Some say that it’s more cost effective to be D2c by eliminating all middlemen. Which I think could be true in some cases if your brand has strong affinity but not necessarily true if you don’t have enough repeat purchases and always acquiring customers through advertising on Facebook, Google etc (the new middleman).
It makes sense for smaller, newer brands to embrace D2C as that probably is the most cost-effective way for them to launch the brand. But Pepsi has the supply network streamlined better than most companies in the world and probably not going D2C for cost-reduction. So why did Pepsi embrace the D2C?
I think, they are going D2C for other benefits of the model. Such as building relationships and acquiring data.
When you’re winning over your competition at a retail store, you may be winning the sale, but are you winning over your customers? Do you have control over your customers’ experience?
Do you have your customers’ data? Do you have their address, phone number, or other demographic data?
Do you really know your customer, or are you making (educated) assumptions about them?
How do you test or launch new products?
These are the reasons why I think Pepsi is embracing D2C.