Direct to Consumer eCommerce has grown in popularity in the last five years, as it allows entrepreneurs an easier entry into the marketplace. The direct-to-consumer concept enables businesses to take complete control of each step of the retail process from manufacturing, marketing, and distribution. By selling directly from their website businesses can cut out the middleman retailers and sell directly to consumers, significantly lowering the overhead cost and increasing profit margins. The technique motivates business enterprises to develop an entrepreneurial mindset and handle every process themselves.
Consumers have more power to choose products and deal with the internet than ever before. They are more willing than ever to research the best products and discounts. This is where direct-to-consumer eCommerce comes in as the lower overhead allows businesses to offer better deals and more accurately market their product.
If you’re interested in learning more about DTC eCommerce, keep reading.
Why Brands Are Avoiding the Intermediaries
Most products do not go directly from the company to the final consumer. There is a supply chain consisting of several parties, from manufacturers, shippers, distributors, wholesale and retail warehouses, shops, delivery personnel to the final consumer.
The journey a package can travel before reaching the buyer poses some challenges to the business. First, it significantly affects the profit margins as every stop in the chain assesses fees. Second, it does not allow the brand to communicate with the market and get direct feedback. Companies have to develop ways to sell their products directly to overcome these challenges. Brands opt for DTC e-commerce over selling via intermediary platforms like Amazon and Walmart.
The Role of Technology in DTC Ecommerce
New technology plays a pivotal role in enabling the success of DTC e-commerce. The evolution of software technology allows small businesses to build functioning eCommerce websites. Making it easier than ever to open an online store and sell to their customers directly.
New technology has also drastically improved delivery methods to meet the demands of the eCommerce boom. So, new companies don’t have to stress as much about the intricacies needed to ship products across the globe. Even if you don’t own a delivery fleet, you can quickly partner with other companies specializing in that sector.
Thanks to digital technology, brands relying solely on third-party vendors are now shifting to DTC e-commerce and enjoying the benefits. The good news is that this business model will continue growing as manufacturers, brands, and even customers are getting more comfortable with the idea of abandoning retail stores.
Also read: Why you Should Outsource all your eCommerce Web Development
Benefits of Adopting DTC Business Model
DTC e-commerce offers many potential benefits to your company that aren’t available through third-party vendors like Amazon and Walmart. Here are some of them.
- Dark Stores Allow Efficient On-Demand and Local Delivery Services
Ecommerce brands can choose a dark store to fulfill their customer’s orders. It is a space where online retailers can satisfy their orders and allow customers to pick up their items in person. It is a cheaper alternative to stocking ordinary stores. One can rent warehouse space to cater to their needs, preferably in less commercial locations.
These stores are ideal for on-demand delivery and a significant advantage of the DTC eCommerce model. The stores are within local areas, allowing online buyers to receive their orders quickly.
- Consolidated Shopping Experience
Every buyer is bound to enjoy the experience of shopping across multiple sales channels. Many customers search for a product online but choose to examine it in-store. The omnichannel approach allows a consistent messaging and brand experience irrespective of where the customer makes the final purchase.
The direct-to-consumer business model offers an excellent marketing technique with a branded experience. Communication remained undisrupted across all the channels and maximized to encourage more sales.
- Products Are Available at All Times
Traditional retailers always strive to solve the puzzle of consumers wanting to access certain products right away. Nowadays, consumers opt to check online before arriving at a third-party vendor to ensure their desired item is in stock.
If the in-store buyer does not get the items they want right away, they will look for alternatives elsewhere which mean a lost client for you and a gained client for your competitor. DTC eCommerce can prevent this as your customers are ordering directly from the manufacturer and not through an intermediary who can only hold a limited amount of your product.
- Minimal Time to Market for a Product
Initially, it would take years for a brand to test a new product and understand the demographics that make up its potential customer base. Apart from the time spent on market research and product testing, the process of introducing a product to the retail stores is time-consuming.
DTC eCommerce offers a shorter wait time for consumer feedback. When the product reaches the market directly from the brand, it is immediately tested, and the brand receives timely results. In addition, the buyer can receive their order within a short time of placing it since there is no need for prolonged handling like training store personnel, stocking in shelves, and much more. Time management and efficient delivery strengthen the bond between the brand and the customer. A well-made eCommerce site will allow for consumer feedback through reviews and customer testimonials, giving you an up-to-date account on what works in your product and free marketing for your brand.
- Improved Customer Insight
When the company takes charge of the entire business process from marketing, inventory, sales, and delivery to the final consumer, it is easier to get better insights into their customers’ preferences. Furthermore, selling directly to the consumer gives the brand access to a larger volume of market data which may help them understand which population needs a particular product and why.
A product that interacts with the consumer throughout the process can enable the brand to collect relevant information regarding the consumer. Therefore, the company can use the information to strengthen the product lineup and introduce more efficient products for the customer’s benefit.
- Potential Increase in Profit Margin
Relying on wholesalers’ warehousing and distribution leads a company to spend more business finances in a sector where the customer never interacts. Therefore, partnering with a reliable mail delivery service to sell directly to the final buyer allows the company to profit from selling a particular product. It also helps to improve customer experience.
Instead of business revenue going to other online vendors like Amazon, where the brand might be selling, the company can use the money in more critical areas. This is the most popular reason many businesses switch to DTC eCommerce as the increased profit margins are very attractive.
How To Get Started with DTC Ecommerce
It is simple if you would like to shift to DTC eCommerce today. All you need is to follow these simple steps.
1. Find The Right Data
It would be best to have detailed consumer insight to offer accurate brand experience from creation to delivery as a company. Therefore, you need to look for reliable sources of data before starting. Acquiring reliable data will help you join the dots and develop a clear picture of your target market.
2. Understand your target customers
Your DTC approach needs to stand out; preferably, it should complement your other channels. Look for recent data sources that will help you see beyond ordinary demographic data to understand various aspects of your target population. You need to understand their attitudes, behaviors, actions, and motivation for you to deliver to their satisfaction.
3. Map Your Potential Customers’ Purchase Journey
You may not find the “right way” of mapping your customers’ journey, which means you have to identify an ideal approach that serves your business needs well. An excellent map uses data to determine the consumers’ needs, requirements, and marketing touchpoints that matter when interacting with your brand. You can use the marketing technique that impacts the market and maximize sales.
4. Create a Brand Message
An excellent brand message is what will convert potential customers. Identify your brand niche and engage your target market with a message that will resonate with them. Make the brand message engaging, and customers will find a way to buy directly from your site.
5. Weigh the Correct Metrics
Avoid the trap of considering the same metrics every year. If you constantly change your marketing strategy, you have to be flexible enough to recheck the metrics you are tracking. DTC eCommerce should concentrate on purchases, average order value, repeat purchases, and revenue’s lifetime value.
Trends in DTC Ecommerce
As the DTC model evolves, you must keep pace with the trends as a company or brand. Here are some of them.
- Potential for more retailers to shift to DTC
- Digital brands moving to physical shops
- Direct to Consumer brands stretching to diversified categories
- Growth techniques may become more complex
- Technology continues to boost sales for DTC eCommerce
Summary: Is DTC Ecommerce Ideal for Your Business?
With all these factors enabling companies and brands to create better customer relationships and experiences, you will undoubtedly want to take your business operations into your own hands. Corporations that already have a solid customer base have an added advantage. Their evident offerings will make the DTC approach an excellent way to innovate, take care of new customers, and expand their market reach.
Proper planning is essential for this digital model’s success. It would help to identify any favorable trends in the market and save your business from some avoidable cons. Therefore, consider adopting a direct-to-consumer business approach today and note the difference.