Lecture 11 Flashcards
1
Q
Motivations to go DTC
A
- Higher profit margins (“cutting out the middle man”)
- More control over brand image
- Direct access to consumers and their data
2
Q
Two main types of DTC
A
- Brands born online that only sell to consumers via their own website and/or stores, so-called “Digitally Native Vertical Brands”
- Established brands, which mainly sold their products through physical retailers, operating their own online sales channel or physical stores (Nike)
3
Q
Subscription models
A
Automatically replenishing a product by sending it, or making it available for pick-up, to the consumer
4
Q
Subscription model benefits consumer
A
- Convenient
- Cost effective
5
Q
Subscription model benefits brand
A
- Lock-in of consumers
- Predictable demand
- Steady stream of revenues
- Potential for up- and cross-selling over time
6
Q
Drivers of rental popularity
A
- Growing consumer interest in sustainability
- Move from ownership to access (Netflix, Spotify, etc.)
- Gaining popularity in fashion (Rent the runway)
- Challenge: keeping the assortment up to date and curated
7
Q
Challenges in re-commerce
A
- Integrating new types of activities such as buyback, repair, and re-sell into your existing operations
- Avoid dilution of the brand image
- Avoiding cannibalization of pure selling activities
