How brands can create opportunity through direct-to-consumer channels

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By Ted Rogers, chief marketing officer, Digital River

The coronavirus pandemic has irrevocably altered the retail landscape. While traditional channels may rebound to some extent, what’s true before COVID-19 is only more critical now: Moving forward, brands must offer customers diverse buying options. In order to build brand loyalty, own the customer experience, and control their destiny, both B2B and B2C brands need to build a strong direct-to-consumer e-commerce channel. Here are five tips for optimizing your company’s DTC strategy.

Seize the moment

As much pain as the pandemic has caused, it has also created an opportunity for companies to reexamine their e-commerce strategy. Now is the time to do the deeper analysis that’s necessary to improve and optimize the business, and most importantly, learn about your customer. In truth, you may not have much choice. With revenue from traditional channels down significantly for many brands, leaders need to find new and better ways to engage customers and drive sales.

Go to customers directly

In the scramble to shore up declining revenues and engage with new customers quickly, brands might consider pivoting to sell through major online retailers. A retailer can be a great channel to bring your products to market without having to create a fully developed e-commerce destination. However, the current need for these retailers to prioritize shipping essential goods has left many brands without a viable option to get their products to customers.

During the current pandemic and beyond, over-indexing on a third-party retailer means that your shopping experience, delivery process, and even the packaging are all controlled by another company. This means that customers form emotional connections with their brand, not yours. Being able to own that customer experience, control the buying journey, and gather crucial customer data to form new business insights are all reasons why a DTC e-commerce channel is critical for any brand selling in the market today.

Eliminate channel conflict through strategy

For some brands, channel conflict continues to be a concern. But with global e-commerce sales expected to reach $4.5 trillion in 2021, the opportunity presented by direct e-commerce justifies the need to move past that conflict. So, as long as you aren’t trying to undercut your retail partners and instead approach your e-commerce strategy as a level playing field, you can largely avoid disrupting important partnerships while capturing new market share.

Remember too that traditional channels will rebound eventually. The landscape may be altered significantly, but they will come back. If you leverage your DTC e-commerce channel effectively, you’ll gain valuable customer insights that will empower better shopping experiences through retail partner channels when they return. With omnichannel shopping experiences being the way of the future, the need to move past the fear of channel conflict is essential for long-term success. The truth is, a rising tide lifts all boats.

Focus on what you do well

The best way to execute a successful DTC e-commerce strategy is to concentrate on the areas of your business where you do exceedingly well so you can continue to deliver on your brand promise. You likely have expertise in customer-facing experiences like product positioning, pricing, merchandising, and customer experience. But you may not have as much proficiency in back-office processes like fulfillment, payment processing, regulatory compliance, and tax remittance, especially if you’re selling on a global scale. Trying to do everything for your new DTC channel will likely lead to inefficiency, make upgrade paths more difficult, and ultimately slow down your time to market. Choosing reliable partners that have expertise in their space will help you go to market faster.

Optimize back-office processes

Speaking of back-office processes, these operations are just as crucial as your e-commerce store UX when it comes to providing outstanding customer experiences. They can also be extremely complex, especially for brands that are new to DTC. For example, transitioning from selling products on wholesale pallets to a single item SKU basis presents a big challenge for accounting and shipping departments. In order to account for economies of scale and compete with major online retailers, brands need to involve in-house accounting, finance, and logistics personnel early in the channel strategy development process. Their buy-in is critical as you look for ways to deliver exceptional customer experiences in your DTC channel.

For brands, a lack of control over the buyer journey can lead to business disruptions. In today’s competitive market — one that’s been rocked by COVID-19 — such disruptions can be fatal if not approached strategically. Use the current business environment as an opportunity to reassess your e-commerce strategy and build a robust DTC channel. This is the best way to position your company for success now and into the future.

As part of its Uncertainty into Opportunity series, Digital River and its sponsors are hosting a live virtual event on June 17, Know your audience and uncover new opportunities: How to market your online store.

Register here to learn more about improving your brand’s e-commerce strategy.

This post was created by Digital River with Insider Studios.

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