Direct to consumer sales set to boost Scottish economy by £2.5bn


NEW financial research shows the Scotland is set to have a £2.5bn boost due to a boom in manufacturers selling direct to consumer (D2C).

The report shows that a surge in Scottish shoppers going direct will mean sales in this channel will increase to £9.7bn in 2023.

The report titled, “A Direct Approach” was compiled by Barclays Corporate Banking and shows a “healthy” surge in spending over the next few years.

Young woman opening box with lamp at home
60% of consumers in Scotland now choosing to buy direct from manufacturers

Three fifths of Scots surveyed said they now frequently go direct to manufacturers because they believe they will get a better price and better service.

In addition, two fifths of consumers are buying direct as a conscious decision to support the UK manufacturing sector.

The most frequently purchased through the ‘direct approach’ are clothes, electronics and food and drink, as well as larger items such as household appliances and furniture.

Encouragingly for manufacturers, consumers’ newly-formed habits look to continue even after the pandemic.

More than half of consumers say they will continue to shop online as much as they do now, and some predicting they’ll turn to e-commerce even more often.

These trends have seen 14% of manufacturers in Scotland set-up a D2C channel this year, each investing an average of £290,562 to do so.

It’s also thought there could be as many as 12,800 new job roles in Scotland supported by D2C sales across the next three years.

This is positive news for an industry where, on average, each company has lost 26% of its revenue and 19% of its headcount across 2020.

Andy Hall Head of Corporate Banking at Barclays - Business News Scotland
Andy Hall – Head of Corporate Banking, Central Scotland at Barclays says D2C sales will help manufacturing firm increase earnings.

Andy Hall, Head of Corporate Banking, Central Scotland at Barclays, said: “2020 has been a turbulent year for all industries, and the manufacturing sector is no different.

“However, the increasing demand to procure goods direct from the companies that make them is providing growth opportunities and confidence for manufacturers of all sizes.”

The logistics sector is also benefiting from the move to D2C.

Barclays’ report estimates that around 85 million parcels and packages will be delivered to UK households this year.

This is due to D2C sales from manufacturers, with these kinds of contracts eventually accounting for half their annual revenue

Mr Hall added:”D2C sales will help manufacturing firms increase their earnings and protect and create jobs in the next three years: that’s a welcome shot in the arm not only for the industry, but also for the Scottish and wider UK economy.”