In last week’s news, you may have seen saw some bold statements from Inc. and others that Direct-to-Consumer isn’t the future of retail; “brick and mortar is”. And “the era of DTC brands is over”, Fast Company said. We’re throwing a yellow flag out on that one. But we’ll get to that in a minute.

First, let’s back up and define what is DTC.

What is Direct-to-Consumer?

Explosive growth of ecommerce over the last 5 to 10 years has confirmed the appetite of consumers to buy directly from the source of their choice rather than through intermediaries.

In response, retailers across the globe are augmenting their B2B and traditional distribution models with Direct-to-Consumer offerings to garner deeper customer engagement and sales growth. So what is DTC, anyway?

Direct-to-Consumer, often called DTC or D2C, is simply a retail model where brands sell directly to new customers. It skips the middlemen and can eliminate some of the costs incurred by selling through big retail brands and brick-and-mortar stores.

Innovative brands are leveraging Direct-to-Consumer to build direct relationships with their customers, better personalize their offerings, and connect via important consumer values like sustainable practices.

DTC is not dying. It’s just getting started.

Evidence shows rapid growth in the use of DTC in both Europe and North America. DTC ecommerce models have the potential to keep growing in the near- and future-term, as companies seek to differentiate and integrate more products (and complete categories in some cases) into their existing distribution models.

But launching a new DTC model also presents a range of technical and financial challenges. One of the most significant is that maintaining margins can be increasingly difficult if your order fulfillment solutions are not fundamentally ready for the change.

Growing pains to anticipate

As businesses introduce DTC into their highly efficient, honed-for-retail focused supply chains, the growing pains could hit them like a ton of bricks.

For example, a business that uses their ERP or legacy warehouse management system (WMS) will be very limited in the volume of orders they can accept because of extremely time-consuming manual workflows. That problem is compounded when the business needs to bring on more SKUs, locations, and channels.

In addition, new DTC capabilities will at some point require the addition of new functionality. Legacy suites will likely cause integration challenges because they were not built to onboard or support modern supply chain applications without a long and painful custom project. 

Modern order fulfillment solutions, on the other hand, were architected to scale from Day One, with pre-built software integrations to ERPs, marketplaces, carriers, 3PLs, EDI networks, and more.

So while Direct-to-Consumer is not new, the growing pains of the past year are. We now have inflation, reduced consumer spending, and the looming recession to worry about, on top of managing a return to brick-and-mortar shopping in 2021.

All of this underscores the critical need for DTC brands to manage order fulfillment on a different level… With ultimate transparency, precision, flexibility, scale, and control. No matter where or how products are being sold.

DTC order fulfillment solutions unlock fast value

High-growth brands like Dermalogica UK, a Unilever brand, have found modern DTC order fulfillment solutions to be crucial components in unlocking fast value and differentiation with Direct-to-Consumer. 

Solutions like Deposco’s order management and DOM system bring all of your inventory operations into a single platform, enabling your teams to inspect and sync inventory across all locations and channels.

With super simple, flexible dashboards and reports, these solutions automatically select the optimal fulfillment option for your teams. Order management and DOM enhances the customer experience by handling payments, returns, and order substitutions. They also make it easier to execute on customer options such as buy online/pick up in-store, or ship directly from the store.

Benefits of order management and DOM

Order management and DOM (distributed order management) technologies bring undeniable benefits to any Direct-to-Consumer strategy including:

  • Massive operational efficiencies in a very rapid timeframe
  • Amplified reach and connections with customers
  • Rich new offerings like personalization and sustainable delivery/sourcing practices
  • Superior control over the customer experience
  • Smooth technology upgrades and integrations with existing infrastructures that take very little time or cost to implement

Jason Brown, Director of Logistics, Unilever, Dermalogica, says: “Dermalogica went live on the Deposco platform in just 90 days. The ability to get innovation in place quickly to meet the evolving needs of our customers has allowed us to reduce risk, lean into growth, and see value faster.”

“This rapid time to value benefits us by enabling us to serve all of our customers, including our franchise businesses, the retailers we work with, and the individual consumers who buy from us directly, quickly and efficiently every time.”

Deposco’s order fulfillment solutions for DTC will enable Dermalogica to optimize their warehouse and order management processes to capitalize on the growing market demand for brands to sell DTC while also enabling the company to deliver across other, more traditional channels.

Is your order fulfilment process ready for the current and future state of Direct-to-Consumer? Reach out to us to see how Deposco can level-up your DTC ecommerce initiatives.