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How DTC Can Fuel NPD for Your FMCG Business

Direct-to-consumer (DTC) is pivotal for new product development (NPD), offering vital insights, first-party data, and agility for your FMCG brand. Find out how expanding your DTC presence can help your FMCG business innovate better.

October 23, 2023

Devina Patel, Anastasia Hamurari

Having traditionally prioritized brick-and-mortar retail, FMCG brands are now finding it necessary to supplement their physical presence with a digital one. This way, they can have both – a tangible presence and a way to leverage it for faster and more successful product launches.  

What’s more, adopting an omnichannel approach allows you to stay ahead of competition that relies solely on trading on one channel.

Having a DTC channel in addition to physical retail thus offers a direct link to consumers that makes new product development (NPD) more straightforward and efficient.  

In this article, we discuss the transformative role DTC plays in the realm of NPD for FMCG businesses.

From being able to collect first-party data to crafting personalized offerings, DTC can be that missing puzzle piece that takes your brand’s NPD from satisfactory to epic.

Customer connection allows agility

Consumers’ expectations for brands that they choose to engage with or purchase from are constantly changing, and so are customer journeys.

Consumers are now moving away from traditional media and offline retail, and FMCG brands need to stay abreast of this evolution with the help of the following:  

Technology-enabled direct connection

Technology has enabled companies to create a direct connection with their consumers.

Take Procter & Gamble for instance.

The pharmaceutical company's usage of digital technology to harvest comments on social media and in the blogs’ comment sections allows it to react quickly to capitalize on opportunities and minimize the impact of negative brand perception.

Brand-consumer relationships continue to transcend physical requirements, as we move towards mobile-centricity, cashless payments, and machine-learned recommendations.

Digital channels supercharge the connection to these consumers, enabling better understanding and responses to them. This can then be applied to offline channels to create a holistic approach to marketing and pricing, led by omnichannel excellence.

Cosmetic products on a table against a white background

Growing benefits of DTC

DTC is a channel that allows increased agility for brands, as well as being a source of crucial insights for wider brand direction and NPD. It provides first-party data on consumer behaviour and preferences.

A few examples of this include product landing pages that have higher traffic, blog posts with more engagement, and social media posts that drive customer acquisition. All of this contributes towards better targeted NPD.

Another key benefit of DTC is the ability to move at a faster pace with new products and deliver them directly to consumers by removing middlemen.

Improved inventory management and customer engagement

Direct lines of communication with consumers enables better inventory management, and response to demand – which represents an opportunity to win over and above competing propositions.

For instance, Toblerone uses their DTC to launch exclusive edition products, in a bid to understand the appetite for their new flavours.

In some cases, flavors become permanent additions to their product lineup, which are then distributed through various channels, thus establishing a consumer-centric ecosystem based on preferences.

A selection of dark chocolate Toberlones in black packaging

Maximizing DTC potential in FMCG

Brands can take this concept of exclusivity further by offering innovative experiences with DTC purchases through packaging concepts that cement the online buying experience, increase chances of return purchases and strengthen brand loyalty.

When considering your NPD lifecycle and process, it’s imperative to integrate your DTC channel into this.

The best place to begin is via in-depth market research to identify key opportunities amongst your existing and target consumers. You can then begin to establish demand, gaps and synergies with your product development offerings, develop product concepts and initiate prototypes.

When considering investment into concepts, it’s important to use the voice of customers, focus groups, surveys, and interactive social media posts to understand their preferences.

NPD should be geared towards supporting existing customers and acquiring new ones, who will then go on to explore the brand further.

This creates a continuous loop of knowing your customers and, consequently, creating products and digital experiences that caters to their wants and needs.

Myprotein’s accelerated new product development

Myprotein's New Products page is an example of an FMCG brand showcasing its new releases ranging from flavors, and collaborations to special release bundles.

Highlighting innovative products can differentiate your brand from competitors, attract new customers and re-engage previous purchases – all contributing to improved reach and revenue.

What’s more, new product innovation decisions are informed by millions of daily demand insights from THG Nutrition’s active customer base, providing instantaneous direct feedback from consumers.

As a result, manufacturing products in-house has shortened the typical NPD timeline from around 12-15 months to around 6-9 months.

A man mixes a protein shake using a Myprotein shaker

Unlocking the power of DTC: Supercharging NPD for FMCG success

Whilst undergoing product development, it’s important to understand the digital requirements of your brand and invest in a robust DTC platform.

THG Ingenuity’s DTC platform enables rapid scalability for brands domestically and internationally, plus our expert teams can help with legal and regulatory compliance for NPD.

Additionally, FMCG brands can benefit from THG Ingenuity’s complete commerce solution designed to increase customer engagement and conversion, and ultimately support brand ambitions.

A dynamic approach for NPD utilizing DTC can help leverage direct customer interactions, data, and insights to create products that are tailored to consumer demands thus driving growth and brand loyalty for FMCG businesses.  

Start a conversation today with our solution experts and discover how THG Ingenuity can enable a journey of digital commerce growth for your business.

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