Retailers are still very much present with us. Yet, lately, we’ve seen businesses radically change the conventional mode of reaching final consumers. Thanks to the ever-expanding benefits of the internet, new companies bypass retail and resell barriers. This way, they meet their customers with products directly.
In the business world, this style is called the direct-to-consumer business model. The first businesses to adopt this model rose so highly they became billion-dollar companies. However, what if I told you these businesses are losing the spark that once made them the cynosure of the mainstream business world.
However, Ryan Dean Hoggan believes new businesses are reinventing the direct-to-customer model. We spoke to Ryan Dean Hoggan on the current trends in the DTC space. He shares some insights into the model’s trajectory and what the future holds for bypassing retail agents.
Ryan, what contributed to the rise of the direct-to-consumer business model?
Principally, I believe it’s the internet and social media. The internet opened a lot of opportunities to reach people right in their homes. So, direct advertisement and sales became possible.
I should also mention that competitors were mostly absent. It was a developing model, so it took some time for rivals to catch up. With a large number of venture capital support, nothing could stop the blossoming DTC model companies.
The DTC business model is still around, but the industry leaders are losing out on value? Why?
It’s a general opinion that DTC businesses are become less viable compared to when they started. Gary Vaynerchuk believes that 90% of DTC brands are unknowingly out of business. The reasons are not far-fetched.
The success of companies like Warby Parker opened the doors to a lot of competitors. With this influx, the cost of social media ads skyrocketed. Business owners can no longer sustain the expenses required to draw the customer base to upscale their business value.
What does it take to reinvent the direct-to-consumer model?
In my opinion, reinventing DTC starts and ends with one word – omnichannel commerce. Direct-to-customer models are losing out on popularity and numbers. The omnichannel model is the perfect replacement.
In this new concept, businesses diversify on retailing processes. The biggest enterprises recognize that consumers will approach products through different channels. So, they create a strong online presence without missing out on the benefits of brick-and-mortar retail chains.
Are there prospects of success for businesses revamping the DTC model?
Most definitely. Albeit omnichannel won’t work all by itself. Businesses must support this model through vertical integration and preparing for what Les Schlesinger calls the “voice revolution.” In essence, new businesses may develop voice interfaces to market products since consumers are more driven by what they can both see and hear.
How can businesses prepare for disruptions to existing models?
Businesses must build a solid brand strategy with business models while they exist. Along with that, they should ensure ongoing consumer feedback. Feedback affords them the flexibility to undertake a change in the business model if necessary.
We recommend the following articles if you’re looking for more Ryan Dean Hoggan Interviews: