The trend of CPG companies going direct-to-consumer (D2C) is on the rise. Compared to the traditional CPG model, CPG+D2C may provide several benefits:

The D2C approach begins with understanding consumer habits and prioritizing opportunities accordingly. Most CPG companies sell through multiple channels with differing practices across countries and geographical regions. Most commonly, the primary channels for CPG companies comprise retail, wholesale, distributors, government contracts, and e-commerce.

The opportunity for better demand planning at retail, wholesale, and distributor/franchise channels comes from the availability of data representing consumer sales as well as external data such as weather, sector benchmarks, and price monitoring applications. Innovative CPG companies use this data (commonly called point-of-sale or POS data) to plan their demand with a better view of the consumer preferences for their products, in addition to the historical data representing channel sales.

Another way of selling direct to consumers is maintaining points of sale, such as brick-and-mortar stores, pop-up stores, and seasonal stores. Not all points of sales are created equal, nor do all consumers have the same propensity to buy a product. Therefore, store-based product assortments contribute to higher profitability by optimizing the margin contribution of your inventory investment.

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