Consumer product manufacturers invest a lot of resources and spend a vast amount of money to establish a brand. The process starts with the design, developing prototypes, testing, production, and eventually marketing, as well as the distribution of products. However, manufacturers are very much limited in accessing the consumers directly in the traditional landscape of the retail business.
Historically, the distribution of products was made on business to business basis (B2B). The products were further sold to the end-users by the distributors through dealers and retailers. But such methods had impacted the profit margins of manufacturers adversely, and higher cost to customers due to the presence of a middle man that led to the emergence of the D2C concept.
A Brief About Direct to Consumer Concept
Direct to Consumers (D2C) strategy enables manufacturers of consumer products to bypass the conventional product distribution channels like wholesalers and retailers. It allows the brands to go to the customers directly by taking full control of product distribution for selling the products. D2C model helps manufacturers to recover lost revenues due to a decline in channels for retail sales.
Such a strategy also helps to improve the gross profit margin as a larger proportion of the earlier share of distributed margin could now be retained. From sales as well as profit perspective, the D2C strategy is applicable for the majority of the brands in recent times. However, for the successful implementation of the strategy, the systems and the operations of a company should be ready.
Further, a company should also prepare the customers, partners as well as the employees before launching the D2C journey. It is highly important to make your infrastructure ready to support the implementation of the D2C strategy. The benefits of the D2C strategy as well as the ways to implement the strategy successfully are discussed below to have a fair understanding.
Key Benefits of D2C Strategy
The key benefits of D2C strategy for customers as well for customers are as follows:
- Better Brand Experience: The end-to-end distribution system enables manufacturing companies to deliver the best brand experience.
- Good Customer Experience: Consumers of today look for a better shopping experience and prefer those brands that can exceed customer expectations.
- Direct Relations with Customers: For having success in the D2C strategy, companies start direct interaction with customers to serve them better. Such a strategy helps companies to have direct access to the consumers that helps to launch promotions, new products successfully.
- Realizing Brand Vision: When every aspect of a brand is managed by the manufacturing company, the original vision of the brand can be realized.
- Increase of Sales and Better Margin: A lot of retailers in the market are failing that is posing a great challenge to the brands. With a D2C strategy, brands have the opportunity to gain control of lost sales, and with the right selling, tactics can increase sales. Further, with the implementation of direct selling strategies, there can be saving due to bypassing the wholesale distribution as well as retailers.
- Immediate Access to Market: Brands can also have immediate access to any selling opportunity for promotions, new products, and trials. Further, a brand can act immediately on customer feedback to improve thequality of products.
Consideration to Make for D2C Strategy Implementation
Direct to Customer marketing strategy is a dynamic field, and new trends, as well as strategies, are emerging rapidly. However, there are certain time-tested, true, and tried strategies that can be very effective to improve DTC sales.
- Analyze the existing market trends: Before entering the D2C market, and creating a D2C brand, you need to have a clear reason for your entering into the market. Examine the prevailing conditions of the current market and confirm whether there is any scope for the D2C business. If any business model is existing, verify whether there is any scope for improvement in the product pricing.
- Simplicity is the key: Successful D2C brands have always tried to supply products with a simple design. Demystifying the complexity of an existing product in the market, and offering a simple solution for the end-users can be important to make the D2C campaign successful.
- Offer products that solve customer problems: Apart from offering affordable products, you should focus on offering products that solve the pain points of the customers. You can easily win a lot of customers if you can send the right brand message of solving the pain points of customers.
- Collect data and make the best use: Since you are launching the D2C brand, you need to collect a lot of data about your consumers and understand the need thoroughly before launching any product. Data collected as per buyer behavior, age group, geography, gender, etc. all can help to offer relevant products that can meet the consumer needs perfectly.
- Produce creative and high-quality content: When you gather sufficient understanding about your target audience, as well as purchasing habits, you can make your brand more attractive with the publication of quality content. Such content can include blogs, videos, social posts, creative advertisements, etc. that can speak effectively with the audience.
- Implement the right CRM: CRM or customer management software can be very helpful to manage interaction with the current as well as prospective customers. Look for the right CRM that can suit your business needs and help to maximize your brand’s capabilities.
- Establish your brand identity: There are a lot of channels existing that can help you to reach the customers easily if you can develop a consistent and strong brand identity.
- Subscription retail models: Subscription models are strongly favored by the millennium, and it allows customers to purchase services and products without having any hassle for a repeat order. With the implementation of such a model, the rate of customer retention can be higher than the conventional retail models.
- Adopt a free easy return policy: Free return policy can be excellent to boost consumer confidence and provide reassurance to the buyers to make a repeat purchase from a brand.
- Use the popularity of celebrity influencers: Many companies started on a low key but became highly successful by using celebrity influencers. You can use the popularity of celebrities on social media platforms as also leverage the connections of celebrities to promote your brand.
- Use incentive scheme for your customers: Another very effective way to promote D2C brands is to incentivize the customers who can spread good recommendations about your business.
- Use social media to your marketing advantage: Social media is a very powerful tool that made many retail businesses successful, and you too can use it in different ways to establish your D2C campaign.
- Produce viral campaigns: The power of the internet can be fully leveraged in the D2C campaign in several ways that is a clear advantage over retail businesses. Apart from sharing powerful content, you can create creative ads or videos to reach your audience easily.
- The personalized shopping experience for buyers: The online buyers are frequently demanding personalized shopping experience, and many successful D2C brands are already implementing such a strategy. There are many ways to personalize the shopping experience of the buyers like special offers for products that customers purchased already, or quizzes related to personalized products, etc.
- Make use of the micro-influencers: In case you find it difficult to afford using celebrity influencers, you can easily use micro-influencers related to your niche with good effect. The strong community that is available on social media platforms like Instagram or Facebook, etc. can help you to promote your brand successfully.
- Email- the old fashion technique can be a powerful strategy: Even though social media is a very popular modern trend, email remains a very powerful way to reach consumers for marketers. You can get a very good result with the use of an email campaign by sending the emails to the potential customers available in your database.
- Utilize the power of offline marketing: Though e-commerce has helped to the success of the D2C model, the traditional way of offline marketing remains a very effective strategy to promote the D2C campaign.
- Provide virtualize experience: Virtualized experience can easily disrupt the conventional trend and can make your D2C campaign immensely successful. You can try to develop a suitable app for augmented reality that can impress your customers a lot.
- Provide proper operational support: D2C operation requirement is not the same as B2C as such a strategy may involve the dispatch of a single item. Right from having the right warehouse layout, strengthening dispatch and return operations, training the operation staff, formulating the systems, and many more, you need to focus on the proper performance of your D2C strategy.
- Make use of fulfillment companies: Though you may have to incur a high capital cost to implement such a strategy, you can gain access to the established logistics of fulfillment companies like Amazon, to your advantage. Further, since the established fulfillment companies have a large customer base, utilizing the platform of such companies can help your brand to get excellent exposure.
- Customer Service- the most crucial aspect of D2C success: D2C brand needs to have a relentless focus on providing quality customer service to make the brand successful. A few key ways to improve customer service is to provide product/customer/payment/delivery FAQs, contact details, knowledgeable and amicable customer support staff, and 24 hours customer support.