The Hidden Reason So Many CPG Brands Struggle Going Direct-to-Consumer

CPG and DTC both sell products using pricing and brand experiences, but CPG brands often struggle when moving direct-to-consumer. The shift changes logistics and customer service from pallet and truckload distribution to individualized pricing, marketing, and shipping. Retail models leave customer relationships with retailers, while DTC enables first-party data capture, margin improvement, and testing new flavors with loyal customers before wider launches. Many CPGs lack systems built for agility and granularity, causing issues such as static, unengaging websites, over-automated customer service that frustrates shoppers, and reliance on marketplaces that expose customers to competitors. When these problems are not handled well, growth and customer experience suffer.

"Traditionally, CPG brands think in pallets and truckloads, moving mass volumes of product to a few key gatekeepers like Kroger, Target, and Walmart. But going DTC requires a more individualized approach to everything from pricing to marketing to shipping. For some, making the shift can be a nightmare. But it's hugely worthwhile because of the data benefits."

"In a traditional retail model, the retailer owns each customer relationship. The brand has no idea who is buying their cookies or why. DTC allows brands to capture first-party data, improve margins, and test new flavors with loyal insiders before a national retail launch. Unfortunately, most CPGs aren't set up for this, with legacy systems built for stability and bulk, not the agility and granularity required to ship a single jar of almond butter to a specific apartment in Chicago."

"Because of this, mistakes pile up. Websites end up looking like a PDF of a grocery store flyer-static, boring, and without the sensory triggers crucial to selling food. Other times, brands over-automate their DTC operations, leading to chatbot-fueled customer service issues and dissatisfied customers. Then there are those CPGs that offload everything to Amazon, putting a giant "Buy on Amazon" button on every page. Sure, this successfully moves product but it also sends customers to a platform where your competitor is one click away."

Read at Inc