Logistics Tech for Last-Mile Efficiency in Direct to Consumer Selling
As in-store retail shrinks and consumers turn to online for essential and non-essential shopping, there is a new shift towards direct to consumer selling among retail and CPG brands.
What is Direct to Consumer Selling?
Direct to Consumer or D2C selling is a retail strategy wherein brands sell merchandise directly to consumers without involving distributors/wholesalers.
Manufacturer
Advertising / Website
Customer Doorstep
D2C Fulfillment Options
| In-House Fulfillment | Fulfillment by E-commerece marketplace | 3PL Provider |
|---|---|---|
| Managing in-house fulfillment without help of 3PL provider | Compaines selling their items through Amazon/any other marketplace. Amazon underakes fulfillment activities | Outsourcing the entire fulfillment process to the thirs-party logistics provider |
| Level of control: High |
Level of control: Low |
Level of control: Medium |
| Scalability: Low |
Scalability: High |
Scalability: High |
| Affordability: Low |
Affordability: Low |
Affordability: Medium |
| Best suited for starter D2C business or small E-commerece stores | Best suited for smaller or emergency brands | Best suited for large and growing e-commerce stores |
| Not suited for bigger and growing companies | Not suited for big brands as there are possibilities of cloning | Not suited for small and starter D2C business |
Direct to Consumer: The Rising Popularity
Brands are taking the D2C path now more than ever before
- From 2016 to 2019, Direct to Consumer E-commerce grew at three to six times the rate of overall E-commerce sales. (eMarketer)
- D2C sales are forecasted to account for $17.75 billion of total E-commerce sales in 2020, up 24.3% from the last year. (eMarketer)
- Globally, D2C startups have raised between $8 billion to $10 billion in known venture capital across more than 600 deals since the start of 2019. (TechCrunch)
- Today, more than 57% of consumer brand manufacturers are embracing D2C selling. (DigitalCommerce360)
- 52% of DTC brands experienced surges in demand since the start of the pandemic. (Forbes)
- By 2023, 75% of D2C brands are expected to offer subscription-based services. (MultiChannelMerchant)
Consumers, too, prefer buying directly from brands
- By 2022, the number of DTC E-commerce buyers will reach a milestone at 103.4 million. (eMarketer)
- A third of U.S. consumers plan to do at least 40% of their shopping from D2C companies in the next five years. (DiffusionPR)
- 81% of consumers say they’ll make at least one purchase from a D2C brand within the next five years. (DiffusionPR)
- More than one in four — 27% American consumers will purchase D2C products in the next five years because of greater convenience. (DiffusionPR)
- Two-thirds of consumers expect the ability to connect directly with brands. (DigitalCommerce360)
The Growing Role of Efficient Logistics in Direct-to-Consumer Fulfillment
Challenges in Direct-to-Consumer Selling
Helps with efficient Supply chain visibility
Identifying delivery addresses
Last-mile routing and task allocation
Top 10 Logistics Trends That Will Impact Companies in 2020 and beyond
The Scope of AI in your D2C Supply Chain
Effective warehousing and network design planning
Smart day-to-day route planning and rider allocation
Efficient fleet tracking and Improved supply chain visibility
Accurate geocoding and address verification
Reduced fuel consumption and operational costs
Real-time order tracking and customer transparency
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