In our GCVB podcast series, we recently interviewed Gerrit Povel, Head of Division Direct to Consumers at Samsung Germany on the prospects for and obstacles of D2C marketing, viewed from the perspective of an established brand. Based on his input and our own take on the subject, our advice is to utilize the power of direct communications. But, like with all marketing methods, it really depends on your individual business model.

What is D2C marketing?

In contrast to traditional sales, where you would place your products in retailers’ (online) stores, in the Direct-to-consumer business (D2C), you build your own sales channels and market and sell directly.

In recent years, D2C has become a solid income model for many companies. Spurred by the COVID pandemic that made physical interaction with customers difficult, if not impossible, D2C sales increased considerably in the past 1.5 years and are now regarded as one of the best business models by many. But why is D2C so intriguing to many companies and why is it a total misfit to others?

D2C has many advantages, as we explain in the following. But it also has some pitfalls that you need to avoid to be successful.

The benefits of an owned-channel business model

The core of your D2C structure is your website, plus your social channels that will feed into it. And the beauty of a website is that you can do whatever you need to do to convert visitors. Your site can look and “sound” nice & cozy, exciting, or minimal, whatever underlines your brand and products best. It is here, you convince consumers and convert them.

And your website has a second major advantage: Gathering sufficient first-party data is key to building successful D2C channels. On your website, you can shape a positive experience that will allow them to give you far more details about themselves than they would usually do. And considering GDPR restrictions, gaining insight into in-depth consumer background is key to your success.

Just picture someone who would like to order dog food that is produced according to the needs/preferences of their own dog. Offered the opportunity to order products that exactly match their needs, they will hand out this information. Likewise, a startup that offers individualized cosmetics that could potentially meet the exact requirements the customer is asking for and hasn’t found yet will receive personal consumer data that could never be obtained via traditional marketing. And here comes one of the best features of D2C: in a D2C online environment, consumers do not have to “let their pants down” in a personal conversation with a salesperson. They can hand out information without having to face psychological hurdles. This makes it easier for producers to interact and, above all, interact directly with the customer.

The success stories of international D2C startups unveil the essential thinking behind D2C marketing. Beauty and skincare startup Glossier actually started as a website where the community could post their favorite products. As the company states on its site: “We got our start with Into The Gloss, a beauty website devoted to people sharing the products they love, and our source for inspiration and information.” The knowledge they gained encouraged them to start building their own company that will soon sell its own products to former users. This is not uncommon in the fashion business either. TopVintage, one of Europe’s leading online boutiques for retro fashion, was also able to create its own fashion brands with the insights its customers provided. And in both cases, it’s a win-win: customers benefit, as the producers create what they really want, which in turn creates the market for producers. And in the case of Sono Motors, a fully consumer-preference-centric approach enabled a team of entrepreneurs to build an aspiring solar-panel-powered electric vehicle newcomer automotive brand. In our context the company slogan is misleading. It’s not driven by the sun, but rather by consumer interest.

D2C focused website-building. Difficult but necessary.

Before you can successfully sell your products online, you first need to go through a painful and in many cases also long process of building a website that captivates its visitors and turns them into customers. A website that positions your brand in a manner that will make visitors gain trust in your knowledge and the sincere mission to help them find a solution of their problems.

You will find that it takes time to get the tone of voice and the onsite experience right. This will certainly include a favorable brand experience coupled with a convincing product presentation. You may have to experiment and test visitor behavior before you achieve a healthy conversion rate, which you then have to build further through a continuous cycle of site performance improvements.

Also, the improvement of your search engine ranking is an ongoing and never-ending task that requires a lot of attention and patience. But without a good SEO strategy and continuous effort, you will not rank among the first-page entries on the search engine results pages (SERP). If you want to go international, you will also need to build native-language subsites or sites for specific countries. This task is extremely challenging, but it is very important, since consumers in other countries may not fully understand your native tongue (English) and will find it easier to connect with your brand if you, literally, speak their language. A translation can only be your initial MVP, since every language has its own sound, words, and idioms.

Social media: content and ads

Aggressive social media marketing, not in tone but in intensity, is what creates the awareness your products need in the DACH region. With the exception of positive coincidental encounters with brand/products, most consumers do research when they want something. During the discovery phase, your social media activities (and your SEO) will bring them to your website, where you can convert them. The channels you can use to reach your customers largely depend on the preferences of your intended buyer groups.

Many startups do not have a big advertising budget and rely on content marketing instead. Content is essential to explain your products to consumers and build trust in your brand. Without good content that places your products and brand in the context of what consumers care about, they can’t connect with you. Invest time to create a content plan for your brand and products. Part of your marketing budget should include involving a content marketing or online marketing agency in the early phase, as agencies can help you strategize your content before you start posting.

But while content marketing will help you create favorability for your brand and products, in most cases it will not create substantial awareness. You need the full scope of online marketing, in particular online advertising. You may not want to start with SEA or native ads, but social media ads are necessary to get the reach you require to start selling products. And you can scale them to match your budget. But to have an impact, social advertising will involve some investment.

Post-purchase marketing

In the online business, where there are only few walk-in customers, customer satisfaction is key to generating sustainable sales levels. Every satisfied customer will come back and buy more. They will also tell their friends and will become your unintentional brand ambassadors. Hence, going the extra mile to offer an overwhelming post-purchase customer experience is crucial for your success.

But in D2C, this is not as easy as it may seem at first glance. Without intermediaries, you are solely responsible for customer satisfaction. From product quality to shipping and unpacking experiences, you need to deliver excellent service. You are also responsible for the return of goods process. In the EU, customers can return their unused items and get a refund. And setting up such processes costs money. And there is more …

D2C models start with fee analysis

Startups that have their business cases built around D2C often state that the decision for D2C not only depends on their own preferences. Sure, they can sell directly to consumers, and they can build a big community and have control over brand building.

However, you still need to build a solid online presence to do this and to generate sales. And here it can get messy. Because the money you save by directly selling to consumers is not 100 percent saved, simply because you need to pay fees for your online campaigns that create awareness and direct consumers to your website. And the question is whether the fees for digital marketing are really significantly lower than the fees you would pay for using wholesale networks.

Since only a few startups get their positioning, messaging, and channel strategy right in the beginning, they need to experiment, which can become a cost driver, depending on the length of the exploration phase.

D2C through brand centers and physical stores

For that reason, some startups choose to start building physical touchpoints prior to going online. And they may even expand their physical presence when they find that it creates a solid income stream. After all, a hybrid sales model may be the best model for D2C sales in the years to come, simply because it offers more touchpoints to customers. And the positive physical product and brand experience is definitely a sales factor.

In some segments, consumers really value the physical presence of the brand and some startups have found that they sell more online in the cities where they also have brand centers. But this will largely depend on what you sell and what size your centers need to have. Thus, some startups will have small stores in major cities while their strategy for small cities or rural environments is online only.

Even large companies that are moving to D2C models maintain brand centers, at least in core metropolitan areas. This will typically be the case with companies that sell high-priced goods. Brands like Apple and Tesla are very digital. But they still entertain brand centers that will help consumers get a real touch and feel experience, which is great when you offer innovative quality products.

Companies that have a strictly digital journey need to move around this online purchasing barrier. The most promising approach is creating immersive experiences. While not offering the touch and feel experience, immersive experiences offer a deeper level of (imaginative) product integration in everyday life situations.


D2C is an intriguing business model. It offers many benefits, such as being in control of activities that shape the perception of your brand and products, while saving money by avoiding including third party sellers. But there are also many obstacles that companies, in particular startups, face when going fully digital. Among those are a painful and lengthy process of adjusting their website-centric sales model to market preferences and the necessity to invest in online marketing. In some cases, online spending may outweigh physical retail savings. As with every business model, any company that embarks on the digital journey should first engage in a thorough analysis of its online opportunities.

If you’d like to find out more about D2C opportunities in Germany and the other DACH region markets, you will find inspiring insights on marketing channels in the region. You can do your regular Google search. If you have more immediate interests, do contact us.

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