Daily Insights

DTC vs. E-Tailer Handoff

By: Megan McVay | Aug 28, 2019

Consumer electronics brands fall into three categories according to the commerce method on their site: brands that sell only direct-to-consumer (DTC-only), brands that sell DTC and link to e-tailers (hybrid commerce model), and brands that exclusively link to e-tailers (e-tailer-only).

40% of brands tracked in Gartner L2’s Digital IQ Index: Consumer Electronics fell into the DTC-only bucket, up 16% from last year. Digital audio brands led the shift to DTC, with brands like Yamaha, Bowers & Wilkins and Klipsch honing their DTC practice. The digital audio category is now 65% DTC-onlythe highest concentration across product categories.  

The hybrid commerce model is still the most popular, adopted by 50% of analyzed brands. Providing shoppers with multiple purchase options can be good insurance against customers abandoning the purchase entirely. Certainly, some Prime members would rather checkout on Amazon, where shipping and payment information is already stored. 

Within the hybrid category, select brands heavily favor DTC over hand off to e-tailers. Although 46% of brands with the hybrid commerce model link to e-tailers directly on product pages, 72% of these brands place their DTC option above these links. For example, Nikon’s DTC option is above the fold on product pagesand often includes discount language like “$70 off Instant Savings”while its “Where to Buy” section is a scroll down. 

Even when shoppers choose to purchase on an e-tailer site, brands wage a final battle to secure the direct sale. Within the handoff window listing e-tailers, many place their DTC option at the top with fulfillment-related messages like Samsung’s “Free Shipping on All Orders,” Roku’s “Free shipping over $50,” and Microsoft’s “Free Shipping, Free Returns.” 

Only 10% of brands fall into the e-tailer-only bucket (exclusively re-directing sales to e-tailers from their their brand site). Sony falls into this group. Aligning with its decision to close all but two of its Sony Stores in 2015, the brand scaled back on its DTC efforts online to focus on its retailer presence. 

While these commerce models have pros and cons, brands should optimize whichever they choose. Those linking to e-tailers must ensure handoff is smooth and leads as far down the funnel as possible and those prioritizing DTC must support customers on their sites with shopping tools, advanced search and navigation and a seamless checkout experience.