What does D2C mean for consumer goods companies?
Typically, CPG merchandise is sold by retailers in brick-and-mortar stores and packaging is designed to differentiate a product from its competitors on a pharmacy, grocery, or big box store shelf. Because shelf space is a finite commodity, the CPG market is highly competitive. Until recently, it’s been difficult for manufacturers to take advantage of the internet and sell CPG through e-commerce channels.
However, significant advances in mobile technology, automated supply chain management, machine learning, and data analytics have balanced the scales and the promise of using the internet to sell consumer packaged goods through e-commerce channels is finally becoming a reality. This enables them to go direct to consumers and sell their products at competitive price and also make better margins.