How to get started with Direct to Consumer selling
Direct-to-consumer selling is one of the most important trends seen in e-commerce in the last decade. Brands are becoming digitally native and entering the market directly – and the opportunity is getting bigger thanks to changing consumer trends in a post pandemic world. Studies show that brands going D2C experience over 88% growth in sales and 55% of consumers today prefer to buy directly from brands instead of multi brand retailers.
When an ecommerce giant like Amazon gradually builds out its own-branded line of 80+ private-label brands products, it signals a massive shift towards a direct-to-consumer approach.
So what does it mean for a brand to be adopting D2C selling? It means the brand breaking away from the constraints of traditional business models and catering to their target customers in order to control the entire brand experience and selling channel. The D2C movement involves utilizing internet supply chains and manufacturing innovations to build their own products and brands, and traditional brands bypassing traditional retail chains to take their popular brands direct to the end consumer.
D2C companies are strengthening customers relationships by developing their own sites or social media, but a very large proportion are also selling through marketplaces. But competing against e-retail behemoths like Amazon and Flipkart needs a sophisticated approach to brand marketing, distribution and fulfillment and needs brands to take full control and ownership of the end-to-end customer experience.
Let’s look at five important strategies to consider for brands ready to adopt direct to consumer selling:
Prepare a D2C specific plan and work out your distribution partner strategy
Brands needs to develop a clear rationale for moving to D2C selling and a clear vision of how to do that. Invest in training employees, developing D2C specific processes, and ensuring that the business is able to operate under the D2C model. Selling D2C also means competing with your current retail and wholesale partners so brands will need to figure out ways that partners can still win in the new model.
Invest in Omnichannel Retailing Capability
Use cutting-edge ecommerce technology to balance out both marketplace and website selling in a hybrid business model, with a clear vision of driving sales from marketplaces and enhancing brand positioning through the website. Build an omnichannel retail strategy to service customers from wherever they shop from, instead of restricting the brand to only digital or physical sales channel.
For example, FMCG brand Nespresso has seen huge success with the DTC channel, selling its coffee capsules on their own website, and also through their partnership with Amazon and its brick and mortar stores.
Utilize Fulfilment Companies
Going direct-to-consumer involves several jobs-to-be-done and solutions to be enabled and technology is an important part of the model. Selling D2C requires logistics, storage, and fulfillment capabilities and D2C retailers need to integrate their distributors on a single platform and enable doorstep delivery through logistics providers and “hyper-local” partners. D2C sellers need to have in place visibility of inventory & sales in real-time across multi-locations and warehouses. It will also need to have ready integrations with digital payment options that can enable you to receive payments digitally. Partnering with a delivery network provides options to buy from different brands will see a significant growth.
Create a differentiated brand marketing strategy
D2C is growing because traditional retailing and advertising are failing the consumer. D2C sellers will want to do something different in terms of the marketing strategies, and the channels to implement them. Some examples of great D2C tactics are brands who develop subscription-based models, create affordable products and run loyalty and discount programs. Brands can control the brand reputation with tactics ranging from building user communities to using influencers on social media, to creating virtual and interactive brand experiences or a content first approach to address customer pain points.
Nestle had great success when it launched a DTC website called the KitKat Chocolatory, so consumers could buy luxury versions of the popular chocolate brand directly from their website.
Deliver on end-to-end customer experience
Customer experience will soon overtake price and product as the key factor that differentiates your brand from another. It is important for D2C brands to maintain strong customer relationships throughout the customer journey, this includes after sales service for consumer maker brands. Design and optimize your website with a focus on facilitating simpler and smoother access to products and customer services.
Direct 2 Consumer selling is here to stay: brands and sellers are ready to invest in technology that would help them reach their customers and maintain control over the shopping and brand experience. Vinculum’s flagship product Vin eRetail built on the cloud provides an ideal solution with ready integrations with all major and hyperlocal marketplaces, which equips brands with one central system for managing the entire e-commerce supply chain.
Subscribe to our blog and stay updated!