“How to become more profitable?” – This is a common question for businesses of all sizes across the world. In the age of digital retail, many e-commerce brands have taken a leap of faith in order to do something unconventional. The direct-to-Customer e-commerce business model is one such feat. Be it Everlance for women’s apparel, Dollar Shave Club for men’s grooming, or Away for luggage products, the D2C model has returned its fair share of growth to the brands ‘that dared.’
Brands are constantly engaged in making their products even better, cut overhead costs, and eliminate middle-men to enhance their margins. Direct-to-Customer e-commerce gives them these opportunities.
Are you operating an e-commerce brand? Let us see why you should consider moving to D2C e-commerce business!
What is D2C E-Commerce Anyway?
To realize the potential of the ‘Direct-to-customer’ model for any given brand, one must understand what D2C actually is. D2C e-commerce is when a manufacturer/producer/designer sells its products directly to the customer via their own web store. Unlike the traditional retail model, where the product goes through the manufacturer-wholesaler-distributor-retailer-customer chain, D2C model has no middle-men. This implies a much better margin for the seller and a much lower price for the customers.
Demand for D2C Businesses
The Global Brand Shopper Survey revealed that 55 percent of the customers prefer to shop directly with the product manufacturers/parent brand over retailers. Of these, 37 percent of the respondents indicated that a more engaging experience on the manufacturer/parent brand’s website is a must, in addition to better pricing than the retailers.
Benefits of D2C E-Commerce Model for Your Brand
The direct-to-customer e-commerce model has its own advantages over the traditional retail model. Some of these benefits are;
Ease of Creating Omnichannel Experience
Omnichannel marketing experience can result in a 250 percent higher purchase frequency by the acquired customers as opposed to single-channel marketing. Moreover, it observes 19 percent engagement rates as compared to 5.4 percent for the single-channel engagement. These numbers are good enough for any brand to ponder upon D2C implementation.
Manufacturing & producing brands have a significant advantage over traditional retailers in the context of ‘marketing channel experience control.’ While traditional retailers are limited to brick-and-mortar stores and umbrella marketplace brands (like Amazon), D2C businesses can get creative and make the best of this opportunity.
Omnichannel experience means providing consistent messaging, branding, and quality experience to the customers at all the brand touchpoints. Manufacturers can have end-to-end control of their production chain and communication channels. From packaging, labeling to website experience, they can differentiate their stance from conventional retailers with relative ease.
Better Customer Engagement & Mutual Communication
The traditional retail model does not allow manufacturers to directly interact with their target audience and collect their feedback to optimize their products & processes. However, with D2C e-commerce, manufacturers can interact 1:1 with their customers. Instead of shuffling through siloed data from the retailers’ backend, a D2C brand can identify its customers’ needs through insightful communication.
Higher Loyalty Affinity
Customers buying from D2C brands tend to be more loyal and profitable than traditional retailers. There are two key reasons for this – 1) D2C brands have better control over their customer experience, 2) D2C brands have better control over their reputation. Customer loyalty is directly related to their experience and perception of the brand. With lesser clutter and a simplified supply-demand chain, D2C e-commerce brands can build a much stronger customer base if they aim for it.
Better Up-sell & Cross-sell Opportunities
Pushing more sales is the ultimate goal of every business. The D2C model gives this advantage to the brands. Businesses selling directly to customers via online portals can either make it their prime source of revenue or still supply to retailers and keep D2C as a separate revenue channel. In either case, the brand can choose to up-sell and cross-sell its products to increase its profits.
For instance, a manufacturer like Murphy Richards can sell air-conditioners directly to the customers via their website. At the same time, they can focus on bulk supplies to other appliance distributors if the time & resources allow them.
How to Implement the D2C Model for Your Brand?
Many manufacturers & production brands find the thought of implementing a D2C e-commerce channel overwhelming. However, a well-planned and carefully executed strategy can help them boost sales in no time.
The Answer to Implementing the D2C Digital Retail Model is Marketing Automation.
Let us suppose you are planning to take your manufacturing brand online to reach out to more customers. The first step would be to design an intuitive and engaging e-commerce site. Once this is achieved and you are ready to sell online, the next step will be acquiring and retaining loyal customers. For this job, an AI-driven marketing automation tool like Wigzo will be highly effective.
A tool like Wigzo will automate your messaging, campaigns, email marketing, SMS communication, and push notifications to capture top-level leads and prospects. As your sales funnel matures, Wigzo can be customized to send hyper-personalized communication to your customers as per the set events & triggers (like opening an email, visiting a product of interest, etc.). Moreover, automation will help you build initial sales traction by pushing online sales and reducing cart abandonment rate – it will also scale as you grow. Over time, you can visit the dashboard analytics to get in-depth insights about your customers’ behavior and needs to forecast sales & inventory.
In a nutshell, your brand will need an all-in-one solution to optimize the customer journey (from acquisition-retention to upselling) when first transitioning to D2C. Your marketing automation solution must also be able to scale as you grow.
D2C can be a big transitional step for any manufacturer/production brand. Though, with the right online retail strategy, optimized customer-acquisition costs, and retention plan, this game can be cracked. If you’re wondering how things will playout for your business with the D2C model, you can schedule a FREE demo for Wigzo and judge its capabilities.
Happy selling, happy growing!