and insights into consumer behavior. In response to that acquisition, Gillette launched its own online subscription-based club; only that was a tad bit late. Unilever, in turn, having recognized the disrupting power of digital startups, launched the Unilever Foundry, a startup accelerator program and hackathon in London to find bright developers and future industry leaders to create products and ideas internally.
However, in the B2B context, consumers can refer to any end user, not necessarily a private (physical) entity but a company. Suppose a manufacturer of semiconductor plates has two to three middle-men between its business and its end consumer; the manufacturer can try and bypass any third parties and sell the plates directly to the end customer.
One strategy that businesses can embrace to reach their customers directly is employing IoT. For example, as soon as one of the parts in a product is about to break or expire, a customer gets notified about the need to replace a part. The customer receives also information on where to do so quickly and conveniently. In such a way, customers are unlikely to shop for a part replacement elsewhere and will directly order it from you. Major consulting firms, such as McKinsey, aver that by streamlining your main product operations, you open up new ways of selling additional products and services that either correlate with your main product or add additional value and benefits to it. So, by selling replacement parts or providing maintenance and repair services, you’ll gain both extra financial gains, nurture your customer relationships, and improve customer satisfaction.