Despite the digital shopping boom during the pandemic, recent studies show that more than half of consumers still prefer in-store purchases, prompting a resurgence in retail. This trend is being embraced by several consumer packaged goods (CPG) brands, including frozen and snack producer Sweet Nothings, which is shifting its focus from a predominantly Direct-to-Consumer (DTC) model back to retail, as reported by Food Navigator.
Jake Kneller, CEO of Sweet Nothings, cites three main reasons for this strategic pivot:
- Broader Availability: With their products are now offered across more US retailers, allowing the company to reach more consumers efficiently.
- Simplified Logistics: By moving away from DTC, the company avoids the complexities and costs associated with frozen shipping logistics.
- Reduced Carbon Footprint: This transition also supports sustainability goals by significantly lowering the company’s carbon footprint.
Brands making this shift are not forgoing the online experience. On the contrary, by focusing on retail, they have the opportunity to reach a broader consumer demographic and build sustainable relationships that can foster future online interactions.
While DTC offers brands direct engagement with consumers, it can be challenging to cultivate widespread brand awareness and customer loyalty through online efforts alone. Physical retail outlets offer a tangible presence and personal interaction that can often better nurture these relationships.
Sweet Nothings delivered the news of their transition away from frozen DTC operations via email, assuring customers about the availability of their products in local retailers and online platforms. The response from consumers was overwhelmingly positive.
While shifting focus, Sweet Nothings isn’t completely abandoning DTC. Their new product, Nut Butter Bites, will be available for online purchase, demonstrating a balanced approach to DTC and retail.
Kneller advises other CPG companies to be realistic about what products are viable for DTC shipping, while we advise retailers to rejoice in the focus coming back to in-person retailers and grocers.
TL;DR
A significant number of CPG brands, such as Sweet Nothings, are transitioning from a predominantly DTC model back to a retail-focused approach. This shift is driven by a desire to reach a broader consumer base, simplify logistics, and reduce carbon footprint. While this doesn’t mean a complete departure from DTC, it shows a balanced approach to retail and online sales, a strategy that other CPG companies might benefit from considering.
