Direct-to-consumer (DTC) refers to selling products directly to customers, bypassing any third-party retailers, wholesalers, or any other middlemen. DTC brands are usually sold online only and specialize in a specific product category: Casper, Warby Parker, Everlane, Harry’s, Outdoor Voices, AWAY, and Dollar Shave Club. Some direct-to-consumer brands have opened a limited number of physical retail spaces in adjunct to their main e-commerce platform in a clicks-and-mortar business model.
History of Direct-to-consumer
Direct-to-consumer became immensely popular during the dotcom boom of the late 1990s when it was mainly used to refer to online retailers who sold products and services to consumers through the Internet. But looking at physical exchange of goods/services, this model dates way back in time, when the modes of transportation we are using today were unknown and electricity was not yet discovered. People back then consumed mostly locally due to large geographical distances, which they could overcome either on foot or by horse, but both usually took them days. Therefore, they established relationships with closest goods and service providers and this is how Direct-to-consumer model first looked like. If we look, for instance, at the farmers as a business, it could be argued that they had a small but loyal pool of customers and operated on a small scale. The relationships were tight and healthy, because the switching costs for customers were pretty high, as said, due to geographical barriers and small number of competitors. Furthermore, there was much more space for personalization of business processes as farmers (among others, such as shoe repair master) knew exactly who their customers were and what they wanted. Read more...
