Direct-to-Consumer (DTC) Business Model

Relationship marketing is a strategic approach that shifts the focus from individual transactions to building long-term customer loyalty and engagement. It emphasizes customer retention, satisfaction, and lifetime value over short-term sales goals. Key tactics include customer relationship management (CRM) systems, loyalty programs, and personalized communication, aiming to create a strong, emotional connection between the brand and the customer.

Disintermediation is the economic process of removing intermediaries from a supply chain, thereby connecting producers directly with consumers. In the DTC context, this means bypassing traditional wholesalers, distributors, and brick-and-mortar retailers. This structural change allows brands to capture profit margins that would otherwise go to middlemen, while also gaining direct control over their product's journey and presentation to the market.

The C2C model has two primary implementations: online marketplaces and classifieds. Marketplaces, like eBay, are highly integrated, providing payment processing, structured listings, and reputation systems. They are active intermediaries. In contrast, classifieds platforms, like Craigslist, act more as simple connectors, providing a venue for listings but typically leaving the payment and transaction logistics entirely up to the users themselves.

5S is a workplace organization method that uses a list of five Japanese words: Seiri (Sort), Seiton (Set in Order), Seisō (Shine), Seiketsu (Standardize), and Shitsuke (Sustain). This system aims to improve efficiency and eliminate waste by organizing a workspace for effectiveness. It is a foundational component of Kaizen and lean manufacturing, creating the stable environment necessary for improvement.

Gemba (現場) is the Japanese term for 'the actual place.' In management, it refers to the place where value is created, such as the factory floor. Gemba Kaizen is the principle of going to the Gemba to observe the process, engage with workers, and identify opportunities for improvement directly at the source, rather than from a remote office.

Customer-to-customer (C2C) is a business model where consumers trade directly with each other, typically facilitated by a third-party online platform. This model contrasts with business-to-consumer (B2C) and business-to-business (B2B) models. The platform provider is not the seller but an intermediary that enables the transaction, creating a market for second-hand goods, handmade items, or collectibles.

Digital trust and reputation systems are critical mechanisms that facilitate cooperation between strangers in online P2P platforms. They quantify and display the past behavior of users, typically through ratings, reviews, and endorsements. This creates a form of social collateral, reducing transaction uncertainty and risk, which is essential for the functioning of the sharing economy where traditional trust indicators are absent.

A Digitally Native Vertical Brand (DNVB) is a specialized type of DTC company that originates online and controls its entire value chain. The 'vertical' aspect refers to their integration of design, manufacturing, marketing, and distribution. Unlike traditional brands that may adopt a DTC channel, a DNVB's primary mode of customer interaction, transaction, and brand-building is digital from its inception.