Is ‘Going Direct’ the key to growing your manufacturing business?

Posted on 5 Dec 2019 by The Manufacturer

Direct to Consumer (DTC) sales is a growing phenomenon, disrupting traditional goods-to-market approaches by allowing manufacturers to sell direct, usually through their own online sales channels, instead of via wholesalers, retailers and other third parties.

Increased turnover, unlocking new revenue streams, accelerated speed to market, greater end-to-end supply chain control, building a broader customer base, deeper product-use data – these are just some of the opportunities why more and more manufacturing businesses are adopting a direct to consumer sales approach.

Is ‘Going Direct’ the key to growing your manufacturing business? - STOCK image

New research from Barclays Corporate Banking shows that the UK manufacturing sector could add £13.3bn of revenue in 2025 through great investment and more effective business strategies to support direct to consumer (DTC) sales.

That’s a 15% growth over the coming five years – and Barclays has found that using the DTC approach could also create 31,400 new jobs.

As the trading environment has become more challenging and open to disruption, many businesses are investigating methods of unlocking new sales and distribution channels.

Selling direct to consumer bypasses the traditional method of manufacturers, selling via wholesalers, retailers and/or other third parties, and forges stronger relationships between makers and their end-users.

Though the technique is more mature in North American markets, British businesses are increasingly adopting the strategy as the line between production and retail distribution continues to blur.

DTC sales have increased significantly in recent years, and the approach is forecast to become far more prevalent.

Connected Factory ERP IIoT IoT Ecommerce - image courtesy of DepositphotosAlmost half (48%) of manufacturers are already building channels to support the strategy, and the vast majority (87%) see DTC as relevant to their products and consumers, according to research by Cranfield University.

Many companies have embraced selling directly to consumers, usually through their own online sales channels, including breweries, clothing brands, and personal grooming businesses, to name but a few.

With the UK leading the world in terms of the number of online sales as a proportion of overall sales, the familiarity of our consumers with digital channels could create a ripe market for manufacturers embarking on a DTC strategy.

A new report from Barclays Corporate Banking – Going Direct – explores the opportunities and challenges of pursuing a DTC sales approach, and recommends five strategies for success.

I’d love to hear your thoughts, so please connect with me on LinkedIn.

Lee Collinson is National Head of Manufacturing, Transport & Logistics at Barclays

*Images courtesy of Depositphotos