With an estimated 12,000 retail locations expected to close in 2019 and retail sales growth slowing, legacy manufacturers and CPG companies are accelerating their direct-to-consumer (DTC) efforts. While ecommerce represents less than 5% of overall CPG sales, the DTC movement accounts for 40% of the sales growth in the sector.
It means DTC punches well above its weight.
Notice how much faster ecommerce is growing for CPG companies in the following sectors:
Retail closures and decelerating sales growth are just two catalysts powering the DTC movement. Retail partners are now offering their own brands to compete, and there’s new competition from digitally native vertical brands (DNVBs). So selling direct is the single greatest opportunity legacy manufacturers have to reignite growth.
To help you capitalize, we’ve divided this report into three parts:
Benefits of DTC Ecommerce
12 Enterprise Examples of DTC
Ecommerce currently accounts for 11.1% of total U.S. retail sales. By 2021, it’s expected to grow to nearly 14% of overall sales:
It means that while ecommerce is growing rapidly, the majority of retail transactions still occur in brick-and-mortar stores. It’s essential that legacy brands and manufacturers evolve with this trend and execute an omnichannel commerce strategy — meaning legacy brands and CPG companies must integrate a DTC strategy while maintaining their existing retail partnerships.
It’s ecommerce growth that is helping legacy manufacturers offset stagnant in-store sales growth.
Importantly, selling direct is also crucial in response to increased competition from retail partners offering their own DTC private-label brands.
Read More: Direct-to-Consumer E-commerce