54% of respondents say DTC sales have increased by more than 25% over the past 12 months, indicating that market growth remains dynamic and is likely to continue
LONDON, UK – 2 February 2024 – Eighty-four percent of commerce and supply chain leaders rank Direct-to-Consumer (DTC) fulfilment among their top three priorities with more than a third saying it has become their most important initiative.
This was a key finding in a new European DTC market report published by cloud-based, omnichannel fulfilment software provider, Deposco. Opinions of 200 senior decision-makers from leading commerce and supply chain organisations across Europe were included in the poll.
Bill Gibson, CEO of Deposco, commented: “These figures prove that European businesses are eager to invest in DTC fulfilment models and that their interest is increasing over time. We believe there are two main reasons why investment is ramping up.”
“First, organisations increasingly realise that DTC is a great way to give them closer connections with their customers and therefore a better handle on demand; why people are buying, what they are buying, and how they want to buy it. Second, consumers themselves are eager to take advantage of DTC and have enthusiastically embraced it in recent years.”
In line with this growing customer interest, we continue to see companies reporting a big increase in DTC sales and making investments in the fulfilment technologies that run them. In Deposco’s last European DTC research, published in 2023, 37% of respondents said that their DTC sales had increased by more than 25% over the past 12 months. In our most recent 2024 survey, 54% of respondents say the same.
Talent and technology to the fore
In delivering on this potential, businesses need to make use of the right combination of technology and talent to drive their organisations forward. Forty-four percent of the survey sample have implemented new fulfilment technologies to help manage DTC orders.
According to Gibson: “It’s imperative for DTC providers to have a robust fulfilment infrastructure to manage that growth efficiently and scale in line with it over time. But they also need solutions that are flexible enough to handle what continues to be a dynamic market, both in terms of what customers are doing and in terms of supply.”
Investment in WMS and OMS software
In line with this, 32% of businesses are investing in order management and fulfilment technology. Additionally, by growing the proportion of stock sourced from nearshore suppliers, businesses can further reduce the need to retain stock on hand, as 34% of respondents are already doing.
In general terms, with the current era of macro-economic disruption likely to continue, businesses understand that they need to rely on technology to achieve long-term success. 71% of businesses believe investing in warehouse management software or order management software platforms could drive profitability, and three-quarters believe it could drive higher sales.
DTC fulfilment software is essential
But the technology needs to be intuitive and easy to use, with 48% of respondents saying that in the past 12 months, the growth in DTC has led to a need to hire more technically skilled staff to fulfil orders.
According to Gibson: “a modern order management system is key in unravelling barriers to success in DTC ecommerce. High-growth brands have found such software crucial for operational efficiencies, smooth technology upgrades, and control over the customer experience. This aligns with the broader industry trend where DTC ecommerce fulfilment software is essential for managing higher volumes and specialised customer requirements more effectively than traditional B2B models.”
A copy of the full European report is available for download here.
You can also read the North American version of our DTC Market report.
Deposco’s Bright Suite of omnichannel fulfilment supply chain applications enables fast-growing companies to rapidly scale their warehouse management and order management operations. Bright Suite helps Deposco customers see what inventory they’ve got, where it is, and where to position it to fulfil demand when It’s Grow Time™. It’s the only solution that provides this much actionable insight into both your supply chain and the broader marketplace. Deposco makes supply chain fulfilment simple, fast, and always forward. Visit www.deposco.com.