D2C business model: Why some companies soar and others fail wildly
The D2C business model is all the rage, but success isn't guaranteed. CPG brands need careful planning and a strong value prop to reap D2C benefits.
Today, it’s clear that consumer products companies need to create B2B mobile first e-commerce experiences for customers. Using their mobile devices, consumers are beginning the customer journey in their cars, on the bus, at restaurants, and elsewhere. Consumers are even buying your products on their phones as they browse the shelves at brick-and-mortar stores or buying online from home and picking up in store.
But driving a successful direct-to-consumer business isn’t exactly easy for a company that’s traditionally sold through B2B channels. What’s the path forward?
Follow the DTC path: 7 steps to B2B mobile-first success
Last summer, on a warm, sunny beach, I was scrolling through social media when a sponsored post by my favorite shoe brand popped up. Suddenly, panic set in. I remembered something I’d put off for weeks – I needed to buy shoes for a friend’s wedding.
I worried I wouldn’t get the shoes in time if I bought them after my vacation. Disruptions to the supply chain scared me too. The thought of waiting a second longer to make the shoes mine filled me with dread. So, I tapped into the shoe brand’s e-commerce site and quickly placed an order – all without leaving the beach.
I was able to do this because my preferred shoe brand had taken the right steps to create a mobile first, customer-centered e-commerce experience. When going B2C and setting up a D2C channel, follow these steps:
- Define why you want to sell directly to consumers
- Determine your value proposition
- Share this value proposition with the consumers who care about it
- Execute your new D2C channel flawlessly
- Get customer feedback about your processes and products
- Transition between customer acquisition to build long-term relationships
- Capitalize on competitive advantages
How to personalize customer experience: A D2C road map
Learn how to personalize customer experience and see massive direct-to-consumer success. First-party customer data provides the insight brands need to deliver.
Benefits of personalized, B2B mobile first via a D2C model
D2C e-commerce sales grew 45.5% last year in the United States, according to statistics from eMarketer. This figure is estimated to grow each year through 2023, and so is the number of consumers who make these purchases on mobile.
Many companies may cite this growth as their sole reason for wanting to go D2C, but there’s more to it than the promise of improved sales. What else can you and your customers gain from a D2C model? Here are some benefits:
- Increased customer satisfaction and retention
- More control over brand messaging
- Direct access to customer data
- Stronger brand loyalty
Direct to consumer relationships: How to build brand loyalty with D2C
D2C sales are growing by double digits year over year - are you forging direct to consumer relationships?
Be intentional when going direct
Modern consumers don’t have patience to scroll through endless pages of products on your e-commerce site. They don’t want to shop only on a desktop computer. More often, they want their entire experience to begin and end in the palm of their hand, and if possible, with just few taps or clicks. It doesn’t matter whether consumers seek out your products in a mobile browser or see an ad for your offerings while using an app.
Consumers are looking for companies that offer them the right product at the right time. You might ship your high-quality, well-priced products to customers quickly, but how easy is it for them to actually order those products? If customers need to jump through hoops to find products and place an order, they’ll simply shop elsewhere.
But if the answer to effective B2C e-commerce is so simple, why do so many e-commerce experiences fall short? Oftentimes, it’s because brands don’t build these experiences with intention.
For instance, your business may have adopted a D2C model and provided e-commerce options because you felt like you had to. You may have felt the push to go D2C before you were ready, without first creating a genuine value proposition or engaging with customers to find out what they really want in an e-commerce experience.
Meet consumer needs in the moment
On the beach, the sun made it hard to see the screen, even with my phone at maximum brightness. But the brand’s customer-friendly UX made it easy to navigate and infer what I was doing as I added shoes to my cart and checked out. I’ve done enough mobile online shopping to know what works.
The ease of my shopping experience was aided by the fact that I’d previously browsed the site and added a few potential pairs of shoes to my favorites list. Though I curated this list on my laptop at home, these favorites were saved to my user account, so I could easily tap into this list as I sat on the beach.
“Favorites” lists and streamlined checkouts are standard parts of the B2C e-commerce experience today. But there’s room for innovation.
Some of the most successful D2C companies are baking intelligent technologies into their e-commerce solutions to create more effective customer experiences. For instance, with AI, your business can connect customers to the products and services they want – maybe even before they realize they want them.
AI and other technologies can help you launch new D2C channels quickly with low-code and no-code tools that empower you to build an effective e-commerce experience. This is key to creating an e-commerce experience that delivers what customers want yet exceeds their expectations, even if they’re sitting on the beach.
