FMCG businesses have been talking about D2C for years. The strategic case has been made many times over: brand control, margin recovery, first-party consumer data, and protection against the retail squeeze. Most large FMCG companies understand why they should sell direct. The difficulty has never been the ‘why.’ It has been the ‘how.’
The businesses we work with are typically somewhere on this path. Some are exploring D2C for the first time, prompted by a board question or a competitor’s move. Some have a new CMO or Head of Ecommerce who has inherited something they did not build and needs to work out what is salvageable. And some have a D2C channel that exists but is not working, and they need to understand why before they spend any more money on it. Wherever you are, the operational challenges are more similar than you might think.
D2C for an FMCG brand is different from D2C for a manufacturer, and the differences matter. The decision culture is marketing and brand-led rather than commercial and sales-led. The legacy challenge is retail dependency rather than dealer dependency. And the organisational complexity is often greater, because you are not dealing with one brand and one product range. You are dealing with a house of brands at different levels of D2C maturity, with different consumer profiles, different price points, and different strategic priorities.
That portfolio complexity is the first thing that catches people out. The temptation is to pick the brand that seems most suited to D2C and launch there. That can work, but only if the operational design accounts for the wider portfolio from the start. The ERP, the fulfillment infrastructure, the customer service model, and the data architecture all need to be built in a way that can scale across brands rather than being rebuilt from scratch for each one.
The second FMCG-specific challenge is the systems. SAP or Oracle, built over years to manage the supply chain from factory to retailer. These are serious, enterprise-grade systems, and they do their job well. But they were not designed to process a consumer buying three bottles of something and wanting it delivered to their house by Thursday. The integration between the ERP and the ecommerce platform is a genuine technical problem, not a configuration exercise, and it needs proper architectural thinking before anyone chooses a platform or sets a launch date.
FMCG D2C projects typically involve two people whose experiences of the project are very different.
The first is the sponsor: the CMO or Commercial Director who decides D2C needs to happen. They are the one who secures the budget, manages the board, and makes the strategic case. Their concerns are about risk, ROI, and whether D2C will work without damaging the retail relationships that still represent the majority of revenue. They need an honest external view of the opportunity, a business case built from real operational costs, and confidence that the partner they choose will not embarrass them in front of the board.
The second is the person who runs it day to day: the Head of Ecommerce, Head of D2C, or whoever has been given the operational responsibility. They are working with the systems, managing the agencies, fielding the customer complaints, chasing the IT team for integration timelines, and trying to make the fulfillment work. They need experienced hands: people who have done this before, who can get into the operational detail alongside them, and who will not disappear the moment the strategic phase is finished.
These two people need different things from an external partner, and they experience the project in different ways. The businesses that get D2C right are the ones that recognise this and ensure both the strategic and the operational needs are met, not just the one that is most visible in the boardroom.
The most common failure pattern in FMCG D2C is not a bad strategy. It is a gap between the strategy and the operations. A consultancy maps the opportunity and builds the business case. An agency builds the platform and runs the marketing. But nobody designs the bit in the middle: the fulfillment workflow, the systems integration, the customer service model, the returns process, the data architecture.
When a new person arrives in the role (a new CMO with a digital mandate, a new Head of D2C brought in to fix what is not working), they inherit this gap. The platform exists. The strategy exists. But the operation underneath is held together with workarounds, and the margin per unit is worse than the business case predicted because nobody audited the fulfillment costs properly.
The 3PL is often a bigger part of the problem than anyone realises. FMCG brands typically outsource fulfillment, and the 3PL relationship tends to run on trust rather than scrutiny. SLAs that are not being met. Pick and pack costs that have crept up. Error rates that nobody is measuring. The 3PL is rarely the first place a CMO looks when D2C underperforms, but it is one of the most common sources of margin leakage.
And there is the procurement cycle. The previous agency is probably still under contract. The systems integrator has deliverables outstanding. Procurement approved these suppliers, and procurement does not enjoy revisiting those decisions. Bringing in fresh thinking to diagnose and fix what exists involves navigating internal politics as much as solving operational problems.
If D2C is new territory for the business, start with a proper assessment. Not just the strategic opportunity, but the operational readiness: systems, fulfilment, data, customer service, internal capability. Build the business case from the unit economics up, not from the revenue projection down. A D2C channel that generates orders but loses money on every one is worse than no channel at all.
If you are new in the role and assessing what you have inherited, get an independent view quickly. Understand what is working, what is not, and where the biggest operational gaps sit. Identify genuine quick wins that demonstrate progress (not vanity metrics) and give yourself a credible story to tell the board at the end of your first quarter.
If D2C has been tried and it has not worked, resist the temptation to start again from scratch or to throw more marketing spend at an operation that cannot fulfil properly. Start with a diagnostic: where are orders failing, where are costs leaking, where does the customer experience break down? Fix the operations before optimising the platform. The platform is almost never the problem. The workings underneath it are.
FMCG D2C is not a project with a launch date and an end date. It is a channel that, once built properly, generates compounding value: first-party consumer data, direct customer relationships, margin that does not depend on a retailer’s buying decisions, and insight into consumer behaviour that feeds back into the rest of the business.
But it only compounds if the operational foundation is solid. A D2C channel that costs more to run than it generates, that frustrates consumers with poor fulfilment, or that creates tension with retail partners is a liability, not an asset. The brands that get lasting value from D2C are the ones that treat it as an operational discipline, not a marketing experiment. They invest in the systems, the fulfillment, the data, and the people. They measure it on unit economics, not just top-line revenue. And they ensure that the person running it has the support and the expertise to do it properly, not just the brief and a deadline.
