Understanding customers’ choice for digital D2C versus multi-brand operations

Abstract

In recent years, the emergence of highly successful digital multi-brand retailers has facilitated an omnichannel distribution strategy to become the norm for brands. Rather than relying solely on these multi-brand retailers, it is necessary for companies’ omnichannel strategy to establish strong brand-owned direct-to-consumer (D2C) webstores. To help D2C brands make decisions regarding distribution channel choices, this paper investigates the circumstances under which customers prefer brands’ D2C webstores over digital multi-brand retailers and how these circumstances vary across phases of the customer journey. The results from an extensive experimental study demonstrate that, depending on the customer journey, brands’ D2C webstores can compete with digital multi-brand retailers, particularly in product categories characterized by deep assortments, the need for extensive product information, exclusive products, or a high degree of personalization.