Direct to consumer (D2C) e-commerce: Great for buyers and brands alike

Direct-to-consumer (D2C) channels are uniquely positioned to provide customers with exactly what they want, when and how they want it. They provide personalization, convenience and consistency for buyers, but what are the benefits of direct to consumer e-commerce for brands?

Here are the top three:

1. Control, from messaging to graphics
2. More data for better marketing
3. Improved customer experience

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The mutually beneficial benefits of direct to consumer

Today, B2C companies are increasingly adept at bringing products to consumers precisely when and how they want them – an important option amid a global pandemic that kept many shoppers out of stores for months.

And in such a world of disruption, there’s little else more appealing than the concept of consistency. Subscription services in particular are a prime example of the kind of consistency B2C companies can provide. Omnichannel experiences, where customers can enjoy the same experiences and products across channels, is now less of a perk and more of a mandatory requirement.

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The benefits of direct to consumer e-commerce for buyers are mutually advantageous for brands. Kunle Campbell, e-commerce advisor and creator of the 2X eCommerce podcast, says that there are three key reasons for brands’ increasing expansion into D2C.

Control. D2C channels offer businesses complete control over their brand, from their messaging to their graphics. Your business doesn’t have to compromise, and the experience is wholly your brand. D2C also offers you more control of your supply chain and customer data.

Data. D2C companies get an end-to-end view of data by owning the entire process from manufacture to sale. D2C even empowers you to use that data to enhance your D2C channels. With data on sales and website traffic at your fingertips, you can create more-effective promotional campaigns. And you can reach out to your customers with personalized offers, now that you have their contact information.

Customer experience. D2C companies gain full ownership of the customer journey. Your newfound control, over your brand and your data, empowers you to create a customer experience that meets both you and your customers’ goals. For instance, potential buyers visiting your D2C site won’t get pulled away by distracting suggestions for similar products from your competitors, which is more than can be said about the experience on some leading digital marketplaces.

D2C: Look before you leap

Experts agree: we’re surrounded by stellar examples of D2C business today. But they warn that you need to be careful of jumping into D2C just because everyone else is doing it. They talked about best practices in the latest episode of “Keeping Up with E-Commerce,” a new LinkedIn Live series.

“You have to think about your business model and you have to think about the channels – and it’s not always about increasing sales and opening up a new direct-to-consumer channel,” Alex Stickelberger, principal of customer experience at BORN Group, said. “It’s a just whole transformation process in general and how to communicate with the customer, how to create extra value, and how to find a sweet spot where they’re accepting the offer you’re giving them directly.”

Javier Flores, global industry principal of consumer products at SAP, emphasized the importance of strategizing before embarking on D2C.

“Not just because everyone’s doing it. That wasn’t a great excuse when I was a kid,” Flores said. “Maybe you’re looking for an additional revenue stream, looking to increase customer reach, to introduce a new product line or services, to help consumer insights, or to drive brand awareness.”

How to reap the benefits of direct to consumer e-commerce

In order to launch a successful D2C strategy, companies should take these seven steps, according to Flores:

1. Define why you want to go direct to consumer
2. Determine your value proposition
3. Share this value proposition with the consumers who care about it
4. Execute your new D2C channel flawlessly
5. Get customer feedback about your processes and products
6. Transition between customer acquisition to build long-time relations
7. Capitalize on competitive advantages

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D2C examples: Brands that are leading the charge

So what brands they think are ruling the D2C space right now?

“Nike, without a doubt. Go back to 2010, direct-to-consumer sales were 13% of total sales. Obviously with COVID, that’s 33% now today. Their target for 2023 was 30% – they think they can do 50% in the next five years. They’re doing it with more omnichannel experiences,” Kunle said.

“They have an e-commerce app, they have a running app, a sneakerhead app, and an in-store type experience app, and they just integrate all of those mobile experiences with commerce,” he added.

Stickelberger highlighted Nestlé’s line of customized D2C dog foods, which capitalizes on two major trends today – the desire for personalization and the boom in “pandemic puppies.”

It also provided a welcome option for dog owners unable or unwilling to visit brick-and-mortar pet stores during lockdown, including many first-time pet owners who are likely to become long-time customers thanks to the convenience and consistency of Nestlé’s service.

Nespresso, Flores said, was one of the pioneering innovators in D2C business. Now that competitors have entered the market, Nespresso stays ahead by continuing to innovate, such as with its cafes that offer consumers an opportunity to taste a variety of coffees before buying the company’s individualized espresso packets for their at-home Nespresso machines.