DTC challenges: 5 ways to cope in difficult times

From footwear and beauty products to pet food and wine, the direct-to-consumer model has seen wild success. In seemingly every product category, there’s a DTC company trying to steal market share from established leaders by cutting out middlemen and selling directly to consumers. You can even buy a casket online.

But DTC brands today face numerous challenges. Inflation, ongoing supply chain issues, and a looming recession are making things hard for even the most successful ones.

How companies manage DTC challenges during these difficult times? Here are five fundamentals for success:

1. Manage growth, don’t chase it
2. Get distribution right from the start
3. Don’t discount deep into profitability
4. Improve last-mile delivery
5. Build a foundation for success with technology

DTC company: Customer-centric growth 

If you want to grow and scale effectively, you’ll need to do it consistently over time. The only way to do that is by keeping your customer at the center of everything you do and managing growth accordingly.

Growth is not a goal or choice; it’s a consequence of doing the right things. Growth is not a destination, it’s a journey. Growth is not a strategy, it’s a tactic.

The real question you should be asking yourself isn’t “How do I get more customers?” but rather, “What does my business look like with 100,000 customers?”

Distribution is about more than sales channels

One of the most important keys to success for a DTC company is getting distribution right from the start. Distribution channels are important, and they can be a source of competitive advantage or disadvantage.

Distribution isn’t just about selling your product; it’s about making sure customers can find your products, whether via e-commerce like an Instagram storefront or brick-and-mortar stores.

And finally, getting distribution right means making sure customers know how great your brand is–so be sure to get word out through social media and other marketing channels.

Be cautions with discounts

As a new DTC company, it’s tempting to discount your products in order to get people in the door. But if you discount too much, or for too long, or at the wrong time of year, you can end up losing money. If you’re not making enough money from the discounted product sales, it won’t be worth it!

A couple tips:

• Don’t offer a loss leader (a product sold at a reduced price) in an attempt to generate more business from customers who would have purchased something else had it not been on sale. This can backfire because customers will see through this strategy and stop shopping with you altogether or switch stores when they find out about your policies regarding promotions and coupons.
• Discounting is best left for seasonal items since most retailers do this anyway; however, make sure that whatever item is being discounted has enough profit margin built into its price so as not to negatively impact overall profitability

For DTC companies, the last mile is the moment of truth

The last mile of delivery isn’t just about shipping costs. It’s where the rubber meets the road for your customer experience, your company, and brand.

Here’s how to make sure  you get it right:

• Be transparent about delivery times and costs
• Make sure your customer service team is ready to help with any issues that may arise during the delivery process (even if they don’t happen often)
• Create a first impression that will follow the customer through the rest of their experience with your brand

Last mile delivery for the post-pandemic economy

Last mile delivery is critical for wholesale success. Learn about fulfillment options like vending kiosks that can boost customer satisfaction.

Overcoming DTC challenges to create a foundation for success 

Technology offers an opportunity for digital transformation in today’s competitive, challenging market. It’s a tool that can help you achieve success in different areas of your business, including:

• Management of growth: This includes managing new customers, increasing sales volume, and growing revenue.
• Last-mile delivery management: This means optimizing inventory levels based on real-time demand data; ensuring timely product delivery through efficient route optimization strategies; and leveraging big data analytics tools to predict future trends in demand patterns so that inventory levels are optimized at all times without compromising service levels or delivery costs.
• Customer experience: Technology can help companies improve their customer experience by automating manual tasks, enabling them to serve the right customers at the right time with the right product or service.

This is the future of DTC. Companies will be able to design a customer-centric experience that’s also profitable for them. It’s possible, and it doesn’t mean you have to sacrifice one for the other.