Seizing the Direct to Consumer eCommerce Trend
23/11/2021 | Article
By Marcos Cipriani, Head of Business Development Iberia.
Today, more than 80% of end consumers are expected to make at least one purchase through a DTC ecommerce model, more than 50% search online for a product or brand and 44% believe they will find a higher quality product at a lower price when shopping DTC in comparison to traditional market, according to a 2021 US Direct-to-Consumer Purchase Intent Index.
Source: Global Report – Q4 Update – Hootsuite
Also, the Direct to Consumer market has grown (from 2020 to 2021) and is expected to keep growing around 15% yearly, at least until 2023.
Source: US Direct-to-Consumer Ecommerce Sales 2017-2021 – eMarketer
Based on the above, there are many reasons why companies and manufacturers want (and should) sell their products and services directly to consumers.
When selling directly, the company guarantees the ownership of the customer relationship.
It’s easier to listen to clients and have control over the end-to-end customer journey and lifecycle.
Through a DTC business model, manufacturers have access to all the shopping data from ecommerce and the ability to segment and create exclusive offers, increasing revenue and average tickets.
Also, by going Direct to Consumer industries are also able to test new products, offer their full range of products and most of the time increase profitability by removing the intermediaries costs.
In summary, having a direct relationship with customers is an effective way to have more products available, with faster and cheaper shipping, while providing the market better prices, promotions and convenience.
However, deploying a DTC/B2B2C business strategy may be very challenging, whether your company is a start-up born in a DTC model, web-only retail or if you have always relied on intermediaries and are now trying to rethink your strategy.
Below, we share with you some advice about how you can take advantage, communicate effectively and perform better in a direct to consumer eCommerce business model.
Omnichannel is Essential
First and foremost, if you are eager to develop a successful DTC model, an Omnichannel strategy must be your base to empower your brand.
You must guarantee that you are able to reach your client at every touchpoint of the purchasing journey to provide a consistent experience across all channels (on and offline).
In order to achieve the best experience through every channel, it’s also important to be clear and have a transparent relationship, regulations and boundaries set with your B2B partners or resellers.
Having a clear communication strategy allows you to tailor messages across different channels, reducing the risk of miscommunication with the market. In fact, customers are more willing to switch to brands that offer complete transparency.
Rely on CRM
Once you acquire new customers, it is crucial to retain them.
According to Adobe, returning customers are worth 5x more than one-time shoppers and repeating customers are worth 9x more than one-time shoppers, so make sure you have the capacity to read, understand and correctly profile your user databases.
Having a good understanding of the segmentation of your customer base allows you to create the right message to the right people at the right time, increasing ROI. A tiered message is a magnificent way to generate loyalty.
Within all the CRM possibilities, have in mind that email marketing is one of the most respected networks with an impressive ROI, as it’s the only channel that belongs 100% to you.
Use SMS, Push Notifications or any Chat or Communication App to keep conversations always open with your customers.
Also, take advantage of your CRM process to increase revenue and average ticket by creating upselling and cross-selling offers. In addition, you will be complementing your clients experience in a click.
Data is the Key
At Cadastra we say that having a lot of data is a good problem, and converting into information is an opportunity. Therefore, we add knowledge and execute actions to generate results and capture value.
Sounds obvious and many companies think they’re collecting it right, but the truth is that most of the time there are blind spots in your customer data.
When you are the owner of the channel, having a very well structured data architecture will help you understand your client behavior, facilitating the journey from awareness to the conversion stage.
Accurate data allows you to understand your customers fears and doubts in the purchasing process, so you can help them find comfort and confidence in your brand.
Your data also shows you how to optimise your marketing efforts, focusing your strategy on the most effective tactics. Allows faster decision-making and better insights.
It’s the data you collect that will allow you to personalise your communication and segment your audience to create the most relevant experience to your clients.
Digital Marketing and Performance
Once you have your business channels and logistics infrastructure up and running, your data architecture well implemented and the control of the information ready to put you in constant contact with your audience, it’s time to boost sales.
In order to generate traffic to your sales channels, keep in mind that besides email marketing, even if the ownership of the data is not 100% yours, social networking is also one of the most effective channels to reach and interact with your customers.
Social networking provides the ability to listen and engage with your customers, as it allows you to increase awareness, humanize and manifest values. Also, generate leads, boost sales, retarget and create relationships with partners, influencers or even competitors.
Everything starts with a search, that’s why at Cadastra we name Search EXPERIENCE Optimisation.
SEO is a mid-long term result strategy that will build the presence of your brand in the search results, therefore, you must commit to it right from the beginning.
Implementing a content strategy based on a solid keyword strategy and optimising your platform with the best SEO tech practices, should deliver results.
Do not underestimate the importance of good quality content as part of the plan to generate results. A well written and consistent post will offer SEO advantages for a very long time, since people will engage, identify and create a relationship with your brand.
The last piece of the puzzle, but not less important, is Digital Media. When creating a media advertising strategy, we highly recommend you to check your destination pages and content, and if it is well related to what the audience should expect from your campaign.
Make sure you explore every channel, especially those offered by Google and Facebook. Also make sure to split A/B tests for your ads in order to optimise your budget.
In case of specific products, such as premium, new release, something innovative or even something that needs specific attention, we also recommend the use of a Landing Page.
Many times companies send their ad traffic to their homepage, collection pages, or general product pages. If you have a well optimised and designed Landing Pages you will have a higher probability to deliver a better experience, which should generate higher conversion rate and reduce your CAC.
Putting in place a Direct to Consumer business model generally is an outcrop rock effect. You are able to see the tip, but you must be aware of everything that is underneath.
Sometimes, doing it all by yourself is just hard-boiled, so make sure you choose expert partners that can help navigate through the challenges and grow opportunities.
If you need help on any of the above, please speak to the team here at Cadastra, we would love to help.