Contents
What is direct to consumer?
Why has direct to consumer become so popular?
Which brands are selling direct to consumer?
Are you ready to go direct to consumer?
Where to sell direct to consumer
Managing direct to consumer sales
Integrating other systems and processes
Integrating other parts of your business
Selling direct to consumer
Managing retail partners
Collating sales and customer data
Do you want to go direct to consumer?
Summary
If you’re thinking of taking your brand direct to consumer in 2020, you’re not alone.
From mattresses and razorblades to dog food and underwear, the direct to consumer eCommerce model is flourishing – making it one of the top 2020 eCommerce trends.
But, among the success is challenge; challenge for existing brands to jump onto the bandwagon without damaging retail relationships, customer experience or brand reputation.
“Learning the ropes of eCommerce is essential for D2C success – regardless of how big your brand or customer following is.”
To help, we’ve created this guide on how to take your brand direct to consumer, including the following X essential considerations for taking the leap:
What is direct to consumer?
Why has direct to consumer become so popular?
Which brands are selling direct to consumer?
Are you ready to go direct to consumer?
Where to sell direct to consumer
How to integrate other systems and processes
How to integrate other parts of your business
Let’s begin.
What is direct to consumer?
Direct to consumer (D2C) commerce means selling your products directly to your end customers with no middle person, retailer or wholesaler involved.
Why has direct to consumer become popular?
We don’t need to tell you that the eCommerce industry has boomed. Consumers are buying more items online than ever before, and it’s coming at the expense of high street retail.
“Where we’re going, we don’t need stores”
In the past 24-months alone, we’ve seen the demise of Mothercare, Toys R Us and Karen Millen, while other shops are reducing locations and consolidating spaces. As a consequence, brands are rapidly losing retail partners and sales opportunities. Meanwhile, online retail is buzzing.
Consumers are flocking online where prices are cheaper, variety is in abundance and you don’t even have to leave the sofa. Online shopping isn’t just easy for shoppers either. eCommerce is an easy market for brands to enter, without the cost or complications of creating physical retail spaces. As a result, the D2C business model has flourished.
But, direct to consumer retail isn’t just about circumventing the failing high street. Direct to consumer sales bring brands significant benefits, including:
Control over branding, pricing, marketing, supply chain and the customer experience
Profits that aren’t reduced by middleman costs
Ownership of the customer relationship and market data.
And these benefits of going direct to consumer flow into other positives such as unlimited reach, personalisation, brand protection, customer loyalty, fewer overheads and more controlled marketing.
Which brands are selling direct to consumer?
There are two main types of direct to consumer sellers:
1 . D2C only brands
2 . Multi-channel D2C brands.
Direct to consumer-only brands
Direct to consumer-only brands are those selling via their own website and marketplace stores only. You won’t find these brands for sale by any other retailers online or in-store.
Notable D2C-only brands include mattress store Simba, razor subscription Dollar Shave Club and gym apparel brand GymShark.
Multi-channel D2C brands
Multi-channel D2C brands are those selling via their own website and marketplace stores, alongside retailers and wholesalers. Customers can buy via Boots, for example, while also buying directly from the brand’s website or Amazon store.
Well-known multi-channel D2C brands including Wilkinson Sword, BrewDog, Dyson and GHD.
“Online retail has made it possible for well-known brands to expand their revenue channels by selling to both retailers and customers at the same time.”
Are you ready to go direct to consumer?
However, going direct to consumer isn’t for everyone. It requires an understanding of the eCommerce industry, of customer expectations, of the relevant systems and tools, and of how to market yourself in a highly saturated market. It requires work.
If you’re considering entering the world of online retail, it’s useful to ask yourself the following questions before going D2C:
Where will you sell?
How will you manage sales?
How will you integrate your current systems?
How will you integrate your other departments?
How will you sell?
How will you manage your retail partners?
How will you collate data?
Do you want to go D2C?
Where to sell direct to consumer
There are two main sales channel(s) for direct to consumer brands: an eCommerce platform and online marketplace stores.
eCommerce platform
An eCommerce platform is a system used to power sales through your brand website. The best eCommerce platform for your brand depends on your size, development expertise and customer numbers.
The most common eCommerce platforms include:
Shopify – aimed at small to medium-sized brands, Shopify enables you to create and run a professional-looking eCommerce website.
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WooCommerce – aimed at small to enterprise brands, WooCommerce powers eCommerce websites that are completely customisable to your needs and branding.
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BigCommerce – great for those with a development team, BigCommerce is a highly-extensible SaaS solution that has the flexibility to take your D2C model forward.
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Shopify Plus – solely for large to enterprise brands, Shopify Plus comes with enhanced functionality and customisation for higher-end stores.
It’s important to take the time to consider which eCommerce platform is right for your needs now and in the future.
Online marketplaces
Online marketplaces are platforms where you list your products, alongside other brands and third-party sellers.
The most common online marketplace for D2C brands is Amazon, however, there are opportunities to sell via eBay, Etsy, Wish and other marketplaces too.
Many D2C brands take a multi-channel approach; selling on multiple sales channel(s) to maximise reach and fuel sales.
Managing direct to consumer sales
Once you’ve decided on the sales channel(s) you want to sell on, then it’s time to figure out how you’re going to manage sales from them all.
Are you going to log into each platform to view, process and finalise orders? Or are you going to use a multi-channel eCommerce tool that centralises your channels so you only need to log into one?
And what about your logistics provider or warehouse – how will they access your orders to process them?
Managing your sales is perhaps one of the most important considerations of going D2C because with poorly managed sales comes significant brand damage.
Integrating other systems and processes
For brands looking to run a multi-channel D2C strategy, you must ensure that your existing systems and processes integrate with your eCommerce operation.
For example, if you’re selling products online via your Shopify Plus website, will this affect the stock levels available for your partnered retailer?
The main systems and processes you need to consider are:
Live stock – how will you manage and sync stock levels across your sales channel(s) and warehouses?
ERP systems – how will you integrate with and update ERP systems such as Dynamics NAV, SAP or NetSuite?
3PLs – can your existing fulfilment operation handle D2C sales or do you need to work with a third-party fulfilment provider?
CRM systems – how will you feed customer data into your CRM system?
For these systems and processes, you have two main options.
1) Splitting your business into two separate functions (supplier and D2C). This helps avoid conflicting information and systems but it can be expensive and difficult to manage.
2) Using D2C eCommerce software. D2C eCommerce software uses existing sales channel integrations (or APIs) to connect, update and sync your existing systems and processes.
Integrating other parts of your business
You’ll also need to consider how to integrate other parts of your business too.
You’ll need to train staff, expand teams, recruit additional headcount and consider things such as customer service, technical support, marketing, logistics and returns.
“It’s really important that brands consider the full consequences of going D2C. It’s not just your marketing department or warehouse who’s going to be busier – it’s everyone.”
Selling direct to consumer
Selling directly to consumers is a whole different kettle of fish than selling to retailers and wholesalers.
Depending on your business model, you may already have experience selling D2C in theory (i.e. you run marketing campaigns for your brand). But, now you need to learn how to sell your brand, website and eCommerce store.
Matters that you’ll need to research and consider include:
-The importance of fast and free shipping for driving sales
-Winning the buy box on Amazon and other online marketplaces
-Search engine optimisation for relevant keywords.
You’ll also need to think about why a customer should buy directly from you as opposed to their existing retail channel.
A great example of a brand that incentivises customers to buy direct is Nike. You can buy Nike trainers and clothes from retailers across the country. But, only by buying directly through Nike can you customise your trainers and clothes.
Other ideas to attract consumers to buy direct include offering subscription services, as done by Wilkinson Sword; offering exclusive products and merchandise, as modelled by BrewDog; and offering rewards and perks, as done by Noughty haircare.
Once you’ve established your USP, then you need to use it to win customers. With direct to consumer, you have full control and ownership of the end-to-end customer journey – from marketing right through to after-purchase communications.
You might choose to adopt a content-first approach, use influencers, create a viral video, implement an aggressive SEO campaign, or adopt a multi-channel marketing approach.
Managing retail partners
If you’re adopting a multi-channel approach to D2C, you want to ensure that you don’t upset your existing retail partners. After all, they’re a valuable source of income, brand awareness and custom.
To successfully manage your retail partners, it’s important to ensure that you’re competing with them, not against them.
For example, you could use your D2C channel to sell products that don’t perform so well in-store. Or, you could gain valuable market insights that help your retail partner out too.
Collating sales and customer data
Up until now, your sales data largely consists of third-party data from retail partners. You know what sells well, which months are best and even the type of marketing that resonates best with your customers.
What you might not know is what turns your customers on, what they’re interested in, what motivates them and what their favourite sales channel(s) are.
By selling direct to consumer, you have access to more data than ever before on your customers. It’s, therefore, necessary to have a method or tool for collecting this data.
Do you want to go direct to consumer?
As already mentioned, going direct to consumer isn’t for everyone. It’s a significant business move that requires more than setting up a website and waiting for the orders to roll in.
Accordingly, you need everyone on board. Full company buy-in. Complete organisational support.
To achieve full support, you need a plan – a strategy that sets out how you’re going to achieve the above and how you’re going to propel your business forward.
Summary
And there you have it. Direct to consumer may be the latest retail trend, but with declining high streets and the growth of online shopping, it’s a trend that’s here to stay.
With an abundance of tools, support and interest in direct to consumer brands, now is the perfect time to take advantage and move your customer relationships to the next base.
As long as you have a plan in place for achieving the above considerations, your brand will flourish in the D2C world.
If you’d like more actionable insights into direct to consumer and other eCommerce strategies, sign up to our blog.
About Expandly
Expandly’s D2C eCommerce software powers you to integrate your existing systems with new online sales channel(s) and eCommerce platforms – to manage your D2C sales from one dashboard.