- Recent trends have caused rapid growth in the direct to consumer model
- 60% of consumers increased use of direct to consumer channels during pandemic
- Companies shipping temperature-sensitive goods direct to consumer are now responsible for ensuring products arrive safely.
- For these brands, the importance of using high-performance, cost-effecive, recyclable insulated packaging has never been greater
The digital transformation of retail has been on the cards for years now and the global pandemic has accelerated this trend, but it’s not just e-commerce marketplaces like Amazon that have benefited.
Stay-at-home orders from governments around the world and shocks to supply lines as businesses closed their doors forced consumers to change their spending habits and companies to adjust their business model.
Consumers purchasing more products online and trying out new brands instead of purchasing from traditional brick-and-mortar stores or going out to restaurants has also been a boon for the direct-to-consumer (D2C) retail model.
Companies that sell temperature-sensitive goods like perishable foods and pharmaceuticals have done extremely well under the D2C model. Online grocery orders have skyrocketed. Reports indicate more than 60 percent of consumers increased their use of D2C channels to buy food and beverages during the pandemic.
Meanwhile, social distancing guidelines have helped spur huge growth in D2C pharmacies shipping temperature-sensitive medications to patients. Amazon’s move into the online pharmacy space at the end of last year is one indication of this, as is the quadrupling of public interest in D2C healthcare in the past five years.
Reasons why consumers purchase food from direct-to-consumer channels
As its name suggests, D2C means companies sell their products to consumers without the involvement of other third-party retailers, wholesalers, distributors or other intermediaries.
D2C approaches differ depending on the brand, target market and product on offer, but in general D2C companies only or primarily have a digital presence and specialize in a specific product or category of product that they sell on their website and ship directly to the consumer. Under D2C, the homepage has replaced the storefront.
Direct-to-consumer food purchase preference by generational group
While many emerging companies that manufacture their own products had already eagerly embraced the D2C model before the pandemic, corporate giants like Nike, PepsiCo and Levi’s have now also adopted D2C as a core part of their business in response to changing consumer habits, retail closures and supply line disruptions.
The benefits of doing so go beyond this though. D2C allows companies greater control over the branding, marketing and sales tactics of its products. Crucially, it also provides these companies with firsthand insights into its customers through the data left behind on its site, as well as the potential to increase engagement through subscriptions, reviews and social media channels.
This means D2C companies are better able to influence consumer decision-making by striking up substantive conversations and tailoring the shopping experience to each customers’ preferences and needs, as well as their values.
D2C also presents difficulties for companies using this model though, especially those selling temperature-sensitive goods.
A company that wants to sell frozen meat or medicines directly to consumers is wholly responsible for ensuring it reaches them at the right temperature so it doesn’t spoil in transit.
This means it’s crucial for D2C companies selling temperature-sensitive goods to find the ideal packaging solution.
Cold-chain logistics has traditionally relied on insulators like Styrofoam and fossil fuel-powered refrigerated trucks, containers and warehouses to keep products at the necessary temperature. The stresses on logistics networks precipitated by the pandemic have revealed the drawbacks of this approach.
Styrofoam is bulky, while warehouse storage space is now at a premium. This makes this approach costly and inefficient, not to mention unpleasant for the customer who is unable to recycle the Styrofoam packaging.
D2C companies selling temperature-sensitive goods always need to be on the lookout for ways to reduce costs and improve the consumer experience. IPC offers packaging solutions that can help.
IPC’s CelluLiner is a 100% paper-based insulated packaging material that protects frozen and refrigerated shipments from ambient temperatures for up to 48 hours. Available as an insulated box liner or pouch, the material is also 100 percent curbside recyclable.
Increasingly, consumers want to engage with brands that align with their values, such as the importance of sustainability. Opting for a packaging material that’s recyclable instead of one that ends up in a landfill demonstrates that the company cares about sustainability and this will likely encourage the consumer to keep coming back.
Without compromising on effectiveness, IPC’s custom-designed packaging solutions can lower shipping costs and increase consumer engagement. It’s the perfect fit for companies selling temperature-sensitive goods directly to consumers.