Introduction
Food and Beverage (F&B) brands are constantly looking to engage the consumer and extract growth from a digital landscape that moves as fast as their customers do. The direct-to-consumer (DTC) model/ strategy has taken the lead at present. As per the reports by Statista, by 2025, D2C brand sales are expected to grow by $186 billion in the US alone.
Source : Statista
So, what makes the DTC model appealing to F&B brands for making a shift? To clear your doubts, this article will explain to you the benefits of adopting a DTC model for your Food and Beverage brand.
Top 5 Benefits of a Direct To Consumer(DTC) Model for Food and Beverage Brands
1. Richer Customer Data:
The first and foremost benefit of the DTC model for an F&B brand is that it opens up the opportunity to capture data from customers. Direct selling is a very powerful process because it allows you to gather an enormous amount of specific, hard-to-acquire data that is not available if you are selling through other forms of channels. The information is more detailed than just basic demographics and dives into purchasing behaviors of various types, preferences on different brands, and even reviews of the products.
Starbucks can be used as an example of this situation because the company has actively adapted to the existence of the virtual community. Thus, using the Starbucks mobile application and the loyalty program, they collect a vast amount of information about the clients, their purchases, and even their seasonal preferences. This information is important in helping the Starbucks company offer segment-specific promotions, advertise certain beverages, and even introduce products within the market that meet the customers’ needs.
Source: Starbucks
2. Personalized Customer Experience:
Personalization is no longer a necessity; it is a must-have now. By utilizing AI and predictive analytics, the DTC model empowers food and beverage brands to deliver tailored experiences at scale. You can create and shape experiences that allow customers to feel valued, as they are being treated equally in the eyes of a business.
Through its snack and beverage brands, PepsiCo uses personalization in its marketing strategies. For instance, with its DTC website for snacking, Snacks, PepsiCo presents consumers with relevant products based on their previous buying and surfing activities. This is not only a bonus to the customer and provides satisfaction but also helps increase sales as more customers are guaranteed to enjoy the products they choose.
3. More Product Control:
DTC food and beverage brands maintain full control of their products. One of the benefits of directly reaching out to your customers is the ability to manage how consumers engage with your brand and product, as well as narrate and communicate, without the interference of middlemen.
Heinz, a US brand, established its D2C brand Heinz to Home. Heinz has an added advantage because, by selling directly to the consumers, there will be a strong bond that will enable the firm to inform the customer of its story, brand values, and other information on the product. This direct communication line helps Heinz to ensure that its brand image is well maintained with clients and that the needs of clients are addressed most of the time, hence winning their loyalty.
4. Inventory and Supply Chain Made Easy:
Inventory management is hard, but managing a supply chain can be even harder for any business, especially DTC, where the optimal model to reach customers directly requires quick turnaround times with minimal delays. This way, you can better manage inventories by cutting out the retailer in between and reaching the customers directly.
Tim Hortons employs the DTC model to enhance the supply chain of its coffee products, which have been in high demand. One of the benefits of selling through an online store is the real-time management of sales and inventory, as seen with Tim Hortons. This saves time and limits wastage, as it is easier to control the amount of stock in-store and effectively deliver orders to customers.
Source: Tim Hortons
5. Increased Customer Loyalty and Retention:
The cornerstone of DTC is the focus on developing relationships with your customers. This includes direct-to-brand relationships built on personalized experiences, targeted offers, and service levels that keep the customers coming back.
A perfect example is Blue Apron, a meal kit delivery service provider. Customers can opt to receive meals of their choice, and Blue Apron utilizes data gathered from customers’ past purchases to make recommendations. This data is utilized to predict future needs so that customers will only be recommended products that are similar to their palate and dietary requirements. This level of personalization makes customers remain loyal, which is an essential way to increase Blue Apron’s sales in the long run.
Is Considering the DTC Model Good For Your Food & Beverage Brand?
The DTC strategy is particularly beneficial for F&B brands. One must realize that in today’s world, where consumers are very selective, especially when it comes to food, the DTC strategy/model is the perfect setup to deliver the kind of experience that is expected of them.
Thus, due to the opportunities for direct-to-consumer sales, F&B brands can achieve better customer relations, fast innovation, and further development in the significantly competitive industry. Thus, if you are an F&B brand still thinking twice about the DTC approach, maybe it is time to consider the shift.
Krish , a leading digital experience company dedicated to helping you build your F&B brand. Contact us for a free consultation with our consulting experts, and let us guide you through delivering a unique experience,
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Nishit specializes in assisting brands and businesses unlock maximum growth through digital transformation and optimizing operations. With a passion for strategic discussions, he excels at improvising strategies to generate revenue and expand customer bases. Beyond his professional endeavors, Nishit enjoys traveling and connecting with new people, sharing experiences, and engaging in conversations about technology.
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