Why are millennials driving demand for direct-to-consumer brands?

Millennials are the demographic most likely to buy direct, favouring convenience, personalisation and authenticity over big, established retailers. Around 42% purchase D2C products regularly and 49% subscribe to D2C brands, which is why brands such as loungewear label MeUndies let customers choose their own prints and styles, and mattress brand Casper pairs a data led approach with a 100-night trial.

How does EDI help brands manage a direct-to-consumer supply chain?

EDI helps by automating and speeding up the supply chain processes that direct-to-consumer brands take on themselves once they cut out retailers, such as processing orders and shipments. It dramatically increases document accuracy and gives real-time visibility of stock and inventory, which is essential when a brand is managing fulfilment directly rather than relying on a retail partner.

← All articlesEDI

What is Direct-to-Consumer (D2C)?

EDI solutions can help brands successfully switch to direct-to-consumer by automating and speeding up critical supply chain processes.

Transalis6 January 2021

Key takeaways

Direct to consumer, or D2C, is a strategy where a brand sells directly to shoppers, cutting out retailers and other intermediaries.
Well known global brands and a growing number of digital start ups are building direct to consumer channels for the closer customer relationships and greater profits it brings.
A direct to consumer approach gives brands first hand insight into customer behaviour, helping them fine tune products and build communication that genuinely appeals to their audience.
Cloud based EDI can smooth the shift to D2C by automating supply chain processes, improving document accuracy and giving real time visibility of stock and inventory.
Beavertown Brewery shows what D2C can achieve, recovering from a sales slump to deliver a 1,000% increase in trade through its own direct route to market.

What is direct-to-consumer (D2C)?

Direct-to-consumer, or D2C, is a strategy in which a brand or manufacturer sells its products straight to shoppers, bypassing retailers and other intermediaries. It gives brands direct access to customer data and closer relationships, helping them fine-tune products and personalise communication. Cloud-based EDI can support the shift to D2C by automating supply chain processes, improving document accuracy and providing real-time visibility of stock and inventory.

It does this by cutting out retailers and other intermediaries.

The number of businesses that independently manufacture, promote, sell, and ship their own products is rising. This growing popularity is rapidly changing the business landscape.

Read our blog the 2020s promise to be the decade of direct to consumer to find out more.

Brands and manufacturers of all shapes and sizes are setting up direct-to-consumer sales channels. Well-established global brands such as LEGO, Dior, Heinz and PepsiCo are investing in D2C. And so too are thousands of smaller producers, all of whom can see the tangible benefits, greater profits and new found freedoms of cutting out the middleman.

There are also a rising number of digital start-ups, much-loved by millennials, such as mattress brand Casper, fashion retailer Bonobos and razor firm Harry’s, which are relying solely on the D2C model to disrupt the market.

What are the benefits of a direct-to-consumer strategy?

With the right planning and systems, launching a new direct-to-consumer sales channel can be a relatively quick and inexpensive thing to do, and has many benefits:

It makes brands far more customer-centric. A direct relationship with their customers provides brands with insights into consumer behaviour that they never had access to before.
It helps to develop and enhance products that are fine-tuned to their customers needs.
It enables brands to design customer communication programmes that personally appeal and engage directly with their audience.
It allows companies to tweak their brands so it appeals and resonates with their customers on a practical and emotional level.
All of this brings customers and brands closer together, increasing customer satisfaction, sales and profit margins.

How much could you save with Transalis eDI™?

EDI ROI Calculator

ROI Calculator

Use the ROI calculator to find out how much money you could save by using EDI to process your documents.

Select the number of Trading Network you trade with, followed by the number of Orders, Advanced Shipping Notes (ASNs) and other transaction documents you process monthly.

Based on the input we will show an indicative saving and recommend an EDI solution that fits your requirements.

How EDI can help smooth the transition to a Direct-to-Consumer model

Removing intermediaries such as retailers doesn’t come risk-free, but adopting the right digital tools, such as electronic data interchange (EDI), can ensure the switch to D2C is successful.

Cloud-based EDI solutions can help brands successfully switch to D2C by automating and speeding up critical supply chain processes, dramatically increasing document accuracy and providing real-time status of stock and inventory.

You may also be interested in How EDI can help with this shift in consumer behaviour

Direct-to-consumer success stories

Food and drink brand Beavertown Brewery shows what a direct-to-consumer channel can achieve, recovering from a steep sales slump to deliver a 1,000% increase in trade once it built its own D2C route to market. Subscription brands such as BarkBox and footwear brand Allbirds built entire businesses on the model, while shaving brand Dollar Shave Club scaled quickly enough to be acquired by Unilever for a reported $1 billion in 2016, and beauty brand Glossier reached a $390 million valuation within six years, all without relying on traditional retail intermediaries.

Millennial demand is driving the shift to D2C

Millennials, born between the early 1980s and 2000s, are the demographic most likely to buy direct, with 42% purchasing D2C products regularly and 49% subscribing to D2C brands such as razor firm Harry's and makeup brand Birchbox. They favour convenience, personalisation and authenticity over big, established retailers, which is why loungewear label MeUndies lets customers choose their own prints, styles and matching sets as part of a subscription, and mattress brand Casper backs up its data led approach with a 100-night trial and a programme to recycle or donate unwanted products.

Frequently asked questions

Which brands have succeeded with a direct-to-consumer model?: Several well known brands have built major businesses through direct-to-consumer, including subscription brand BarkBox and footwear brand Allbirds, while shaving brand Dollar Shave Club scaled quickly enough to be acquired by Unilever for a reported $1 billion in 2016, and beauty brand Glossier reached a $390 million valuation within six years, all largely without traditional retail intermediaries.
Why are millennials driving demand for direct-to-consumer brands?: Millennials are the demographic most likely to buy direct, favouring convenience, personalisation and authenticity over big, established retailers. Around 42% purchase D2C products regularly and 49% subscribe to D2C brands, which is why brands such as loungewear label MeUndies let customers choose their own prints and styles, and mattress brand Casper pairs a data led approach with a 100-night trial.
How does EDI help brands manage a direct-to-consumer supply chain?: EDI helps by automating and speeding up the supply chain processes that direct-to-consumer brands take on themselves once they cut out retailers, such as processing orders and shipments. It dramatically increases document accuracy and gives real-time visibility of stock and inventory, which is essential when a brand is managing fulfilment directly rather than relying on a retail partner.

Want this working in your business?

We will look at how you trade today, and show you what moving to Transalis involves, while your business keeps trading.