Fast-track growth inorganically

The world’s leading companies know they can’t win alone. And most believe partnerships are the key to driving future success. Not surprisingly, many businesses plan to grow their D2C offerings through inorganic growth — often by joining platforms, engaging in partnerships or conducting M&A activity.

One route to D2C markets is through platforms. Shopify, for example, offers merchants powerful back-office functions and tracking tools that help businesses manage their transactions and interactions. Others offer a full suite of inventory management, order fulfillment, finance, payments and CRM capabilities. The largest platforms offer both seller and vendor models, allowing merchants to participate in a range of models. Thus, for many businesses, the scalable costs and capabilities — combined with the low capital cost to build — make platforms a smart option.

At the same time, many players are looking to grow through M&A and bolt-on acquisitions. Nestle, for example, has made a series of investments in the past year to reinforce its D2C capabilities.

The sector has also drawn in a number of VC and PE firms who see D2C as part of the ongoing shift in consumer sentiment and preferences. They also believe D2C will appeal more to a younger, more tech-savvy demographic.

Your D2C strategy is only as strong as the players in your ecosystem. That makes it incredibly important to strive to ensure that — whether you are joining a platform, conducting M&A activity or seeking new partners — you are selecting the right partner with the right capabilities to allow you to deliver on your objectives today, and as you scale up in the future.

Have a clear roadmap to plan for future success

Finally, organizations should seek to improve their understanding of the outside-in view of the market, and the inside-out view of the specific partner or target they are exploring. Our experience suggests there are a number of lenses that acquirers or those seeking partnerships should use to help ensure a stronger, more sustainable and value-driven relationship.