With rapid changes in consumer behaviour, brands are jumping on the D2C eCommerce bandwagon with a never-before sense of urgency. Before embarking on this journey, brands should answer some critical questions and determine their strategy, before investing in tech. "If you build it, he will come" is as much a fallacy for brands as is for startups.
There are many reasons for brands to invest in their D2C eCommerce channel. Not all apply equally for every brand. Before venturing into establishing a D2C Channel, brands should clearly identify the specific objectives they would like to accomplish.
The D2C channel requires brands to operate differently with respect to packaging and deliveries.
For sales through retail & distributor networks, products have been traditionally transported in larger quantities (through own/leased commercial trucks) and in bulk packaging (typically boxes, cartons etc.) to distributors and retailers. The D2C eCommerce channel handling of consumers orders in smaller quantities (typically a few retail packs, of multiple different products).
For many brands, this may require significant effort in reworking retail packaging. The packaging has to be robust enough for shipment through courier services like FedEx, DHL and through local, last-mile delivery services. Some brands look at this as an opportunity to bring out a D2C centric packaging that can be a real unboxing experience for the consumer.
Brands also need to realise that the delivery experience given to the end consumer on their D2C channel also contributes significantly to the brand experience. This is quite unlike the traditional bulk transportation for distributor and retailer orders. A D2C juice brand includes a handwritten note by its founder with every delivery specifically addressing each customer by their name.
To stay ahead of competitors, brands need to think beyond omnichannel packaging when incorporating a D2C strategy.
For a profitable D2C business, the Customer Lifetime Value (CLV) should be at least a few multiples (2 to 5 times) of the Customer Acquisition Cost (CAC). For some brands, the CLV is the value of a single purchase (e.g. a sofa) For some others, the CLV is the value of repeated purchases of multiple different products (e.g. cosmetics, health foods etc.).
The CAC in D2C eCommerce is typically higher compared to retail channels. Brands need to figure out the right strategies to achieve significant CLV; prior to scaling up D2C marketing.
Investing in the consumer journey, from product discovery to unboxing, is key to retaining consumers and building up CLV. The brand website (and apps) play a very important role in building a strong, direct consumer relationship.
Not surprisingly, brands that create wow experiences on their D2C eCommerce website on product experience pages, on reorders and have a simple checkout process have significantly high consumer retention. Keeping Product FAQs & usage tips up-to-date and including lots of valuable content (just like we do here in this article) are simple but effective ways of keeping your consumers engaged on your website and apps.
In today's world of DIY SaaS-driven eCommerce (there are platforms that claim to be hosting more than a million merchants), major brands need to ensure that the eCommerce platform they roll out reflects their brand equity.
It's essential for major brands to carefully select the technology for their D2C channel. With the proliferation of DIY SaaS-driven eCommerce platforms, it's crucial to choose a technology that aligns with the brand's identity and objectives.
Selecting the right D2C eCommerce platform is a critical decision that will have a profound impact on your brand's success in the direct-to-consumer arena. Here are some key considerations to keep in mind:
You should opt for a platform that can grow with your brand. As your D2C channel expands, your platform should be able to handle increased traffic, more products, and evolving customer needs. Scalability is crucial to accommodate your brand's growth without the need for frequent platform changes.
Your brand is unique, and your D2C platform should reflect that. Look for a platform that offers a high degree of customization, allowing you to tailor the user experience to match your brand's identity and customer expectations.
Your D2C platform should be user-friendly not only for your customers but also for your team. An intuitive interface makes it easier for your staff to manage the platform, update content, and analyze performance metrics.
Security is paramount in the world of eCommerce. Your platform should adhere to the highest security standards to protect customer data and transactions. It's also crucial to ensure that the platform complies with data protection regulations in your target markets.
Your D2C platform should seamlessly integrate with other tools and systems you use, such as customer relationship management (CRM) software, inventory management systems, and analytics platforms. Integration streamlines operations and provides valuable insights.
In today's mobile-centric world, your D2C platform must be responsive and mobile-friendly. A large portion of your customers will access your site via mobile devices, and a poor mobile experience can drive potential customers away.
Data is the lifeblood of eCommerce. Your platform should offer robust analytics and reporting capabilities to help you track key performance indicators, understand customer behavior, and make data-driven decisions.
Your platform should support a wide range of payment methods and shipping options to cater to diverse customer preferences. A flexible approach to payments and shipping can attract and retain more customers.
The ability to manage and update content easily is crucial for keeping your website fresh and engaging. Your platform should have user-friendly content management tools.
To make informed decisions and tailor your D2C strategy effectively, you need to leverage data and customer insights. Here's how you can do that:
Collecting the right data is the first step. This includes not only customer data but also website traffic data, sales data, and user behavior data. Ensure that your platform has the capability to gather and store this information securely.
Once you have the data, you need tools to analyze it effectively. Look for platforms that provide built-in analytics or easy integration with third-party analytics tools.
Segmenting your customers based on demographics, behavior, and preferences allows you to target them with personalized marketing and product recommendations.
Automation tools can streamline your marketing efforts. Consider platforms that offer email marketing automation, chatbots, and personalized product recommendations.
To optimize your website and marketing campaigns, you should be able to conduct A/B tests easily. This involves testing different elements to determine which performs better.
Excellent customer support is a cornerstone of a successful D2C channel. Here's what you need to consider:
Customers expect to reach you through various channels, including live chat, email, phone, and social media. Your platform should facilitate multi-channel support.
Providing self-service options like a comprehensive FAQ section and knowledge base can help customers find answers to their questions quickly.
Your platform should support personalization, allowing you to address customers by name, recommend products based on their preferences, and tailor marketing messages.
Your D2C platform should facilitate marketing and promotion activities to attract and retain customers. Here are some key considerations:
Your website should be optimized for search engines to ensure it appears in relevant search results.
Your platform should have built-in email marketing capabilities, including list management, automated campaigns, and tracking.
Integration with social media platforms allows you to promote your products and engage with your audience where they spend their time.
Your platform should support the creation and management of discounts, coupons, and promotions.
Investing in technology for your D2C eCommerce channel is a strategic decision that requires careful consideration. The right platform, coupled with effective data management, customer support, and marketing strategies, can set you on the path to D2C success. By addressing these crucial aspects, you'll not only create a strong foundation for your D2C journey but also ensure that your brand stands out in the fast-paced and competitive digital marketplace.
Remember that your choice of technology should align with your brand's identity, goals, and customer expectations. It's an investment in the future of your brand, and the decisions you make today will influence your success in the dynamic world of D2C eCommerce.
So, before you embark on your D2C journey, take the time to answer these important questions and make informed choices about the technology that will drive your brand forward in the D2C space. Your success in the D2C realm starts with careful planning and the right technology.
What is D2C eCommerce, and how does it differ from traditional eCommerce?
Why should my brand consider investing in a D2C channel?
What technology is essential for a successful D2C eCommerce venture?
How can I choose the right D2C eCommerce platform for my brand?
What is Customer Lifetime Value (CLV), and why is it important in D2C eCommerce?
How can I leverage data and customer insights in my D2C strategy?
What role does customer support play in D2C eCommerce, and how can I enhance it?
What are some effective marketing and promotion strategies for D2C eCommerce?
How do I ensure my D2C technology investment aligns with my brand's identity and goals?
Is D2C eCommerce only suitable for well-established brands, or can startups benefit from it as well?