Skip navigation

A Closer Look at the Direct-to-Consumer Channel Evolution

Pedro Silva

Managing Principal, Retail Consulting, EPAM
Blog
  • Retail & Distribution

Now more than ever, the focus within the retail industry is on the empowered consumer. This is driving disruptive technology and innovation to create solutions that provide a seamless customer journey, personalization for individual consumers, as well as highly efficient logistics and supply chain management. With that in mind, manufacturers are becoming more involved in the direct-to-consumer space and are hesitant to let go of the opportunities that the market promises. So, what does this mean for the future of retailers?

Many manufacturers have, or are at least considering, launching a direct-to-consumer channel to reach this previously untapped demographic. As a result, their relationships with retailers must evolve as the old business models can no longer compete in a quickly changing retail environment. Manufacturers who navigate these changes with their top partners by adopting next-generation technology solutions will become leaders in the industry.

At the heart of this new era of retail is the ability to manage data to build a robust view of the customer and their shopping habits. Traditionally, manufacturers relied on retailers to deliver a personalized experience based on data-driven insights. Now, to truly understand the needs of today’s customers, they must gain direct access to data to drive product development and logistics, as well as maintain profitability and strong brand awareness. Manufacturers need to take advantage of all of the ways that consumers can interact with their brand through social networks, influencers, peer reviews and cross-border commerce.

One of the companies that has been highly successful at this is Nike, which launched their direct channel back in 1998. Their CEO Mike Parker stated that the goal is to treat each customer as a unique individual by growing all its digital touchpoints starting with their super fans. It will be interesting to see the outcome of Nike’s recent acquisition of Zodiac, a consumer data and analytics company.

Another notable example of this shift in the industry is New Era, one of the largest sports cap manufacturers, and how they started to expand their sales channels. Before transitioning to a direct-to-consumer model, their business model was B2B wholesale. As customer experience began to suffer due to lack of control of the brand through their partners, the company decided to launch their B2C eCommerce platform. The new eCommerce site went live in September 2017 after just five months, and offers a best-in-class customer journey, improved partner experience and allows the company to regain control over their brand experience. Now, New Era can take what they learned from their direct channel and improve all their channels holistically through analytics and insights.

As the direct-to-consumer model continues to gain momentum, retailers are becoming more and more concerned that manufacturers will further disrupt their industry. While traditional retailers have a right to be concerned, there’s something to be said about their experience and history that will may help them withstand disruption. Manufacturers may need to differentiate themselves through customer service models, subscription models or loyalty programs.

It’s inevitable that the retail industry will keep evolving right along with consumer needs. Instead of focusing on manufacturers as competition, retail partners should consider the “better together” outlook. Each side has their unique offering and, together, an even more robust customer experience can be built. Ultimately, focusing efforts on analytics and an appropriate sharing model will be the winning solution for all players that have a stake in the game.  Retailers that partner and share intelligent and actionable insights will become the frontrunners to building sought-after solutions for consumers. This may include premium loyalty programs that involve all touchpoints of the shopping journey as well as shared services for the customer from manufacturers and retailers.

Hello. How Can We Help You?


Our Offices

  • Canada

    • Ottawa

      343 Preston Street,
      ON K1S 1N4, Ottawa
      Canada

      Map
    • Toronto

      5 Park Home Avenue,
      Suite 400,
      ON M2N 6L4, North York,
      Toronto
      Canada

      Map
      F: +1-416-595-1551
  • Mexico

    • Guadalajara

      Periférico Sur #8110,
      Col. El Mante
      45609 Tlaquepaque, Jalisco
      Mexico

      Map
  • United States

    • Newtown, PA

      41 University Drive,
      Suite 202,
      Newtown, PA 18940
      USA

      Map
      F: +1-267-759-8989
    • Bellevue, WA

      110 110th Ave. NE,
      Suite 310
      Bellevue, WA 98004
      USA

      Map
    • Boston, MA

      21 Drydock Avenue,
      Suite 410 W,
      Boston, MA 02210
      USA

      Map
    • Conshohocken, PA

      101 East 8th Ave,
      Suite 201,
      Conshohocken, PA 19428
      USA

      Map
    • Los Angeles, CA

      11601 Wilshire Blvd,
      Suite 350,
      Los Angeles, CA 90025
      USA

      Map
    • New York, NY

      24 West 25th Street,
      5th Floor,
      New York, NY 10010
      USA

      Map
      F: +1-267-759-8989
    • Philadelphia, PA

      30 South 15th Street,
      9th Floor,
      Philadelphia, PA 19102
      USA

      Map
    • San Francisco, CA

      222 Kearny Street,
      Suite 308,
      San Francisco, CA 94108
      USA

      Map
    • Washington D.C.

      7901 Jones Branch Drive,
      Suite 400,
      McLean, VA 22102
      USA

      Map
  • Australia

  • China

    • Guangzhou

      Unit B01, 23/F,
      Yuexiuxinduhui Building,
      No. 236, 6th Zhongshan Road,
      Yuexiu District, Guangzhou,
      China 510180

      Map
    • 广州

      中国广州市越秀区
      中山六路236号
      越秀新都会大厦中座 23楼 B01室
      邮编510180

      地图
    • Shanghai

      Room B509, 5th Floor,
      48 Weihai Road,
      Huangpu District, Shanghai,
      China 200000

      Map
    • 上海

      上海市黄浦区
      威海路48号
      5楼B509室
      邮编200000

      地图
    • Shenzhen

      3/F, Block 5, Vision Shenzhen Business Park,
      9th Gaoxin South Road, 
      Shenzhen Hi-tech Industrial Park,
      Nanshan District, Shenzhen,
      Guangdong, China 518057

      Map
    • 深圳

      中国广东省深圳市
      南山区高新南九道
      威新软件园5号楼3楼
      邮编518057

      地图
    • Suzhou

      Building 12, Creative Industrial Park,
      328 Xinghu Street,
      Suzhou Industrial Park,
      Suzhou, China 215123

      Map
    • 苏州

      中国江苏省苏州市
      苏州工业园区星湖街328号
      创意产业园内12号楼
      邮编215123

      地图
  • Hong Kong

    • Hong Kong

      26F&17F, The Wellington Tower,
      198 Wellington Street,
      Central, HK

      Map
  • India

    • Bangalore

      Smartworks,  
      Global Technology Park,
      Block C, Outer Ring Rd,
      Adarsh Palm Retreat, Bellandur,
      Bengaluru, Karnataka 560103
      India

      Map
    • Hyderabad

      10, 11 & 12th Floors,
      Salarpuria Sattva Knowledge City,
      Plot No. 2, Phase - 1,
      Survey No. 83/1,
      Raidurgam Village,
      Serilingampally Mandal,
      Hyderabad, Telangana - 500081
      India

      Map
    • Pune

      SmartWork Business Center Pvt Ltd,
      Suite 8, Level 1,
      West Wing, Nyati Unitree,
      Samrat Ashok Road,
      Yerwada, Pune - 411006,
      Maharashtra
      India

      Map
  • Japan

    • Tokyo

      Floor 1-10-11
      Shibadaimon Centre Building 10th
      Shibadaimon Minato-ku
      Tokyo 105-0012
      Japan

      Map
      F: +81-03-6880-9201
  • Singapore

    • Singapore

      5 Shenton Way
      UIC Building, #10-01,
      Singapore (068808)

      Map
  • United Arab Emirates

    • Dubai

      EPAM Systems FZ-LLC Dubai Branch
      2307 Arenco Tower, Dubai Media City
      PO Box 501929 Dubai
      United Arab Emirates

      Map