Yorkshire to gain 12,000 new jobs and get £1.9bn economic boost as manufacturers supply direct to consumers

The Covid pandemic has seen the level of manufacturers trading on a direct-to-consumer (D2C) basis skyrocket during 2020 with nearly two thirds of Yorkshire residents having elected to go directly to the source of products, rather than go via a third party.

Information published in the A Direct Approach paper by Barclays predicted the D2C route will provide the region’s manufacturing industry with a £1.9bn boost by 2023 and claims the number of roles supported in manufacturing could rise from 66,300 in 2020 to 78,300 in 2023.

The forecast will be positive news for Yorkshire’s industrial sector which on average has seen each company lose 20 per cent of its revenue and 19 per cent of its headcount across 2020.

The Barclays report is based on polling of manufacturers, logistics firms and consumers alongside economic modelling to assess the impact of D2C sales, where traditional channels of distribution such as retailers and wholesalers are bypassed.

The results show that a surge in Yorkshire shoppers going direct will mean sales through this channel total £12.9bn in 2023 – an increase from £10.9bn this year.

The growth is being driven by consumer choices exacerbated by the pandemic.

Sixty per cent of the people from Yorkshire surveyed said they now frequently go direct to manufacturers because they believe they will get a better price and better service.

In addition, nearly a third 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.

The report also contained an encouraging boost for Yorkshire manufacturers’ projections, with half of those polled saying they will continue to shop online as much as they do now.

Lee Collinson, inset, head of manufacturing, transport and logistics at Barclays Corporate Banking, 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.”

Mr Collinson, who is based in Yorkshire, 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 wider UK economy.”

These trends have seen 10 per cent of manufacturers in Yorkshire set-up a D2C channel this year.

The move to D2C means that many manufacturing firms in Yorkshire are creating jobs, with 44 per cent of those introducing direct channels having recruited staff across areas such as customer service.

The logistics sector is also benefiting from the move to D2C, with Barclays estimating that around 85 million packages will be delivered this year thanks to D2C sales, a figure it expects to rise by around 30 to 110 million in 2023, with logistics firms predicting that D2C contracts will account for 50 per cent of their revenue in three years’ time.