Are we living in the twilight of the success of Direct sales to the Consumer (DTC)? At the moment, everything indicates that we are on that path. What is clear is that these types of sales are declining rapidly and, in this sense, it seems that we are closer to a real change.
At DTC or direct-to-consumer brands It is no longer enough for them to pay for advertising on social networks to grow. For example, Apple’s recent decision to allow users to opt out of app tracking services has made customer acquisition more difficult and more expensive.
These sweeping changes come at the same time that efforts are being made to rebalance the economy with rising inflation and increased pressure from supply chains on retailers. The increase in prices represents the main concern for 87% of Spaniards, according to a recent study by Dynata. All of this is doing change consumer buying habitswho have already reduced the number of impulse purchases or are looking for alternatives to their usual purchases in response to these new pressures, which means that people are more open than ever to experiment with new brands.
This means that brands now have to work twice as hard to conquer and captivate their audience and get these stay faithful. In other words, the DTC model is ready to be replaced or at least reimagined.
In 2023, the DTC model will evolve into what we at Shopify call Connect to Consumer (C2C). If online stores and marketplaces like eBay and Amazon defined commerce in the 2000s, and DTC brands defined the 2010s, C2C will define the future. It is the multiplicity of paths to reach consumers, not just one path.
It is the place where brands that are smart about telling their unique story do so using multiple avenues – online, offline, social media and web3 – to earn the trust of communities.
The C2C places the authenticity, loyalty and trust at the center of every interaction between merchant and consumer. We are talking about real and existing options, not science fiction. Because the trade is not limited to the transaction; It’s about constant connection. Even the most successful DTC models cannot afford to be complacent if they want to retain their customers. As we adjust to the current economic turmoil, it’s critical to deepen your connection with customers, regardless of where they spend their time.
The near future demands that we build stronger relationships through all of these avenues. Retailers will become channel agnostic and ultimately move to a C2C model through all available possibilities to weather the coming storm over the coming months.
Gonzalo Torres, Country Manager Shopify Spain.