Daily Insights

OTC Eyes DTC Commerce

By: Cymone Thomas | Mar 06, 2020

Direct to consumer (DTC) selling models continue to be a hot topic among manufacturers that seek to claim more control of the purchase process, develop more margin-friendly business models and create a direct relationship with consumers. At the same time, product assortment and core competencies of manufacturers often do not lend themselves well to a scalable DTC business model. This scenario often plays out in the fast-moving consumer goods (FMCG) category. Within that, over the counter (OTC) manufacturers are worst affected, with only 10% of brands in Gartner’s FMCG U.K. Digital IQ Index 2020 offering DTC commerce. Moreover, this cohort lags its counterparts in several other digital touchpoints from social media to digital marketing.

Keen to take control of the consumer’s online purchase journey and create a point of difference between its peers, Reckitt Benckiser launched a DTC pharmacy in 2019. The platform, yourpharmacy.co.uk, offers a wide range of RB health brands and comes in the wake of over 300 pharmacy stores closing.

Birthing a DTC offering from an enterprise level sidesteps several roadblocks that individual brands face. With the infrastructure being maintained at an enterprise level, the operational and financial responsibility can be spread across multiple brands. On the consumer side, they benefit from a wide assortment of products, akin to the breadth found on e-tailers. This enables consumers to more easily fill their baskets to meet shipping minimums, hence boosting the value proposition of shopping on their site, rather than on e-tailers. Consumers are also presented with a seamless online shopping experience as they travel from Google shopping ad to product page and checkout without the need for third-party plugins for commerce.

YourPharmacy’s growth in site visits is evidence of its success. It received over 200,000 visits in December 2019, within ten months of its launch. FMCG brands considering the DTC route should, therefore, assess the feasibility of joining forces at an enterprise level, rather than going solo.

See more: Europe , FMCG , Reckitt Benckiser