With consumer behavior changing radically, and many retail channels in turmoil, consumer goods companies and brands have little alterntive but to start or expand direct to consumer strategies (DTC).

But the economics are very different. It costs twice as much to acquire a DTC customer as one buying through traditional retailers, the consultants at McKinsey say. So, consumer good brands have to thinking thinking from the perspective of lifetime customer value, as shown in chart below.

Source: McKinsey

As can be seen, McKinsey work to build a DTC business where the lifetime customer value is twice the cost of customer acquisition costs before fully scaling the program.

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