Direct To Consumer eCommerce: How to get started

By Lauren Cassidy, Content Marketer at Kooomo

Here we are, almost one year into “unprecedented times” and uncertainty still reigns supreme across many countries and industries. If one thing is for certain, it’s that an online presence is now an absolute necessity for businesses survival and user experience is the key differentiating factor between competitors. Therefore, as more and more retailers seek to take control of their user experience, we’re expecting many brands to follow major players such as Nike and Nestle down the Direct to Consumer route. But what exactly does that mean?

Direct to Customer (or ‘D2C’), is a low barrier-to-entry eCommerce strategy that allows manufacturers and Consumer Packaged Goods brands to sell directly to the consumer (removing the need for a middleman). While third-party distributors (for example, supermarkets and multi-brand outlets) are likely to always play a part in the consumer sales mix, D2C brands proved the advantages of having total business control during the pandemic. Forbes discusses how D2C brands were able to fast-track customer engagement initiatives that were already underway pre-covid. As a result, D2C brands surveyed by Totem Media reported 58% fewer sales declines than traditional retailers since the onset of the global health crisis.  

Sounds like an avenue you wish to explore but unsure if it’s the right move? Dipping your toe in the D2C waters doesn’t necessarily mean that you have to cut the middleman out altogether. You can easily add a D2C strategy to your offering and still maintain the sales channels you already have - luckily this can be done in a fast, affordable, and very successful way. Let’s discuss the initial checklist before converting your eCommerce strategy...

1. Manage your existing relationships with care.

It’s important to manage your current relationships with wholesalers and other retailers with care - since you’re just testing the waters, it’s vital not to burn bridges with your existing partners.

Communicate your strategy to them, explain your reasonings and work out a profitable way to move forward. Whether that’s a phasing out process, segmenting your product lines or any other deal that you might strike up. Be firm but fair - you never know how much your product means to these partners, so be sure to manage this change delicately.

2. Assess your current eCommerce site for gaps in D2C processes

How does your UX fair against competitors? It’s a good idea to test out other D2C sites, go through their customer journey, identify what features are necessary and what could be improved upon - as we said, UX is a key competitive differentiator.

Transitioning from bulk sales to a single unit can require some niggly, but essential changes to items including product info, shipping, returns, delivery info and payment methods. You might find yourself asking questions such as - “Will I need landing pages to manage promotions that are no longer bulk based? How does our search tool fair? What tools will we use to boost Average Order Value?

Keep these in mind and you’re sure to create the optimum D2C experience.

3. Optimise and automate fulfilment

Moving to a D2C operation will mean a big change in your operational procedures with a focus on a fast and frictionless buying experience for your customers.

If companies merely dip their toes in a D2C strategy, it’s not critical to massively redesign the whole supply chain network. However, if the strategy is successful and starts accounting for a significant portion of the business companies will need to rethink their strategy to accommodate the shift. For example, distribution points, contractual arrangements with Third Party Logistics, warehouse designs and the level of automation.

Fulfilment

4. Start embracing data

When selling D2C (and on the right platform) you own the data from all of the consumer interactions whether that be sales, customer service or marketing. You quickly get an in-depth understanding of your customers and therefore, how better to serve them.

Therefore, the platform that you use will need to be able to integrate your product data and your customer data - for example, buyer behaviour by age group, gender, and geography; engagement by day of week or time of day. Most importantly, data management will be crucial for both your brand reputation and legal issues such as GDPR. You will only be able to reap the benefits of data control if you can make sense of it and interpret it at a high level.

5. Get your communications in order

Promoting your offering to the end-consumer requires a whole different approach compared to marketing to a retailer. You’ve got full control over how you build relationships with your customers and how you deliver value to them.

Luckily, you’ll have your data to fall back on. Be prepared to hire a customer support team, and be willing to teach them the keys to success. Also, spend time on FAQs and reviews to provide clarity and minimise consumer confusions.

Control of customer support, being responsive, answering questions in a timely fashion and building trust amidst all the uncertainty enabled these brands to maintain their relationships throughout the pandemic. This customer nurturing leads to brand loyalty.  A recent study found that 59% of consumers prefer to do research directly on the manufacturer’s website, with 55% preferring to make purchases the same way.

Communication

From there…

If these initial steps are achievable for you, it’s time to strategise. As we said, dipping your toe in D2C doesn’t mean you need to abandon your current sales channels completely - rather, think of it as adding another string to your sales bow. Following this, you will need to conduct your market research, select a suitable platform or make the necessary changes to your current solution and begin testing. In our latest guide, A step-by-step guide for trialling a D2C eCommerce strategy we discuss the benefits, challenges of doing so - and our experts talk you through their process for a successful strategy roll out. It may take some organisation, but once put in place, a D2C strategy could play a major role in increasing the longevity of your brand, maintaining a glowing reputation and improving relationships with your current and potential customers. If the idea has piqued your interest, please download our free eBook here.

By Lauren Cassidy, Content Marketer at Kooomo

Published 08/02/2020

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