In recent news, you may have seen some bold statements from Inc. and others that Direct-to-Consumer fulfilment isn’t the future of retail; “brick and mortar is”. And “the era of DTC brands is over”, Fast Company said. We take that with a pinch of salt, but we’ll get to that in a minute.
First, let’s back up and define what is Direct-to-Consumer fulfilment (aka DTC fulfilment or direct-to-consumer logistics) and why DTC ecommerce matters.
What is Direct-to-Consumer fulfilment?
Explosive growth of ecommerce over the last 5 to 10 years has confirmed the appetite for Direct-to-Consumer fulfilment, or enabling 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 fulfilment solutions to garner deeper customer engagement and sales growth. So what is Direct-to-Consumer fulfilment, anyway?
Direct-to-Consumer, often called DTC or D2C, is simply a direct-to-consumer logistics model where retail brands sell directly to new customers. A Direct-to-Consumer fulfilment company skips the middlemen and can eliminate some of the costs incurred by selling through big retail brands and brick-and-mortar stores.
Innovative Direct-to-Consumer companies are leveraging the model to build direct relationships with their customers, better personalise their offerings, and connect via important consumer values like sustainable logistics practices.
DTC is not dying. It’s just getting started.
Evidence shows rapid growth in the use of Direct-to-Consumer ecommerce management in both Europe and North America. DTC has 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 Direct-to-Consumer fulfilment 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 fulfilment solutions are not fundamentally ready for the change.
Growing pains to anticipate
As businesses introduce Direct-to-Consumer fulfilment into their highly efficient, retail-focused supply chains, the growing pains could hit them like a ton of bricks.
For example, a business that uses its ERP or legacy warehouse management software will be very limited in the volume of orders it 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 Direct-to-Consumer fulfilment solutions 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 fulfilment 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 fulfilment is not new, the growing pains of the past year are. We now have inflation rises and reduced consumer spending to worry about, on top of managing the pinball effect between ecommerce and brick-and-mortar shopping preferences.
All of this underscores the critical need for brands to manage Direct-to-Consumer logistics on a different level… With ultimate transparency, precision, flexibility, scale, and control. No matter where or how products are being sold.
A DTC fulfilment solution unlocks fast value
High-growth brands like Dermalogica UK, a Unilever brand, have found a modern DTC fulfilment solution to be crucial in unlocking fast value and differentiation in this new space.
Direct-to-Consumer fulfilment 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 fulfilment option for your teams. Order management systems enhance the customer experience by handling payments, returns, and order substitutions. They also make it easier to execute on customer options such as click-and-collect, or ship-from-store.
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Benefits of order management and DOM
Order management solutions bring undeniable benefits to any Direct-to-Consumer fulfilment strategy including:
- Massive operational efficiencies in a very rapid timeframe
- Amplified reach and connections with customers
- Rich new offerings like personalisation 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 Direct-to-Consumer fulfilment solutions will enable Dermalogica to optimise its warehouse and OMS management processes to capitalise 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 fulfilment initiatives.
