Traditionally, brands relied on a brick-and-mortar structure, where businesses were selling their products and services street-side and face to face with customers.
However, with the rise of digital commerce, we are seeing brands facing a need to shift focus and make strategic changes to the way they sell their products. Selling direct-to-consumer is a practical way of leveraging an existing customer base.
What is Direct-to-Customer?
Direct-to-customer (D2C) refers to brands or manufacturers selling their products directly to a consumer. This method of selling omits third-party retailers, wholesalers, or middlemen and usually takes sales through a website or an app. Selling D2C is for brands that are providing products directly to the end-user (B2C).
D2C has had an adverse effect on legacy brands whose traditional selling channel is a physical store. However, with the current economic decline or even closure of well-known department stores in recent years, notably, House of Fraser and British Home Stores, businesses need to shift their focus and strategy to explore this alternative selling option.
Advantages of Direct-to-Customer
Get to know your customers – Selling D2C allows businesses to collect valuable customer insights e.g purchase interests, behaviours, desires, and preferences, which can help to develop strong relationships between your brand and your customers.
Maintain brand clarity – D2C keeps the brand’s visual identity clear, concise and controlled. Selling amongst thousands of merchants on marketplaces can cause your important brand messaging to become diluted and missed. The user experience matches the brand ethos, giving the customer a smoother and more enjoyable purchasing journey.
Skip the middleman – It is also easier for the manufacturers to test products to see if changes need to be made. Essentially, you are cutting out correspondence with third-parties, which means decisions can be made more instantly. Pricing adjustments can also be made based on immediate customer reactions and feedback.
Products get to market faster – Brands can access selling opportunities instantaneously, meaning they can identify the perfect opportunity to launch campaigns and promotions.
Improved Margins – Higher quality items at a lower price. Less reliance on third parties and end-to-end control of your brand and products helps improve sales margins.
Better customer data – Data is better quality allowing you to acquire valuable customer insights, and more importantly, YOU own the data. You won’t have to worry about third-party seller suddenly pulling the plug on your line of products.
Bigger responsibility – The supply chain can become more complex and challenging to manage. Business operations will need to be seamless when you are responsible for the entire selling and fulfillment process. Any issues you encounter could cause disruptions to your entire business, leaving you in a vulnerable position.
Sale inconsistencies – Businesses may encounter peaks and troughs in sales, including varying seasonal demand, and would need to have processes in place to ensure this causes minimal disruption to the business.
Marketing – How are you going to market your products to your customers? Do you have a social media presence where you can gain exposure to potential customers? The way you communicate with your customers is really important as you want them to value your brand and become loyal repeat purchasers.
Product strategy – Do you know which items you wish to sell to your customers? Do you have an exclusive product range? Have you defined your pricing structure? Somehow, all the information about the products your brand offers needs to be managed efficiently so that your site is not a chaotic mess of SKUs! Using a PIM system to organise your product data should definitely be considered for brands with a large number of products which have detailed attributes.
At 5874 Commerce, we have helped many brands get set up with D2C selling. Check out our case studies if you want more information, or give us a call on 0121 369 5874 to speak to one of our eCommerce experts.