Branded Manufacturers Predict that their DTC Online Channel will be the Highest Generator of Sales Revenue within Two Years
In a highly competitive economy and an era when digital communication channels have changed consumer expectations, branded manufacturers are focusing on new ways to build relationships and drive sales. Many have implemented online direct-to-consumer (DTC) sales channels to foster closer ties with their customers and open new revenue streams, and their efforts are generating significant growth.
In fact, DTC sales channels are expected to produce more sales than any other channel within the next two years. Despite this, many companies remain wary of launching a DTC sales channel.
Earlier this year, Digital River commissioned primary research from Forrester Consulting to explore these issues. The findings, just published in a free white paper available here, are a must-read for any company leader who is involved in channel development decisions.
Forrester surveyed 109 U.S. sales channel leaders at brand manufacturing organizations to get their insights on DTC sales channels. Here is an overview of the top three findings:
- DTC allows companies to achieve engagement in a balanced way. Today’s customers expect to interact with companies on their own terms, and online DTC channels facilitate customer-initiated contact. Just over three quarters of surveyed channel decision-makers reported that their DTC channel performed at or above target levels.
- Online DTC channels deliver better customer relationships. Of the reasons cited for development of an online DTC channel, 72% of surveyed executives expressed a desire to build closer customer relationships. A huge majority – 82% – said their channel has improved customer relationships, and by creating a DTC channel, brand manufacturers are meeting customer demand.
- A DTC strategy can improve the performance of other channels. The study found that an online DTC channel can actually enhance performance in other channels if handled correctly. 54% of survey participants said they route DTC orders through channel partners, and 49% said channel partners benefit from DTC via improved brand awareness. Only 9% reported channel conflicts.
These findings have significant implications for channel managers who are considering a move into the DTC space. The white paper outlines a number of additional benefits to brand manufacturers and discusses best practices that can mitigate the risk of channel conflict. The full report on the Forrester Consulting research can be downloaded for free here: http://driv.ws/1z.