You’ve probably heard about the accelerated shift to eCommerce. Brands have transferred to online sales platforms, quicker than anyone could have predicted pre-2020.
It seems like DTC has taken the trophy as the most profitable channel for online selling.
Direct-To-Consumer(DTC), no more middle man. Products delivered straight to your door with ease.
The world’s biggest brands are going direct, Heinz and Coca-Cola to name a couple.
As it goes, there are four main options for brands sell their products online.
- A retailer’s own website.
- Third-party e-commerce site like Amazon.
- A ‘full-stack’ approach means businesses look after the storefront as well as all warehousing and distribution.
- The final option sees the product selling is completely outsourced.
When it comes to outsourcing, brands opting to use the experts, and one name is seemingly the one to watch: The Hut Group, aka THG.
The Hut Group, which was founded in 2004, began by selling CDs and DVDs on entertainment sites. It built and operated on behalf of Asda, Zavvi and Boots; Matthew Moulding and John Gallemore had no idea how far they would come.
Since then it’s grown its online retailer portfolio with the likes of sports nutrition powerhouse MyProtein and luxury beauty website lookfantastic.com.
In November of last year, drinks giant Coca Cola launched its first-ever online store for customers in the UK: Your Coca-Cola. The eCom site was built in response to “growing demand from consumers to buy their favourite brands online.”
Behind the scenes, THG looked after the whole process from start to finish: providing capabilities and expertise alongside and the creation and launch of the platform.
“In the long term, this move will allow us to further optimise our range across all of our customer channels, strengthen consumer loyalty and help us to fulfil our potential as category leader.” – Levy Geraldes told the Grocer.
THG has worked behind the scenes with big-name brands and retailers as throughout its 17-year history
Asda, Tesco: Became e-commerce partner in 2005, initially creating and running home entertainment websites for the retailers.
Nestlé, Unilever: Understood to have been Ingenuity customers since around 2013. THG said in its prospectus the brands expect DTC to account for 10% and 9% of their global sales respectively by 2022.
Procter & Gamble, Estée Lauder, L’Oréal, Diageo: Used THG’s Studio’s to help them with content creation. The division is soon to launch its seventh studio, a 270,000 sq ft site in Manchester.
Walgreens Boots Alliance: THG acquired online beauty retailer SkinStore from Boots’ parent company in 2016. Last year THG paid $350m to acquire Dermstore.com from American retail corp, Target.
In September, it floated in the biggest London stock market debut by market cap since Royal Mail in 2013.
That’s partly thanks to booming brands: its beauty division generated £750m+ in revenue in 2020, and its nutrition arm £550m+, up 57% and 36% in 2019 respectively.
The group added more than 3.5 million new active customers during Q4 2020 alone and 10.7 million over the full year.
THG have cracked the DTC game.
Who can compete?
Source: The Grocer
