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Google Analytics – Universal Analytics
June 10, 2020
The rapid shift towards E-commerce has caused that consumers can make purchasing decisions online in almost any area of market without any obstacles. It turns out that brands that base their business strategy on the D2C (direct-to-consumer) model from the very beginning win. The key to success turns out to be total independence - both in reaching out to customers and meeting their needs.
As recently as over a dozen years ago, the launch of a new brand on the market was associated with great costs of promotion and image building, not to mention numerous partnership agreements. Today we are witnessing a completely different approach. The E-commerce trend has made the intermediary - the retailer -redundant and the whole sales process can take place directly on the brand -customer line. This is a significant facilitation, but it also has its significant limitations.
The D2C model is now becoming the first choice for most small and medium businesses. It gives an unquestionable advantage in the form of complete independence from the sales broker, which in traditional models is the retailer. Thanks to this, the brand gains full control over its product – it’s not limited by the way it reaches the customer, displays the goods or handles the order.
What is more, the most valuable information about the customer remains in the possession of the original seller. So, the brand does not lose valuable customer data to the retailer, who usually does not disclose full sales information. With zero data loss, a D2C brand can not only profile its customers in a better manner, but also continuously improve the product. It also does not share the margin with a sales broker, which means a lower price for the customer.
The most famous example of a brand that has successfully adapted the D2C model in its business strategy is Warby Parker. As one of the first, it offered customers the opportunity to order several pairs of spectacle frames to try and choose the best without leaving home. Since then, many frame manufacturers have followed in their footsteps, offering their customers a similar solution.
D2C's strategy is based on the assumption of multi-channeling - to reach its potential customers, the brand uses the most adequate sales channels for its target group. A key role is therefore played by a well-functioning sales platform, enabling both familiarization with the product and a simple way of ordering it.
However, the use of performance strategies is also very important. D2C brands use social media for this purpose, especially in the following two ways:
Effective use of social media is possible with advanced targeting methods or re-marketing strategies. However, setting them up for D2C brands is easier, because they have much more data about their customers than brands using retailers.
The effectiveness of this tactic is confirmed by Glossier - a famous cosmetic brand operating in the D2C model, whose vast majority of customers come from Instagram.
The use of direct strategies to reach out to the customer also means benefits in terms of easier customer loyalty. In this context, however, the most important thing is to develop a consistent brand image and maintain it consistently.
This is especially suitable for beginners who want to offer a specific product with a specific ideology behind it. If a brand is reliable and consistent in its communication from the very beginning, hundreds of loyal customers will follow its message.
Basing sales on a specific narrative and building an interesting storytelling is extremely important for brands operating in the D2C model. Thanks to this they can establish a close relationship with potential customers and build along-term relationship with them based on common values and trust.
The Polish brand Your KAYA, which offers intimate hygiene products to women, has decided to follow this path. Being independent in its communication strategy, Your KAYA decided to support values related to femininity and menstrual topics, as well as to strongly manifest the ecological trend. Thanks to this, from the very beginning, it engages its clients in a narrative consistent with the offered products, building the brand value based on a sense of community.
The Connected Shoppers Report from 2017 indicates that today's consumer is strongly accustomed to far-reaching personalization. We want to interact directly with brands and feel treated individually, exceptionally. We even expect that it is not us who will look for the right products for us, but it is the brands that will find us - based on advanced algorithms and artificial intelligence, which use we are becoming more and more aware of.
In this field D2C is also becoming a great winner - not only does it make it easier for us to engage in the relationship with the brand, but it also allows for a strongly individual customer journey, which translates into a more positive shopping experience.
What is more, thanks to the data we have about customers, brands are able to select individual offers, offer special discounts or promotional actions. They are not dependent on the will of intermediaries and marketing agencies, so they can freely control the experience of their customers at every stage of their shopping path.
This translates into two important trends:
Customer loyalty also translates into the ease of obtaining opinions on the product from the customer. D2C brands respond much faster and more effectively to consumer feedback, adjusting the level of service to their customers' current needs. Therefore, the use of social proof of rightness in marketing communication works well here.
When deciding to run your business in the D2C model, you should first of all knowhow to distinguish your product from the competition - the most successful brands here are authentic and consistent in their communication. It is also worth noting that the lack of intermediation on the part of retailers means greater responsibility for the seller in terms of sales logistics and delivery of products to customers.
However, it is crucial to realize to what extent our business can be realized in the online space. Some D2C brands open their stationary stores over time, but most of them start as E-commerce stores, so they do not offer the customer immediate physical contact with the product. It's worth to keep this in mind and think about how to offer customers the best experience of contact with the brand in the online space.
Remember - D2C does not mean that you have to be responsible for everything yourself. If you are just beginning to sell in this model, it is worth to use software house support, which will implement the appropriate technical infrastructure for you and prepare your business from the logistical side. Choose one that already has knowledge and real experience in this area. This way you will be able to achieve the desired success directly with your business strategy.
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