In our first article, we discussed what direct-to-consumer (D2C) is. this text raises a number of the challenges faced by retailers for entering this marketing realm.

While D2C looks like the logical thing to try to do, there's more to the current marketing approach than creating an eCommerce platform. you wish to think about warehousing and therefore the logistics and marketing behind successfully pulling off a D2C strategy. Over the subsequent few weeks, BrigdeWeb is speaking with Industry experts so as to answer these inquiries to facilitate your create your own D2C strategy.

So what are the most challenges faced when incorporating a direct-to-consumer strategy?

Warehousing and Logistics

One of the most important changes moving to D2C is taking full control and managing your products, including storage and dispatch. Having full control is that the ideal situation, but is your business geared to manage your product storage and dispatch?

There is an enormous amount of pressure for retailers to confirm their products are delivered on time to consumers and in one piece. the littlest delivery change or damaged packaging is enough for the patron to require their frustration publicly. there's a high expectation from customers to induce their items delivered on time, adding unwanted pressure to businesses. So, this is often something that has to be fulfilled from the get-go.

“Selling D2C tends to lead to a lower shipment value versus bulk merchandise movements from B2B. This often implies that de minimis thresholds don't seem to be exceeded for D2C”

In terms of warehousing, is your warehouse management system (WMS) ready to tackle D2C and fulfill orders? Will you wish up upgrade your current WMS set-up to carry thousands of products and update when an item becomes out of stock? If you’re unable to fulfill an order, the customer will look elsewhere for it. Are you digitally geared for handling small packages as opposition comparatively fewer large packages? As a business, does one have the capabilities to select, pack and despatch?

As our Head of Development Chris McCarthy-Stott discussed in BridgeWeb’s most up-to-date virtual Meetup event, there are legal and tax implications, like your third-party logistics provider deciding to accommodate your stock off-shore. This wouldn’t be as problematic if you went down the D2C route, as you'd have more control over the logistics and warehousing of your products.

D2C Marketing

All marketing efforts should be modernized to make sure you’re reaching a bent on the audience while understanding your end consumers’ needs. does one understand your end consumer and their behaviors online? does one know the way to have interaction with the various personas within your audience? Ensuring your customers feel special by providing them with a novel service that you just weren’t necessarily able to achieve beforehand, is critical to safeguarding a successful Direct-to-Consumer strategy. this will primarily be achieved through social media, pay-per-click campaign (PPC), and other online marketing tactics (email, content campaigns, etc.), so it’s vital to urge the messaging right and consider rebuilding customer loyalty.

You want your customers to bear in mind that they will buy your products directly and not through a giant retailer like John Lewis, and zilch has changed in terms of quality. the most important difference is a more tailored service, exclusive offers, and bespoke messages while supporting the business as opposition the retail giants. So how does one compete with retail brands that your consumers know and trust?

Data & Marketing Platform

It’s not a secret that manufacturers are going to be collecting data over ever from their customers. But the question is, how does one digest this information and use it?

Data helps businesses understand their customers and what their interests are. So, you want to have the capabilities to successfully collect this data, store, manage and interpret it. Manufacturers must consider the demand, capacity limits of selling and dispatching products themselves, and avoid excess stock.

The platform you utilize to manage stock and data is significant to success. While many retailers use custom platforms because of cost, they'll cause long-term headaches.

“D2C isn't just a difficulty of getting an eCommerce website. there's an entire range of behaviors and activities that your business has to understand and execute”, Chris McCarthy

Building Trust

Brands venturing down the D2C route must rebuild trust with the top consumer. While these consumers bought from your brand within the past, it'd have done through competing retail stores like John Lewis and Debenhams. So, while there may already be trust along with your brand, that level isn’t necessarily matched with making a procurement directly from you. You consumers aren’t just purchasing a product, they're purchasing an experience that starts the instant they land on your website. It also doesn’t just end once they receive their delivery.

The trust doesn’t just be intimate with your customers; it lies along with your chosen team. To successfully fulfill a Direct-to-Consumer strategy, you would like to determine what capabilities you've got in-house to manage specific areas like marketing, and what to outsource, like warehousing, packaging, and delivery.

Other Challenges to thinking about when going D2C

You might think there are other routes to plug that aren’t bricks and mortar and are digital. There are, of course, retailers who have the net reach and therefore the ubiquitous marketplaces. The question is whether or not you wish to surrender the space that your brand could own to a 3rd party whose objective is to grow their margin, not yours, and to possess your customer? What is it that makes your brand strong and drives revenue?

So now you’ve become the retailer there are some challenges you wish to deal with. a number of them are technical; other processes but, the most one is how you speak to the customer. It’s perhaps something of cliché to mention, but B2B tends to be a bit brusque. The determinants of a deal though increasingly requiring finesse will tend to be to the purpose. Your consumer has to feel valued and loved; therefore, you want to nurture them. they need a wealth of choice on where they will spend their money. this is often a controversy of emotional intelligence that will permeate into your customer communications.

BREXIT

BREXIT adds another level of complications to the combo. Here are some implications to contemplate that we discussed in our Meetup.

Import VAT
Additional VAT registrations for eCommerce and B2B
Canada businesses require a Fiscal Representative
250m new customs declarations and checks
Paying custom tariffs

The new VAT obligations, if not addressed properly, can cause poor customer experience, fines, and penalties, customers paying extra unnecessary costs, and unwanted delays at customs borders.
There is plenty to contemplate when moving to D2C, such as:

How are you able to get orders into the warehouse/ 3rd party?
How will you manage requests for returns?
How will you manage customer queries?
How are your customers visiting pay you?
BridgeWeb can identify differences in approach, culture, and process across a typical B2B business.
The aim of this text isn’t a scaremongering approach. It’s to confirm you understand all challenges faced and ready for moving to Direct-to-Consumer. Over the following few weeks, we are going to be providing you with the tools and knowledge you wish to transition to D2C.