Selling directly to the consumer: What are the benefits of D2C?
Direct sales to end customers without detours via stationary trade or online platforms is the trend of the moment – and is also becoming increasingly interesting for the furniture industry.
May 25 2021
The sofa comes in a box – at the latest three days after the order is placed in the online shop. This "sofa-in-a-box", as the product of the German furniture company Vetsak is logically called, is sold directly to the end customer without any intermediate steps. Delivery within Germany takes one to three days, the company says. Vetsak boss Max Gansow saw a lack of innovation in the sofa market and wanted to do something about it. "Long shipping times, cumbersome delivery processes and difficult, complicated assemblies are often a nightmare."
Vetsak, known for its foam beanbags, is thus a current example of a trend that is increasingly spreading in the furniture industry: D2C, which stands for direct-to-consumer. This refers to the direct sale of products or services of a brand or manufacturer to customers. Stationary dealers or online platforms such as Amazon are bypassed in this way; the company thus sells without detours.
Examples of D2C
There is no lack of further examples that this D2C concept can work: the razor brand Harry's, for example, sends its sets with blades and razors directly to customers; there is also a razor subscription. What is saved in distribution enables cheaper prices compared to established brands of large corporations. The still growing number of influencers in the cosmetics sector also uses the unvarnished path to the buyer via their own channels on social media: Self-created products are sold directly via Facebook and Instagram to a predominantly young target group.
D2C is booming and this is mainly due to the possibilities that digitalisation offers today. Setting up one's own online shop, including connecting logistics and appealing payment options, is now neither technically nor financially a magic trick. Even small companies, start-ups or even individuals can quickly and accurately build a brand that appeals to potential buyers with a good business idea. At the same time, the willingness of these buyers to purchase products and services away from established sales structures is growing.
The advantage of the new D2C brands: they can react quickly to current trends and do not hesitate for long – they often proceed according to the trial-and-error principle. This is possible because plans can be implemented quickly on the internet and because there are no business relationships and distribution partners that have to be involved first. What is planned today can be offered tomorrow and be with the customer the day after tomorrow. One learns quickly from mistakes and reacts within a very short time.
D2C by Hydesk and Nike
Another D2C brand in the furniture segment wants to become Hydesk: The start-up develops sustainable small furniture for mobile working; the first product is a foldable and portable standing table that bears the company's name. When folded, the Hydesk fits into a handbag or backpack and can be set up quickly. A campaign is currently running on the crowdfunding platform Kickstarter to finance the first Hydesks, which should be available for purchase soon.
But it is not only such small, up-and-coming companies that want to take advantage of the trend; established corporations are also turning to D2C. One example is Nike: the sporting goods company wants to strategically dedicate itself to direct consumer relations and successively reduce its business with retail partners. The advantage for the Americans: if customers are reached directly, Amazon, Facebook and the like are no longer needed to the same extent.
In plain language, this means: if buyers land directly and without detours in Nike's online shop and buy shoes, shirts and other products there, the manufacturer saves margins. Direct contact also makes a new quality of communication with the target group possible: one can respond directly to their wishes and analyse their preferences. If the whole thing is done via retailers or social media, for example, the data is not only expensive, but in many cases also much less precise or meaningful. After all, the business with this data is the main source of income for Google and Facebook, but it is not always possible to reconstruct whether their representation corresponds to reality.
On the other hand, the effort required to strengthen direct communication and D2C concepts as a whole should not be underestimated: The know-how – especially in terms of personnel - must first be built up. And the right content is needed to get customers excited about products, services and brands. Nevertheless, D2C will become an even more important topic in the coming years, certainly also for furniture manufacturers and furniture brands.
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