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12 Questions to Ponder Over Before Venturing into The Direct to Consumer (DTC) Strategy


August 27, 2021
6 MIN READ
Vinculum
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Customer satisfaction has always been a key objective for businesses since time immemorial. Businesses have strived to put their best foot forward for customer acquisition, management, and retention with a host of time-tested strategies. Staying on the top of the minds of customers has become even more imperative in today’s context given the rise in competition, customers being tech-savvy, and their ever-evolving buying behavior. Today’s customers are looking for omnichannel, personalized, and consistent brand experiences. And, brands and businesses across the globe have realized the significance of staying perpetually connected to their customers. Among the plethora of customer-centric branding, marketing, and promotion strategies, Direct to Consumer (DTC) sales and marketing strategy seems the best bet for businesses, lately. Wondering why? Well, keep reading!

Customer-centric marketing and sales approaches are not something in their nascent stages. They have always been there, evolved with the time to keep the businesses at the forefront. However, the conventional marketing, sales, and lead generation efforts most of the time involved middlemen or intermediary platforms. However, with the DTC strategy, and approach, businesses stand to gain direct access to their target customers without any middlemen in the background, understand customer expectations with more clarity, and anticipate their future needs. This allows businesses to reshape their strategies to identify new product development opportunities, supplement existing campaigns or come up with new remarketing avenues. It is evident that DTC has its own perks for businesses from a 360-degree standpoint. However, to make the most of DTC, and unleash its true potential, businesses have to move ahead carefully after considering all the vital aspects and implications.

Here are the top 12 questions that businesses must ponder over before making their foray into a full-fledged DTC approach.

Cost Efficiency – On-premise vs SaaS Platforms

Getting direct access to consumers and veering the execution in accordance with the business expectation might need a more strategic thought process, and planning. And brands have to stay cost-conscious and identify whether investing in on-premise solutions or a SaaS solution will be their best bet. On-premise solutions need significant upfront infrastructure investments, ongoing hosting and maintenance expenses, and a dedicated technical workforce to manage the day-to-day operations. On the other hand, SaaS platforms come with low-cost ownership, payment card industry (PCI) compliance, security, and content delivery networks (CDNs). SaaS platforms play a pivotal role in saving recurring costs, which Direct to Consumer brands can divert for more strategic initiatives as well as sharpening their core competencies.

Is New Hiring In The Horizon?

Expanding the existing workforce may seem like a routine HR functionality, but it has significant implications for the business. Businesses with skilled in-house teams of tech-savvy professionals may rest their worries of new hiring while venturing into the DTC strategy. Collaborating with third-party design and development agencies could be the next logical decision. Establishing a dedicated team for managing the DTC strategy might have cost, productivity, and efficiency-related repercussions.

How to scale the DTC strategy in the fastest and most efficient manner?

A commerce platform with a global dual content distribution network (CDN) for speed, flexibility, and functionality, with multi-currency shopping, which seamlessly integrates with international warehouses and fulfillment solutions is the sure-shot way of scaling the DTC strategy globally.

What’s the cost-efficient way to deliver an Amazon-like experience?

Businesses eyeing to garner Amazon-like customer experiences must invest in commerce platforms that are geared towards offering personalized product recommendations as well as predictive functionalities.

Is there an additional capacity cost involved while scaling the DTC strategy?

As we have already mentioned earlier, the DTC strategy has multiple implications, and a recurring cost component is one of the key ones. However, businesses leveraging a SaaS-enabled commerce platform for their DTC strategy and execution may rest their worries about additional costs. SaaS platforms are crafted to offer predictable cost structures to enable businesses inaccurate forecasting, budgeting, and planning.

Can businesses leverage customized check-out?

Check-out is most probably the key stage in the consumer buying paradigm, and it tends to hold all the answers for businesses to rehash their conversion ratios. SaaS eCommerce platforms come equipped with inherent customized check-out functionality. So, now as a business, you know where to focus on.

Bulk distribution to retailers vs last-mile delivery to consumers, which is effective?

When businesses make up their mind to go DTC, last-mile delivery is a must, which will incur substantial investments. Businesses with their own fulfillment constraints must partner with third-party fulfillment centers or 3PL companies to arrive at a win-win scenario.

Can end-to-end fulfillment be leveraged on eCommerce platforms?

Yes, considering the wide-scale demand, most key eCommerce platforms are now gearing up to offer a geographically dispersed network of fulfillment centers with smart inventory-allocation technology, predict the best places to store and ship products, and expedite order fulfillment in an easy, quick, and hassle-free manner.

What sort of packaging should businesses vye to achieve?

When it comes to DTC, brands need to ensure last-mile delivery. And, when the product is fragile or perishable or is prone to damage, individualized packaging is a must. With the ultimate aim to drive excellent customer experience, businesses must offer their customers great unwrapping experiences, which speak of the brand in not so many words.

Is free shipping a must?

Well, free shipping tends definitely to be an added advantage for end consumers, however, it’s not a must. While free shipping thresholds can be experimented with, businesses need to solely focus on accelerating their order fulfillment.

Is there a way to streamline the product returns?

Returns, exchanges, or cancellations are definite parts of the order fulfillment paradigm. However, businesses can leverage actionable insights to identify the scope and volume of returns, exclude the set of customers from future remarketing or retargeting strategies, and collaborate with 3PL companies or other fulfillment partners to optimize the returns process.

Is DTC worth it to spoil age-old brand-retailer relationships?

Changes demand sacrifices. Brands eyeing to venture into the DTC sphere have to cut their ties with retailers, wholesalers, and other middlemen. However, it need not be a drastic endeavor. They can still figure out how the existing relationships with the retailers can be salvaged and tweaked to accommodate the new DTC strategy.

DTC definitely evokes a lot of curious questions from the brand and business standpoints. Let’s stay tuned for more of such crucial information!

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