During 2020, the main street faced its most challenging times. Already suffering shop closures because of pressures inflicted by a gentle migration online and rising landlord costs, COVID

was an unwelcome addition to the suffering plight. Resulting national and native lockdowns compounded further the pressure placed on physical stores with reduced footfall numbers, and shoppers.

Shopping behavior was already changing before COVID though. Convenience and selection have brought increasing numbers of individuals online. The pandemic has also forced some brands and makers alike to contemplate operating the middleman to specialize in a direct-to-consumer (D2C) experience. the explanations for this are numerous, whether because they're increasingly nervous about the present health of high-street retail (and the hand that feeds them); losing touch with their customers, or just having witnessed increased sales during the pandemic on their own websites. There are those that might not have a transactional web presence in any respect and feel liable to the changing climate, exasperated by events in 2020.

BridgeWeb is discussing direct-to-consumer during a series of articles, starting with why we must always do it; challenges faced; moving to D2C, and success stories.
Direct-to-Consumer: what's it?

Direct-to-consumer (D2C) is selling products to the customer while excision the middleman, e.g. retailers. Many do it already, and successfully, whether household brands like Nike, Apple, but recent purebred eCommerce businesses like Graze, Harrys, and more. Many are considering it as a chance, influenced by desire or necessity (for example those traditional B2B businesses whose trade has been decimated by the pandemic).

The retail ecosystem is swiftly changing as we all know, influenced by changing shopping habits. the liberty of having the ability to run into a store has for the present, been largely restricted. Shoppers can’t freely flick through the aisles, viewing items in an exceedingly tactile way. They’ve migrated online more so than ever which has provided both opportunity and challenge for brands and retail. For the brands and makers this has brought the customer on to them with website visits (if they need one), and if not, a missed opportunity.

All of those events as mentioned are making brands and makers think more about understanding their consumers more intimately, something often overlooked when selling via stockists and distributors. Is there a chance for them to make a more in-depth relationship with customers, own the experience from interest through to get and loyalty? Which ends up in the question, how? How do they are doing this when they’ve traditionally sold within the main through their stockists/distributors? How do they now sell to their customers directly?

Now is the time to be asking these questions and speech consultants like BridgeWeb who can help take those steps towards a more D2C focused strategy
The Risk to Retail

More people are shopping online because it’s convenient, quicker, and they’re spending longer browsing the web. this is often a possible threat to the retail sector, as buyers are browsing more online to search out the most effective deal, whether that’s free delivery or a tenth discount. If consumers can save £3 on delivery by shopping on a marketplace like Amazon or receive a tenth discount from a retail store or shopping via online retailers like ASOS, they will. While the savings don’t seem much, it holds a hefty cost to losing a customer and an immediate sale, especially when considering the customer lifetime value.

The main street is continuous to vary, with well-documented store closures within the media, and major names involved. Many of them were a serious source of sales for brands traditionally, and thus there has been a nervousness by brands regards their reliance on stockists and distributors. In extreme cases, following store closures, we've got seen companies subsequently left with distressing stock filling warehouses which they need to shift at cost. Also, often brands won't sell their entire product target stores as they compete for shelf-space, and a few are asked to supply exclusive product variants to those stores to deliver a competitive edge, often at the expense of the brand to manufacture such items. Brands will in fact still sell through retailers, but with their products competing for shelf space often with the retailer’s own products, and other brands, plus an absence of customer ownership and sales intelligence, can all pull together as reasons to a minimum of considering a more direct to consumer-focused strategy.
Marketplaces

Selling products through marketplaces like Amazon and eBay isn’t uncommon. for several brands, it’s the simplest and quickest thanks to getting their products ahead of the customer. Marketplaces are often seen because the golden ticket for several brands because of their unrivaled ready-made ecosystems that provide customers with a straightforward, one-click shopping experience.

Amazon is that the marketplace giant. The list of products available is endless and with their same-day delivery service, it makes shopping more convenient. Amazon can manage the promotion of your product(s), warehousing, packing, and shipping. the best and stress-free situation, right? To an extent, but there’s the tiny print. Selling on marketplaces means brands have less control over who sees their products, leading to certain potential customers being neglected. Data gathering is important in understanding customers, but the knowledge provided may be restrictive. Marketplaces also can control pricing, listings, and imposed trading terms, which are a few things to avoid if possible. The more control brands have over their products and services, the better.

The competition to sell on marketplaces is high, but imagine these retailers introducing their own branded goods supported the knowledge they’ve gathered, pushing them to the highest of the list.

All brands should ‘own their customer’, whether that’s via marketplaces, other retail stores, or through direct-to-consumer. But, if you don’t own your customer on the marketplace, you’ll have less control over pricing and fulfillment, and when the ‘hand that feeds you’ decides to manufacture its own product, what is going to you do?

If you’re a manufacturer or distributor, you may likely have a ready-made infrastructure in situ, i.e., production, warehousing, logistics, IT, etc. they need the potential to have the customer experience in theory from purchase, packaging fulfillment, and customer lifetime relationship. the sole major missing piece within the jigsaw to going D2C is your shop window. Often this takes the shape of an eCommerce website.
Owning your Customer

Owning the customer refers to understanding your audience and their buying behavior. What interests them? What makes them buy? Why do they continue to be loyal? It’s critical to any business to urge this right. The more control you have got, the simpler it's to sell. But owning your customer isn’t nearly understanding them or having control promoting your products, it’s about nurturing them.

Customer loyalty and lifelong value is essential. Creating a novel shopping experience and making the customer feel loved could be a key ingredient in D2C. It’s difficult to realize the identical level of non-public attention when selling your products or services through other retailers or marketplaces.

Brands also must consider what they'll offer consumers that the middleman can’t.

One of the largest advantages with D2C lies within the potential to possess the customer experience – building much closer relationships with them, understand more about what they buy, their behavior, and loyalty. this is often an opportunity to manage the brand experience – values, qualities, ethos throughout each touchpoint (from the primary interaction with the brand to packaging, messaging, and loyalty), that the customer knows what they’re buying in to; develop a more agile development program through customer feedback, and run less risk from retailer over-reliance as mentioned earlier. Many have the infrastructure already in situ and own the availability chain, so are arguably founded and prepared to travel to D2C.

For the more traditional businesses, however, going D2C will likely mean a sizeable change in business strategy and skillset. The newly forged relationships with their customers will give them access to data they’ve not been exposed to before or a minimum of had to disseminate or manage to its volume or detail. they need to now become a retailer. they have to have the proper skill sets to control during this new space, staff accordingly with the proper hierarchy in situ to succeed, most significantly, bring with it C-suite buy-in from day one in order that the correct culture is nurtured.

There are many reasons why brands, including our clients, have chosen to travel down the direct-to-consumer route. Primarily the conversation circulates getting much closer to, and “owning the customer”. Keep a watch out for our next article on the challenges faced when specializing in direct-to-consumer.