The role of customer-based brand equity in the direct-to-consumer business model

Abstract: This paper aims to explore and analyze the intricate relationship between the direct-to-consumer (D2C) business model and customer-based brand equity. This study utilizes a qualitative approach to gather primary data, aiming to gain profound insights into customer perspectives regarding the impact of the D2C business model on trust, loyalty, and value perception. A focus group methodology was chosen to acquire comprehensive insights into the strengthening of customer-based brand equity through the D2C model. The study found that there exists a relationship between the D2C business model, customer perception, and customer-based brand equity management. This relationship relies on four factors: (1) the perception of brand quality impacting consumer purchasing decisions, shaped by cost-effectiveness and positive customer experience provided by the D2C business model; (2) the brand awareness that remains a challenge, while D2C brands excel in attributes such as price, quality, trust, and reliability; (3) D2C's control over the brand image and sustainability efforts cultivates positive brand associations throughout the value chain; and (4) D2C's integrated business model distinguishing it from monopolistic players and offering a unique customer experience valuable to consumers. Given the key role of business models for brand success, exploring the interplay between branding and the D2C model is vital. In light of consumers as primary brand evaluators, adopting a customer-centric approach to brand management is necessary. Competitive D2C brands, like Glossier, attribute their success to such strategies. Through literature analysis, framework development, and empirical data from focus group interviews, the study fills a research gap and offers valuable theoretical and managerial insights.