D2C brands need to focus on increasing sales by implementing better and lucrative strategies. Offering a personalized touch with enhanced customer value, D2C brands are surpassing competitors to lend an advantage to their esteemed customers.
Today we have a whole new generation of entrepreneurs who are using digital technology to create direct relationships with customers. These companies aren't just selling products; they're selling their brands, and they're doing it at scale, with reach and impact the traditional generation of e-commerce brands never dreamed of. As per estimates, by the end of 2021, the D2C model is set to increase e-commerce sales by 129 billion USD.
Let us explore the area of D2C in the e-commerce industry and what factors help D2C brands to boost their sales.
What is Direct-To-Consumer Retail?
D2C companies produce and deliver their products directly to the customers without needing the help of any intermediaries or traditional stores. This practice is a win-win situation for both customers and D2C companies as all over shipping costs for both parties get cheaper.
These companies get to sell products at lower costs in comparison to other similar niche traditional brands. Also, they get to have complete control over the manufacturing, advertising, and distribution process of products.
Unlike other conventional retail, D2C companies have the advantage of experimenting with different distribution models. They might switch between shipping models like delivering directly to the buyer, establishing pop-up shops, or collaborating with physical retail stores.
The best thing about D2C companies is that they don't need to depend on traditional retail marketing to get exposure. Most D2C company startups are competing with major retail businesses in the area of footwear, mattresses, razors, etc., by reshaping the entire retail market.
Direct-to-consumer brands at present can take inspiration from leading D2C companies that are surpassing their traditional retailer competitors. Some of them are Casper, Harry, LOLA, Dollar Shave Club, and so on. The way Casper earned revenue up to 100 million USD with its D2C strategy is worth learning.
8 factors that are crucial to increase sales in the D2C business model:
Once you set your business as a D2C company, you start to handle a lot more responsibilities in comparison to ones you had when working with traditional retailers. For example, you will be the sole host of the entire purchasing experience of your consumer base. However, it also allows you to have first-hand information on your consumers' data which is very valuable for any business.
With the increased responsibilities, you need to take care of a few factors that can help you to boost up sales in e-commerce. So let us explore some of them:
1. Aligning the brand with customers expectations
In direct-to-consumer sales, every aspect of the purchasing experience of your customers will influence how they perceive your brand. Hence, you will be responsible for providing detailed product education, seamless checkout, scheduled delivery, smooth exchange and return processes, and customer care service.
For this, you need to align your business on the following aspects:
To achieve these, you cannot depend on a single team or an individual. If you are investing in direct-to-consumer sales, then your business must have proper infrastructure of relevant departments. Make sure each of these departments deliver high-quality services to maintain the business objectives.
2. Adding more Value in service
The traditional retailers heavily invest in providing perks to customers like membership programs, free shipping, wish lists, free exchange, return click-and-collect, and so on. Hence, you must provide something more valuable to consumers that will compel them to buy directly from you instead of their preferred retailers.
You not only have to match the expectations of consumers but also offer them something unique that traditional retailers don't. For example, you can enable them to take part in some aspects of product configuration, including fragrance, colours, flavours, sizes, etc. Also, you can offer your products at better rates or give customers valuable information about your products.
3. Shifting the mindset
Once you remove traditional retailers from the purchasing experience of your customers, you need to do the job of the retailer by yourself. Now that you are in charge of order fulfilment and facilitating transactions, focus on thinking about how you can enable the best possible experience and smooth out every step of the buying journey of customers.
The product pages on your website should not only display and educate customers about your products but also match the level of expectations of customers to drive more sales.
As product pages is where customers make a decision to either buy or move ahead to the next website, you need to make sure that they are getting a personalized experience while visiting your page. In fact, offering personalized recommendations can draw people towards the products that they feel are most relevant to their needs.
For this, you can use commerce experience platforms like Glood.AI that help you in personalizing every stage of your customer journey on your e-commerce store.
This way, you can make your customers happy and satisfied once they leave your site after placing an order. Also, around 55% of global buyers already like to purchase products from D2C brands in place of third-party retailers.
4. Arranging resources
Establishing a D2C model requires you to invest in essential tools that are important for increasing brand sales. Some of them are:
Depending on the scalability of your direct-to-consumer operations, you might also need to set up multiple warehousing for your inventory management.
5. Bringing expertise in D2C departments
Businesses that utilize the D2C model are probably going to make a few mistakes now and then. Hence, it is better to have a well-planned strategy on hand. It will require you to enhance the functionality of your D2C departments that look after business development, order fulfilment, customer retention and acquisition, content creation and distribution for the brand, and so on. For this, you should hire experts for creating comprehensive profit and loss statements regarding your D2C business.
6. Updating strategy
For any kind of business model, following steps as per a well-planned strategy can drive success faster. When the department of business does its job perfectly, the entire business structure looks impressive.
However, if even one department fails to do its job, it will reflect on your brand reputation. For example, mishandling of transactions, deliveries, exchange or return, or any other aspect of consumer experience can result in negative reviews by buyers. Even if your product is of high quality, potential customers might not engage with your brand by looking at such reviews.
Therefore you should keep updating your business strategy for each touchpoint your customers experience with your brand. To achieve this, make sure you are aware of what your consumer base expects, wants, and needs at every step when they research your products and decide to buy them.
7. Leveraging partnership
The majority of challenges that businesses face in their D2C models can be solved with the help of partner agencies, tools, and platforms available in the industry.
For example, there are many tools that automatically set prices on your SKUs, let customers calculate shipping prices, allow businesses to provide parcel tracking systems to customers, and so on. Hence, partnering with platforms, brands can efficiently enhance their ability to work side by side with traditional retailers.
Take an example of the fashion industry which is ideally using D2C models alongside their regular e-marketplace by allowing customers to choose their frontend store. The industry is known to dominate the D2C space in terms of success and will be earning revenue of 43.2 billion USD by 2025.
8. Assessment and Measurement of outcomes
Measurement is an essential aspect of streamlining success. In order to increase Shopify sales with your D2C model, you need to continuously test how various tools, modifications, etc., are impacting conversion rates, buyer satisfaction, and pricing.
You should be able to tell if you are actually getting high returns with your D2C model or you are only reducing your reliance on the traditional retailing market. Also, you need to assess what sales percentage you require to match your investments and efforts put into this model.
On the one hand, while direct-to-consumer proves to be an incredibly beneficial sales model for specific brands; others might fail their entire business system with it. Therefore brands must do a thorough analysis to discover whether their business circumstances are feasible for adopting a direct-to-consumer model. You can take advice from e-commerce experts to understand the pros and cons of the D2C model, particularly for your brand.