British manufacturers are set to gain £13 billion over the next five years by shifting their focus from selling to wholesalers and retailers, and going direct to consumers, a new report by Barclays Bank has found.
Researchers discovered that nearly three out of four manufacturers now sell direct to consumers – a boost of 55% over the past five years.
Of those who have invested in technology to target households directly, around 45% said they had benefited from a boost in revenues, 38% said their customer base has grown, and 32% said it had increased their speed to market.
The shift by manufacturers and major companies to target consumers directly has speeded up in recent years.
Nike recently revealed that it was launching a direct sales channel called Nike Direct, and start-ups including Eve Mattresses and Harrys razors started life as direct-to-consumer businesses.
Economic modelling commissioned by Barclays, which analysed current growth rates, customer demand and investment in direct-to-consumer channels, estimates in its report Going Direct: Is Direct-To-Consumer Selling Set To Revolutionise The Manufacturing Sector? that the value of the market will boom to £13 billion by 2025.
Lee Collinson, head of manufacturing at Barclays, said: “The rise in businesses selling direct to customers is one of the biggest changes the manufacturing industry has seen in generations.
“As companies go it alone, bypassing wholesalers and retailers, they are increasingly embracing social media and digital channels to advertise and sell their products direct from the factory, and then managing the sales, distribution and after-care themselves.
“It’s a massive shift and the rewards are potentially huge, with nearly half of companies selling DTC reporting an increase in revenues as a result, along with a bigger customer base and the ability to personalise products.”