Earlier this month we looked at what to know about the Direct to Consumer e-commerce market going into 2019. This article offers insight on why direct to consumer channel should not be ignored by manufactures and as how it is imperative to have a strategy around it to be future-ready. Being future-ready is the difference between good and great companies. The ones that are constantly confronting the reality of the market and consistently evolving will have staying power, while those that are not are will be pushed out by others that are- quicker than we anticipated. One avenue to explore for the manufacture is going direct to consumer (DTC). Direct to consumer e-commerce can be extremely intimidating and complex for the manufacture because it opens up a whole world of challenges from foundational to operational.
At Echidna, we have helped our B2B clients overcome numerous challenges when it comes to being future ready, specifically building a DTC strategy and executing on their DTC e-commerce operations. Five challenges in particular continually come up with our clients as they look to build and improve upon their DTC business. Here are tips on how to help you compete and expand in this space while overcoming these common challenges.
As a manufacture, you have already built solid relationships with distributors and retailers to sell your brand. You will want to work with your sales channels openly to communicate strategies to benefit all parties involved. Numerous strategies exist on how to overcome this challenge, but a couple of the most successful include: Ship to Store via your online checkout and consistent online pricing to not undercut retailers.
Creating a DTC business means you need to review your internal teams. Taking on consumers means a single orders, returns, and upped customer service calls. Marketing processes will differ and logistics are changed compared to that of a manufacture. You might need to change job descriptions, onboard new team members, or partner with an outside agency to provide the development and design expertise that is required for their online experience.
Subscription services shouldn’t be overlooked. They are still heavily used and popular, a great option when going DTC for brand loyalty and harnessing important customer data to further offer personalized experiences. Subscribers to your products are great prospects for up-sells and you have their consistent renewals. Just remember it is not a perfect science, allow yourself time to test and iterate with pricing, offers and promotions to find what works best for your consumers.
The Direct to Consumer market will require a customer centric approach organizationally and foundational and operational change will need to happen in order to meet the modern consumer requirements. By overcoming the challenges of DTC, you will be able to create new revenue streams, increase margin, brand loyalty and gaining more control of the brand itself. Ultimately, having a DTC channel you will be able to further compete against your competitors, including Amazon who is quickly executing on Amazon Business- a B2B marketplace (more on that in an upcoming article, stay tuned).