Direct-to-Consumer: Time to leave marketplaces?


August 8, 2021 | By RetailME Bureau

The direct-to-consumer (D2C) market has grown rapidly in the last couple of years, despite digital marketplaces like noon.com and Amazon helping brands reach its consumers online.

D2C sales were forecasted to account for $17.75 billion of total e-commerce sales in 2020, up 24.3% from the previous year. This has also brought about the rise of D2C enablers like CNNB, which has seen a 500% growth in the past 12 months, facilitated by the impact of Covid-19, and also by acquiring multiple brands like L’Oreal and Kerastase that have pioneered in adopting the D2C approach in order to establish direct channels of communication with its customers.

“We realised immediately that there were opportunities in the market for brands to develop ‘Direct-to-Consumer’ businesses. Direct-to-consumer is actually developing – what we call – a brand.com, like a nike.com or adidas.com,” said Nicolas Bruylants, Co-founder and CEO at CNNBSolutions.com.

“Using marketplaces like noon or Amazon to retail products is a great tool as brands can reach a very large population. However, there are a lot of shortcomings too. The first thing is owning your customer relationship. Amazon and noon own your clients, and you (the brand) don’t own your client. It is very difficult to communicate brand values and understand customer behaviour when brands can’t own the client relationship,” he said.

According to a study by InstaPage, 74% of customers feel frustrated when website content is not personalised. Surveys by Accenture suggest that 91% of consumers are more likely to shop with brands that provide offers and relevant recommendations to customers. As customers demand more personalisation, retailers have started noticing that marketplaces, while optimal to reach large audiences, fall short in addressing personalisation and customisation.

On the other hand, with D2C, brands and retailers can access and control consumer data, which helps in the process of personalisation and understanding consumer needs. This allows brands to rid themselves of a ‘middleman’ or third-party distributor, which saves cost and helps increase margins.

“Developing a brand.com enables you to own customer relationship, data, increases your margin because it cuts out the middleman, and enables you to expand into markets where you’re not necessarily present”, he concluded.

Comments

comments

Previous Article Next Article

SHARE

YOU MAY ALSO LIKE /


A new branch of Waitrose comes up in Abu Dhabi’s Khalifa City

British grocer Waitrose has opened its newest store in Abu Dhabi’s Khalifa 

Continue Reading

January 25, 2023 | By RetailME Bureau
Its Netherlands Food Week at Al Maya Supermarkets

UAE-based Al Maya Supermarkets has kicked off its ‘Netherlands Food Week’ that 

Continue Reading

January 20, 2023 | By RetailME Bureau
Tesco announces price lock to support consumers amid inflation (PC: Andrew Parsons / Parsons Media)

British grocery retail chain Tesco has announced a price lock on over 

Continue Reading

January 13, 2023 | By RetailME Bureau
Union Coop renews ISO certification

Dubai-based grocery retailer Union Coop has successfully obtained the ISO 22301, an 

Continue Reading

January 12, 2023 | By RetailME Bureau
Spanish supermarket chain Mercadona announces salary increase amid inflation (PC: Mercadona)

Spanish omnichannel supermarket chain Mercadona has announced salary increase amid inflation that 

Continue Reading

January 3, 2023 | By RetailME Bureau
Choithrams partners with Rove Hotels to open 8 new outlets

Grocery retail chain Choithrams will open eight convenience stores across Rove Hotels’ 

Continue Reading

December 30, 2022 | By RetailME Bureau
Géant to open more than 20 stores in the UAE in 2023

Part of regional retail conglomerate GMG, Géant plans to open more than 

Continue Reading

December 23, 2022 | By RetailME Bureau
FMCG online sales growing by 68% in UAE and 58% in KSA

Online share in FMCG sales has been growing all over the world, 

Continue Reading

December 19, 2022 | By RetailME Bureau
Majid Al Futtaim Retail, Standard Chartered launch region’s first Sustainable Supply Chain Finance Programme

Majid Al Futtaim Retail, operator of the Carrefour franchise in the Middle 

Continue Reading

December 15, 2022 | By RetailME Bureau
GMG and Silal partner to support 1,100 UAE farms access local retail market

UAE-based diversified conglomerate GMG and Silal have signed a memorandum of understanding 

Continue Reading

December 12, 2022 | By RetailME Bureau
Lulu Group partners with Amazon expanding grocery offerings to online customers in the UAE

Abu Dhabi based grocery retail chain Lulu Group has partnered with Amazon 

Continue Reading

November 24, 2022 | By RetailME Bureau
Food Tech Valley partners with Tradeling to boost UAE’s food ecosystem

UAE-government-led initiative Food Tech Valley – announced in 2021 by His Highness 

Continue Reading

November 17, 2022 | By RetailME Bureau




f
Download Images RetailME Magazine