From struggling “D2C” to “CTC” that also uses Web3 ──Special feature “THE WORLD IN 2023” | WIRED.jp

The annual all-out special feature “THE WORLD IN 2023”. Shopify’s Simona Mehta proposes a more resilient, evolved D2C model, CTC (Connect to Consumer).

Complete nutrition food that appeared in the last 10 yearsHuel” and men’s grooming products ”Harry’sis helping build multi-billion dollar retail businesses by leveraging social media, digital-first advertising, and selling directly to consumers without middlemen. have been successful. These direct-to-consumer brandsD2CIt is the epitome of a new retail model called (direct-to-consumer).

This trend was accelerated by the global pandemic, forcing many brick-and-mortar stores to close, while online store sales continued to grow. Consumers have also jumped on the bandwagon, with around 60% purchasing D2C branded products at least once in 2021.

From D2C to CTC era

But now that the pandemic is slowly coming to an end, the market is changing rapidly again. For example, Nike’s D2C sales in 2021 increased 30% year-on-year to $16.5 billion (about 2.2 trillion yen),Warby ParkerMoreorAllbirdsThe listed D2C majors were forced to struggle, and their stock prices fell 64% in 2022.

The economic factors behind the poor performance of these brands are obvious: rising inflation and a shift in the economic balance due to supply chain disruptions are putting pressure on retailers. A report by leading consultancy McKinsey & Company found that two-thirds of UK consumers now see price rises as their top concern, with around 70% forced to change their spending behavior, with this They answered that they began to purchase cheaper brand-name products than before.

But there are other factors at play in the recent demise of DTC brands. for example,appleadded a new privacy feature in 2021 that made it impossible to track user data across apps and websites without prior permission from the user. As a result, brands that have switched to paid social media ads to acquire new customers are struggling with ballooning costs.

In response to these market trends, in 2023, we will see the emergence of a succession of “more resilient, advanced D2Cs” that I call CTC (Connect to Consumer). What is CTCWeb3,Social mediaonline stores, physical stores, etc., simultaneously utilizing multiple platforms to reach consumers.

Converting to CTC requires creative thinking about how to tell your brand’s story and grow your community on these four different platforms.

For example, in July 2010, a British fitness apparel brandGymsharkhas opened a pop-up barber shop where a barber who has undergone mental health training resides, as a place where men can talk about their worries that they usually find difficult to talk about.On the other hand, men’s makeup brandWAR PAINT.has refurbished a closed and vacant store into a showroom for online buyers and is using it as a new touchpoint with consumers.

Wider reach possible

Many trials of the CTC model can also be seen on social media.Model and businessman Kylie Jenner joined Shopify in 2022.TikTokUsing “TikTok Shopping,” an EC function launched in partnership with , to link her TikTok account and online store, 47.7 million followers directly purchase products from her cosmetic brand Kylie Cosmetics within TikTok. made it possible. Orders on her social media channels quadrupled in the first quarter of 2022, according to Shopify.