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Brands are investing more and more in direct relationships with consumers. What initially served as an addition to their existing activities has made D2C an important part of the strategy for many brands. Their own e-commerce platforms, physical brand stores, exclusive launches and loyalty programmes give brands greater control over how they present themselves, their customer relationships and their margins. That is understandable. Why should a brand leave the relationship with its consumers entirely to others when it can develop that relationship itself? Through D2C, brands gain access to information about purchasing behaviour and preferences, helping them understand their customers better and make more informed commercial decisions.
As brands invest more in D2C, the relationships between the different channels within a distribution structure begin to change. Retailers have traditionally been an important sales channel for fragrance brands, but their role goes beyond selling products. They introduce brands to new consumers, allow customers to compare different brands and give products a place within a carefully selected assortment.
The relationship between D2C and retail is not the same for every brand. A young fragrance brand entering the market usually has no established retail relationships or commercial commitments to consider. This gives it more freedom to decide from the beginning what role D2C, retailers and potential distributors should play in its strategy. Through D2C, the brand builds direct relationships with consumers and learns which products, messages and experiences appeal to them. This information helps the brand recognise changes in consumer behaviour earlier and adjust its strategy accordingly.
At the same time, a young brand still needs to establish itself in the market. A strong D2C presence can provide a good foundation, but it does not automatically reach consumers who are not yet familiar with the brand. Retailers can introduce the brand to these consumers, even when they are not actively looking for it. For brands working with a distributor, the distributor plays an important role in selecting and developing retail partners that fit both the brand's current positioning and its future ambitions. This creates a distribution structure in which different channels contribute to market development in their own way.
The situation is different for a brand that has built much of its position through retailers. It already has a network in which different parties have invested over many years. Retail relationships have contributed not only to sales, but also to the brand's awareness, positioning and credibility. Consumers have discovered the brand in shops, tried its products and developed trust through the environment in which it was presented. When the brand starts to focus more strongly on D2C, more changes than just the distribution of sales between channels. It gains more direct access to consumers and takes greater responsibility for managing those relationships itself.
This brings clear advantages. The brand can present its own world more consistently, introduce products directly and have greater control over the experience it offers consumers. However, greater control over its own presentation does not automatically mean that the overall brand experience becomes stronger. A carefully selected retailer adds something that the brand cannot create in quite the same way through its own channels. Because the retailer represents several brands, its decision to include and recommend a particular brand carries a different meaning from the brand's own communication.
As D2C takes on a larger role, the position of retailers within the distribution structure also shifts. Exclusive products, direct communication and commercial benefits for customers buying through the brand's own channels make D2C more attractive to consumers. As a result, the role of retailers can change without this being reflected in the number of points of sale. For the brand, it becomes increasingly important to understand what each channel actually contributes to further market development.
That contribution is not always easy to determine clearly. D2C performance is relatively visible. Revenue, conversion rates, average order value and customer retention provide a clear picture of how the channel is performing. What is less visible is the contribution other channels make to brand awareness and appeal. A consumer may discover a fragrance at a retailer but eventually purchase it directly from the brand. The sale then appears in the D2C results, even though the first introduction happened elsewhere. The reverse also happens: someone discovers the brand through its own communication and later purchases from a retailer.
Growing D2C revenue therefore does not necessarily mean that the brand as a whole is becoming stronger. Part of that growth may simply be a shift in existing sales, without creating new demand. The higher gross margin on D2C sales is attractive, but it also comes with costs for marketing, fulfilment, customer service and acquisition. More important is what this shift means for the brand's overall market position. If D2C grows at the expense of channels that develop new consumer demand, the brand may strengthen its direct sales position while weakening part of the foundation for future growth.
The balance within a distribution structure changes as a brand develops. Some channels mainly serve existing demand, while others reach new consumers. D2C itself can also create demand that eventually leads to sales through other channels. A balance between channels that works well at one stage may no longer be the right one at another.
D2C performance is becoming increasingly visible, giving brands more opportunities to manage their commercial activities. But because the contribution of other channels to demand development is less directly visible, there is a risk that their value receives less attention in strategic decisions. A brand that bases its distribution strategy mainly on the results it can measure most easily is not necessarily evaluating the channels that contribute most to its future market position.
Brands are investing more and more in direct relationships with consumers. What initially served as an addition to their existing activities has made D2C an important part of the strategy for many brands. Their own e-commerce platforms, physical brand stores, exclusive launches and loyalty programmes give brands greater control over how they present themselves, their customer relationships and their margins. That is understandable. Why should a brand leave the relationship with its consumers entirely to others when it can develop that relationship itself? Through D2C, brands gain access to information about purchasing behaviour and preferences, helping them understand their customers better and make more informed commercial decisions.
As brands invest more in D2C, the relationships between the different channels within a distribution structure begin to change. Retailers have traditionally been an important sales channel for fragrance brands, but their role goes beyond selling products. They introduce brands to new consumers, allow customers to compare different brands and give products a place within a carefully selected assortment.
The relationship between D2C and retail is not the same for every brand. A young fragrance brand entering the market usually has no established retail relationships or commercial commitments to consider. This gives it more freedom to decide from the beginning what role D2C, retailers and potential distributors should play in its strategy. Through D2C, the brand builds direct relationships with consumers and learns which products, messages and experiences appeal to them. This information helps the brand recognise changes in consumer behaviour earlier and adjust its strategy accordingly.
At the same time, a young brand still needs to establish itself in the market. A strong D2C presence can provide a good foundation, but it does not automatically reach consumers who are not yet familiar with the brand. Retailers can introduce the brand to these consumers, even when they are not actively looking for it. For brands working with a distributor, the distributor plays an important role in selecting and developing retail partners that fit both the brand's current positioning and its future ambitions. This creates a distribution structure in which different channels contribute to market development in their own way.
The situation is different for a brand that has built much of its position through retailers. It already has a network in which different parties have invested over many years. Retail relationships have contributed not only to sales, but also to the brand's awareness, positioning and credibility. Consumers have discovered the brand in shops, tried its products and developed trust through the environment in which it was presented. When the brand starts to focus more strongly on D2C, more changes than just the distribution of sales between channels. It gains more direct access to consumers and takes greater responsibility for managing those relationships itself.
This brings clear advantages. The brand can present its own world more consistently, introduce products directly and have greater control over the experience it offers consumers. However, greater control over its own presentation does not automatically mean that the overall brand experience becomes stronger. A carefully selected retailer adds something that the brand cannot create in quite the same way through its own channels. Because the retailer represents several brands, its decision to include and recommend a particular brand carries a different meaning from the brand's own communication.
As D2C takes on a larger role, the position of retailers within the distribution structure also shifts. Exclusive products, direct communication and commercial benefits for customers buying through the brand's own channels make D2C more attractive to consumers. As a result, the role of retailers can change without this being reflected in the number of points of sale. For the brand, it becomes increasingly important to understand what each channel actually contributes to further market development.
That contribution is not always easy to determine clearly. D2C performance is relatively visible. Revenue, conversion rates, average order value and customer retention provide a clear picture of how the channel is performing. What is less visible is the contribution other channels make to brand awareness and appeal. A consumer may discover a fragrance at a retailer but eventually purchase it directly from the brand. The sale then appears in the D2C results, even though the first introduction happened elsewhere. The reverse also happens: someone discovers the brand through its own communication and later purchases from a retailer.
Growing D2C revenue therefore does not necessarily mean that the brand as a whole is becoming stronger. Part of that growth may simply be a shift in existing sales, without creating new demand. The higher gross margin on D2C sales is attractive, but it also comes with costs for marketing, fulfilment, customer service and acquisition. More important is what this shift means for the brand's overall market position. If D2C grows at the expense of channels that develop new consumer demand, the brand may strengthen its direct sales position while weakening part of the foundation for future growth.
The balance within a distribution structure changes as a brand develops. Some channels mainly serve existing demand, while others reach new consumers. D2C itself can also create demand that eventually leads to sales through other channels. A balance between channels that works well at one stage may no longer be the right one at another.
D2C performance is becoming increasingly visible, giving brands more opportunities to manage their commercial activities. But because the contribution of other channels to demand development is less directly visible, there is a risk that their value receives less attention in strategic decisions. A brand that bases its distribution strategy mainly on the results it can measure most easily is not necessarily evaluating the channels that contribute most to its future market position.