Consumer brands have been seeking to establish direct relations with end customers for a range of reasons. For example, to generate deeper insights about consumer needs, to maintain control over their brand experience, and to differentiate their proposition to consumers. Increasingly, they also establish these relations it to drive sales. McKinsey explains how consumer brand can get D2C e-commerce right.
The COVID-19 outbreak has accelerated certain business trends, including the massive consumer shift to digital channels. In the United States the increase in e-commerce penetration observed in the first half of 2020 was equivalent to that of the last decade. In Europe, overall digital adoption has jumped from 81% to 95% during the last few months. Thus, for any brands that have considered establishing a direct-to-consumer (D2C) channel in the past and decided against it, now is the time to reconsider.
Most consumer brands have a limited experience with direct consumer relationships and e-commerce. This is because the majority of consumer brands are used to selling through intermediaries. As a result, they often hesitate to launch an e-commerce channel despite the opportunities it offers. 60% of consumer-goods companies feel even moderately prepared to capture e-commerce growth opportunities. Consumer brands can overcome their concerns by having a deliberate strategy.
Leading brands thoughtfully consider their revenue goals for D2C and ways to best to meet them.
Best-practice companies manage all elements of the online shopper journey to keep the costs of D2C in check.
D2C requires a wide range of specific capabilities in addition to a compelling consumer offering. These include technology, operations, data and analytics, and an agile operating model. The common denominator is customer centricity.
Before investing in technology or hiring an agency to build the website it is necessary to clarify the following. It is important to force clarity and assess relevant trade-offs, such as linkages to other channels and existing channel partners. In addition, D2C requires a clear view of assortment and pricing as part of a broader channel strategy. Furthermore, brands do not have to do all the heavy lifting alone. However, they will need to weigh the trade-offs of buying, building, and partnering extensively.
There are multiple ways for a consumer brand to begin the D2C journey. Brands that are just starting with e-commerce, using online marketplaces and established apps can be effective ways to learn about what works well online. In the other hand, other brands that are more digitally mature may want to scale their online presence to engage consumers and generate insights on what works well but hold off on launching e-commerce. Shopper behavior is changing quickly. Thus, brands will need to move with urgency to determine how best to connect with their customers online.
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.