So You Want to Go Direct-to-Consumer? Do This Research First
Direct-to-consumer is having a moment. DTC sales accounted for around 1 in 7 e-commerce dollars globally at the start of 2024 (Nielsen).
And sure, the allure of cutting out the middleman is undeniable. Higher margins, total creative control, a direct line to your customers—what’s not to love? But before you pop the champagne and launch your brand’s sleek new e-commerce site, let’s pause for a reality check.
Going direct-to-consumer (DTC) isn’t as simple as flipping a switch. The landscape is littered with brands that assumed customers would flock to their online store, only to be met with…crickets. The brands that succeed start with a deep understanding of their consumers—what they want, how they shop, and whether they actually care about buying directly from you.
So, before you pour millions into a DTC operation, let’s talk about the four critical questions you need to answer first.
1. Will Your Customers Even Miss the Middleman?
It’s a nice thought, isn’t it? That your customers are out there, longing for a direct relationship with your brand, just waiting for the day they can buy from you instead of some big-box retailer. But let’s get real: are they actually?
Before you go all-in, ask yourself:
Where do your customers currently shop? Are they devoted to third-party platforms (Amazon, Sephora, Target), or are they already hunting for your brand online?
What drives their purchase decisions? Price? Convenience? Brand loyalty?
Do they want a direct relationship with you, or do they just want the fastest, cheapest option?
How to Find Out
Surveys & Interviews: Ask your current customers how they prefer to shop.
Search Data & Social Listening: See if consumers are already searching for your brand online or talking about buying direct.
Retailer Feedback: Your retail partners know what sells and why—use that intel.
If the data suggests consumers are perfectly happy buying from their usual retailers, forcing a DTC shift could be an uphill battle.
2. Can You Compete on Price—or Offer Something They Can’t Resist?
Let’s talk money. One of the biggest hurdles to DTC is pricing. Consumers expect to pay less when buying direct—after all, you’re eliminating the retailer markup, right? But if you’re also covering shipping, fulfillment, and customer service, you might not have the wiggle room to undercut big retailers.
Worse? If your DTC price is lower, retailers might retaliate by dropping your products or slashing their own prices, sparking a race to the bottom.
What You Need to Know
How price-sensitive is your audience? Will they pay a premium for exclusivity, subscriptions, or personalization?
How will your pricing compare to retailers’? Can you justify a direct price that doesn’t erode trust with partners?
Can you offer something unique? Limited-edition drops, customization, VIP access—things that make direct feel like an experience, not just another transaction.
How to Find Out
Competitive Benchmarking: How do other DTC brands price their products compared to retail?
Conjoint Analysis: A fancy term for doing research to determine what consumers value most (price, convenience, exclusivity, etc.).
A/B Testing: Try different price points online and see what converts.
3. Do Customers Love Your Brand—or Just the Convenience of Retailers?
Harsh truth: just because someone buys your product doesn’t mean they’re loyal to you. They might be loyal to the retailer—Amazon’s free shipping, Target’s one-stop convenience, or their favorite beauty store’s loyalty points.
So before you assume customers will flock to your site, ask:
Would they go out of their way to buy directly from you?
What would make them switch from a retailer to your DTC store? Faster shipping? Exclusive access? A deeper brand experience?
Do they even care about a direct brand relationship, or do they just want convenience? What might they be “giving up” by purchasing directly from you? (e.g. shopping in their favorite physical store)
How to Find Out
Customer Interviews & Focus Groups: Get inside their heads.
Competitive Analysis: Study other brands in your space—are their DTC efforts thriving or flopping?
First-Party Data: If you already sell online, analyze repeat purchase rates and engagement with brand content.
If customers only buy your brand because it’s easy to grab at a retailer, you’ll need to rethink how to make DTC more appealing than “add to cart” on Amazon.
Is DTC Worth It?
DTC can be a massive win—deeper consumer relationships, higher margins, and full control over your brand. But it’s also a huge commitment that requires more than just a fancy website.
Before diving in, do your research. Make sure your customers want it, your pricing makes sense, your brand has enough pull, and demand is real—not just wishful thinking.
