ecommerce

How to Take Your Brand Direct to Consumer

direct-to-consumer

Thinking of dipping your toes into the direct to consumer waters?

You’re not alone.

Merchants who sell everything from razors to pet food to mattresses to meal kits have seen the writing on the retail wall.

In fact, according to IAB’s popular new study, The Rise of the 21st Century Brand Economy, the future of retail growth comes from direct consumer relationships.

The challenge is, large corporations don’t know what to do.

If your brand wants to win the direct to consumer game, you can’t just efficiently fill orders, you need to expertly fulfill the modern expectations of customers who place those orders.

Today we’ll explore five essential elements your brand needs to know for going direct to consumer.

  1. Why brands are going direct to consumer.
  2. Which customer expectations are changing.
  3. How to design and optimize your website and its marketing.
  4. How to integrate other business operations accordingly.
  5. What to measure for success.

The water is cold and the waves are choppy.

But we’re here to help you navigate your course along the direct to consumer journey.

What Does Going Direct to Consumer Mean?

Direct to consumer means you are selling your product directly to your end customers without third-party retailers, wholesalers, or other middlemen.

Why Brands are Going to Direct to Consumer

The writing is on the wall.

Ecommerce has changed and it’s continuing to change.

The model of the multichannel retailer is failing, and it’s falling apart because the margins are small.

Foot traffic has continued to diminish in the traditional sense.

Customers are buying more and more things online and are buying fewer goods from traditional physical retailers.

This trend hurts legacy brands whose primary channel of selling products has been through stores like Bloomingdales and Macy’s, stores that have been struggling and even closing many locations lately.

It shrinks the overall business, both for the brand and the wholesaler.

The scary part for legacy brands is, now they have to compete against all of these hip upstart brands that are digitally native.

You’ve seen the ads and read the articles about retail darlings like Harry’s, Casper, Blue Apron, Bonobos, Barkbox, and Warby Parker.

Customers have come to expect, and demand, buying directly from a brand, no matter what they sell.

Your Next Step: Answera These Questions for Your Brand

  1. Which digital native brands are disrupting your legacy business?
  2. What might you learn from them?

That’s the attraction for legacy brands going direct to consumer: taking back control over how their brand merchandises and messages its products.

Especially if their products have a unique selling proposition.

They don’t want to rely solely on the stores to put the products out in the right places for the right people, or for the local sales reps to be educated about it.

The other upside is, brands who go direct to consumer take ownership over their most important assets: Their customers.

Currently, someone might be a customer of Macy’s, but not a customer of your brand.

Which means your brand isn’t able to communicate with those individuals, email them with relevant updates, or own that relationship at all.

Ultimately, the lack of control is a huge loss for any organization.

Owning the customer relationship is what allows you to have much more leverage to increase customer lifetime value.

Your Next Step: Answer These Questions for Your Brand

  1. To what degree do you own your customer relationship?
  2. Does it give you the leverage to increase customer lifetime value?

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Which Customer Expectations are Changing?

Discount Electronics, a twenty-year veteran of the industry, was intentional about evolving their business to match their customers’ changing needs.

By updating their ecommerce platform to an on-demand, same day computer configuration, they began offering same day shipping.

Not to mention, made their web experience mobile friendly, secured PCI compliance, and integrated with Amazon Pay and ultimately deepened their direct to consumer relationships.

As a result, they increased revenue by 150% and average order value by 58%!

Lesson learned: if you have historically been a wholesale brand, you need to think long and hard about why a customer is going to change their behavior and buy something directly from your ecommerce website.

Is it the price?

Possibly, but price is a really dangerous game to play, as you might upset your historical business if you start pricing more cheaply.

Yes, you need to at least be aware of price, because if someone searches for your product and the first thing that comes up under your website is Bloomingdale’s selling that product for twenty percent less, it’s going to be really hard to convert.

Here’s the big question: What entices customers to buy from websites versus traditional retailers?

For starters, customers connect to more products, whereas some retailers won’t always have every item in stock.

Next, direct to consumer takes advantage of impulse buys.

Stores can leverage that better online because now a shopper has the chance to connect with the brand whenever they want, throughout their day, on their terms.

And brands can proactively connect with them through email, push notifications, and so on.

Also think about direct to consumer in terms of opportunity costs.

From a financial perspective, now the store can hold less inventory. You can cut costs and keep the same margin.

And from a time perspective, direct to consumer saves the customer the hassle of physically going to a brick and mortar location.

Common Customer Buying Motivators:
  • Exceptional service.
  • Engaging marketing campaigns.
  • Exclusive SKUs.
  • Narrative-driven copy.Unique or useful packaging.
  • Email marketing with deals and promos.
  • Liberal return policy to compensate for the inability to see products at the point of sale.

How to Design and Optimize Your Store and Its Marketing

Your company needs to launch an online store that is cost effective but still serves the direct to consumer needs.

Here are several strategies for doing so.

The first key to get right is modeling your site in a way that makes searching, finding, and buying a product easy and quick.

Make their site visit memorable enough to encourage repeat visits. But don’t do so at the expense of usability.

You need to put a shopper a situation where they’re used to the experience.

They’re getting the information that they need to get, and it’s happening in a way that they’re satisfied enough to make this purchase online.

The experience needs to bridge the little mental gap of not having the product in the customer’s hands where they can touch, feel, and try on your product.

Anytime you’re getting too experimental on that front, you’re getting far, far away from that journey.

Andie Swim is a great example of matching site design with expectation.

This women’s swimwear brand made serious waves in their first season online.

Not only by making high-quality products, but also by closing the “try before you buy” gap.

Thanks to the partner integration with Rebilla, customers can now place a 3-4 week hold on credit cards while they try on the swimsuit and send it back.

Less friction led to 1000 orders in the first three months and a 200% increase in conversion rate.

Another lesson learned: Make sure each of the products on your site has a gallery of at least four or more images.

Remember, ecommerce is a puzzle.

The gap you’re trying to bridge is the fact that the product is not in their hands like the traditional shopping experience.

Ultimately, everything you’re doing is bridging that gap so that the product seems like it’s here.

Users might be sold visually and informationally before they get to the product page, but you have to bring the sale home with compelling and comprehensive visuals.

Don’t waste valuable real estate of your website with too many brand images, taglines, and other company assets.

Make the shopping images the heroes of the page.

How to Integrate Other Business Operations Accordingly

Clearly, going direct to consumer will affect multiple operational issues at your company.

Here are several elements to think about.

From an operational side

Legacy retail brands in the past would not have really needed to have much of a technical team.

They would do some quick web dev, but these days they will need much more customer facing customer support.

And it’s going to expand past what they previously had. Plus, now you have to handle shipping and logistics.

It’s one thing to send massive orders to your warehouses for the suppliers.

It’s another thing to set up an efficient system to go directly to consumers.

For this, you can partner, or you can build out the distinct network yourself.

From performance marketing side

Brands must also now shift the basics of how they think about channel roles.

For example, what’s your customer acquisition strategy? What’s your customer lifetime value model? And, how will you answer these questions if you lack enough historical customer data as a baseline?

The answers to these new questions might mean relying on others to establish baselines to forecast and plan budgets accordingly.

From a branding side

Legacy retailers have to think more critically about the way they tell stories around their products.

They should be crafting and contributing to their brand narrative every two weeks.

The ideal place to begin this story is by looking at what your differentiator is.

To pinpoint it, here’s one question we challenge our retail clients to ask:

Who is the kind of person that, if they had this product, and you took it away from them, would feel some sort of pain?

You have to put yourself in the shoes of someone whose life would be improved by your product.

Whether it’s a new product line, a big sale, or some other kind of promotion, direct to consumer brands should be constantly phasing their launches so they’ve always got something new to talk about.

From a service side

You have to think about customer loyalty.

Wholesalers who go direct to consumer used to have to rely on the retailers to foster loyalty.

But now they have to do that work themselves.

As such, design and expand your email marketing program with loyalty in mind.

A big portion of your email marketing program should be on creating more loyal customers out of people who are currently on your lists and increasing the value of those people.

That means putting triggers on all kinds of automated email flows that are designed to get people to purchase, purchase again, share your brand, and coordinate with your other channels.

What to Measure for Direct to Consumer Success

Last, but not least, our favorite topic: Leveling up your measuring game.

In the past several years, enterprise and legacy retailers have been making decisions based on quantifying the wrong metrics.

For example, many companies aren’t tracking online to offline for Facebook ads.

That is a huge missed opportunity to clarify attribution.

But the problem is, marketing executives have been sold on the value of soft KPIs like brand lift and how many people are using hashtags, but not revenue.

Those metrics certainly have their place and should not to be ignored, but it’s not where you should focus your time if you really want to make a significant direct to consumer play.

That’s why many legacy retailers are getting their clocks cleaned by direct to consumer companies.

Those scrappy startups have to be lean or they lose. The stakes are higher for them and there’s less margin of error.

In fact, depending on the size of the legacy enterprise, there would have to be a real cultural shift around data strategy.

Now, even if your company doesn’t have that level of resources, the basic philosophy and practice around measuring still applies.

Don’t have old legacy KPIs driving your direct to consumer brand.

It’s simply a different set of skills and different things you should measure.

The truth is, most legacy brands are used to looking at metrics like impressions and reach and frequency.

These are noisy numbers, and they easily pull marketing executives in their direction.

But measuring engagement doesn’t necessarily always translate to dollars and cents.

Brands must get used to the fact that the ecommerce KPIs that should focus on include:

Then, build your funnel around those metrics.

It’s a whole new kind of mindset that certain companies may not have a history of embracing.

Okay, one final issue around measurement.

As a performance marketing agency, we’ve found that it’s easier to track marketing effectiveness and treat it as a profit center.

Our clients know exactly what percentage of their spend goes to which channel, and how effective each of these respective channels is.

Whereas, if a customer bought something through a wholesaler, there would be no way to know why or how.

Did they click on a Facebook ad? Were they remarketed via Google Search? What kind of conversion rate did we get?

There’s no way to tell.

And remember, if you can’t measure it, you can’t optimize it.

Executive Summary

Whew! Told you that direct to consumer ocean was cold.

But you’re not alone, and it’s not too late.

There has never been a better time to evolve your customer relationship into a more direct one.

If you focus on finding the right vendors, technologies, and partners to help you implement these marketing strategies and tactics, your retail ship will set sail into profitable waters.

Want more insights like this?

We’re on a mission to provide businesses like yours marketing and sales tips, tricks and industry leading knowledge to build the next house-hold name brand. Don’t miss a post. Sign up for our weekly newsletter.

Source of this (above) article: https://www.bigcommerce.com/blog/direct-to-consumer/

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