Unlocking the benefits of direct-to-consumer (DTC) strategies without alienating dealers

Abstract

This study examines the evolving role of direct-to-consumer (DTC) strategies among product manufacturers, with a particular focus on their relationship with dealer-based customer engagement. While moving closer to customers via DTC models offers significant benefits (e.g., enhanced brand identity, improved competitive positioning, valuable data insights, and increased customer retention), these strategies can also generate tension with traditional dealer networks. Such tensions give rise to the DTC paradox, in which DTC initiatives fail to deliver anticipated returns and strain dealer relationships. Drawing on four in-depth case studies from leading international manufacturers, this article outlines a framework for implementing DTC strategies across key phases of the customer journey: awareness, purchasing, usage, and retention. The findings demonstrate that rather than bypassing dealers, manufacturers can achieve better outcomes by integrating dealers into their DTC strategies. This hybrid approach reduces channel conflict, enhances digital engagement, and fosters stronger, long-term customer relationships. Our study contributes to the literature on omnichannel marketing, hybrid sales models, and coopetition, offering actionable insights for manufacturers navigating the challenges of digital transformation while maintaining productive dealer collaborations.