Direct to Consumer retail set for ‘double digit’ growth in 2020
The Direct Selling Association stated that it expects 2020 to be a year of ‘double digit’ growth for the channel. In a survey of its member CEOs, 80 per cent of respondents stated that DTC is ‘performing better than traditional retail channels’, with 90 per cent stating that they felt 2020 will be a year of ‘significant growth’ for DTC.
“Many brands selling via DTC have seen strong growth over the last two to three years, but their success has largely stayed under the radar. It’s only now, following the proven and well-publicised success of global DTC strategies by the likes of Nike Direct and The Body Shop, that many brands are waking up to the potential of DTC. As a result, we expect to see double digit growth in the channel this year” commented Susannah Schofield OBE, director general of the Direct Selling Association.
Schofield continues: “One of the factors driving the channel’s growth is the increasingly mainstream acceptance of the influencer economy. One of the most successful current DTC strategies we’re seeing is where brands have harnessed large, highly autonomous groups of nano-influencers, keen to earn more flexibly. Each curates their own customer base of perhaps 1,000 people, which, once multiplied by tens of thousands of people, gives brands extensive, low-cost market coverage, but with a highly localised and personalised approach for the customer.”
Research undertaken by Ipsos MORI outlined that under-34 year-olds now make up 23 per cent of those working in direct selling in the UK, and the DSA predicts the younger demographic will be a key growth trend over future years as new generations reject the traditional 9-to-5 in favour of portfolio careers and more entrepreneurial styles of working.
Christopher McDermott, managing director of The 1:1 Diet by Cambridge Weight Plan, a UK-based manufacturer of diet products which exports to more than 20 countries worldwide and sells exclusively via DTC, comments: “After a successful rebrand in 2019, our aim is double digit growth in our UK business during 2020. We have more independent business owners working with us now than at any point in the last 30 years. This is a demonstration of the power of DTC businesses like ours. In these uncertain economic and political times, we offer a safe harbour where people can enjoy the work / life flexibility they crave, coupled with the opportunity to unleash their entrepreneurial spirit. And, as an award-winning employee owned business, I think that people are attracted to our proposition because we offer ‘profit with purpose’, something more conventionally owned companies simply cannot”.
Ros Simmons, managing director of MONAT UK & Europe, a premium hair and skincare brand which also sells exclusively via the DTC channel, comments: “2019 saw growth of over 120 per cent compared to 2018 for us as a brand, which is a record for the business since its UK launch. We believe that the way people are buying is changing – our customers want to buy locally and from people they know and trust. Critical to our independent partners’ – and our – success is broader product marketing through social media and PR, as well as third party endorsement. We have high expectations for 2020 within our UK and EU markets and expect that both our financial and partner growth will continue to exceed the economic growth on the high street.”