Direct-to-consumer (D2C) has become an increasingly hot topic and is sure to be on everyones radar at the upcoming NRF 2020 Show. Between the threat of digital disruptors and the pricing pressures from retailers, all brands need to adopt a consumer-centric mindset to stay relevant and prepare for future innovation. One way of doing this is through creating ones own e-commerce channel to obtain consumer data to drive their decision making processes. Brands that get e-commerce right win big time in the long run; owning customer data means being able to craft better (more personalized) customer experiences, build more loyal brand advocates, and take all that direct from customer feedback and intel to R&D when crafting new products.
So what creates a good (or bad) D2C experience? We are taking an inside look into the D2C market to understand more.
- Complexity de-mystified. Taking any category that is perceived to be complex and bringing it D2C in a simple, easy to understand manner is one way to start thinking about your strategy. Products that have complex experiences are going to overwhelm the consumer, so you need to break down the education process and make it simple for the buyer to be in control. Brands that understand that and achieve the right, simplified user experience will see increased success. A great example of this is the newly released Nike Fit app. Nike realized the industry had a problem- 3 out of 5 people are wearing the wrong size shoe- so they went directly to the consumer and simplified the way in which consumers can find the optimal fit for their foot through the use of AI. Nike is just one example of a brand that is doubling down on its D2C channel and thinking outside of the box.
- Less is more. Eliminate unnecessary choices on your e-commerce site- at least initially. Many D2C companies have the most success when they offer less choices right off the bat. This goes back to that complexity point in #1. In doing so, it also forces your business to truly focus on its brand, which allows you to see your competitive landscape with new eyes. D2C brands work hard to make their products easy to find, choose from and access.
- Customer centric matters. Implementing things like a user centric design and customer centric strategies like loyalty programs and personalization all rank highly amongst consumers and help you stand out from Amazon. By creating unique, positive, tailor-made interactions with customers no matter where they are it majorly impacts the customer’s perception and trust around your brand. And as you get more consumer data you will see the opportunity to create continual, dynamic improvements allowing you to evolve with your users needs. What appears to be even a small lift in conversion rate can have significant impact on your revenue.
- Integrating the commerce with the content. Understand that the D2C market is largely so successful because these brands have taken the time (and invested dollars) to tell a unified story, weaving in commerce. This integration of commerce and content is a central priority because it will serve as a foundation for emotional connection between the brand and consumer.
Having a Direct-to-Consumer Data Strategy
A D2C website will create the opportunity to collect direct insight from customers, across the entire customer journey. This is by far one of the most important pieces to creating and continually growing a successful brand. It’s important to ask two questions before you start the D2C process so you know how to properly use this data in order to drive action.
What exactly do you want to know? And why do you want to know it?
Seems simple, but make sure you have clear, deliberate answers to these questions. Once you have a D2C website you can expect to capture all sorts of data (onsite behavioral analytics data, onsite search terms, customer ratings and reviews, purchasing trends, primary contact data, customer service enquiries, etc.). All this data can easily get lost if you don’t know what it is for and where it should go to be useful for the brand. Make sure you identify where ownership of each grouping of data lies so you can ensure that someone is responsible for analyzing it and driving action for the insights.
As consumers look to brands for convenience and personalization, the D2C arena will continue to grow. It’s important to consider if embedding D2C into your broader channel strategy makes sense and how to develop a compelling customer value proposition. By going in with agile execution and stringent metrics you will be on your way to D2C success.
Contact Echidna to discuss D2C further.