The retail scenario has shifted: consumers are increasingly pushing for deeper meaningful connections with the brands they use. People want to buy what they love and do it directly, with no middlemen involved.
In fact, according to a Youwe agency report, in 2022, 64 percent of digital consumers worldwide were already buying their branded goods directly from manufacturers regularly.
That’s around 1.7 billion people, an increase of 15 percentage points compared to 2019. With all this activity, if you’re a consumer goods manufacturer, then it’s worth considering a Direct-to-Consumer (D2C) approach.
This trend clearly shows that a D2C approach is the right move forward into the e-commerce future.
That’s why today, we would love to review why taking your business Direct-to-Consumers is the smartest choice for the future of your brand! And we will do so with the help of the Youwe agency ebook, A comprehensive guide to taking your business Direct-to-Consumer.
First, it is not like we are reinventing the wheel; D2C has been here for at least since 1990. So this is nothing new. And yet, it is booming again. Why?
Our current omnichannel global retail landscape has turned D2C into a profit-generation option for many brands. And the option that comes paired with multiple benefits, besides the much-needed ‘money making’ aspect of it.
And how much of a profit option, from the money perspective? Well, let's address that part first before we jump into talking about the benefits a D2C model can offer to any brand:
According to Youwe ebook, in the UK alone, retail e-commerce sales - as a share of total retail trade - increased from 19.2 percent in 2019 to 28.9 percent in 2021.
And the Netherlands, over the same time period, the shift was from 15.3 percent to 23.9 percent, a shift also felt in Germany, where 14.2 percent jumped into 21.9 percent, and in France, that went from 9.7 percent to 14.6 percent.
And this is happening due, precisely, to the combination of benefits that D2C provides to brands all over the world. Benefits we could surmise into four clear areas.
The customer is king. And nowadays, having an excellent customer experience is vital for any wishing to be a successful brand. And to achieve a high-quality customer experience, a personalized customer journey is of paragon importance.
Now, this is something that any brand can do if it harnesses the power of purchasing, usage, and customer preferences data that will flow your way with D2C.
A dialogue is always better between two. If you add extra voices, the complexity of the process increases exponentially. That’s why the D2C approach allows brands to communicate directly with their customers, reducing possible noise produced by others who might obscure your brand or affect how your customers perceive you.
This is where it all starts to get interesting. When you have the correct data, delivered through your shiny new D2C platform, you can react faster to market demand. Pick your most profitable demographic, gather feedback, and tailor your product and messaging to market demand.
It’s easier to make faster, more accurate decisions with all the answers at your fingertips. And that makes you more agile than the competition, with more opportunities to modify your products to meet and exceed consumer expectations. You’re responding faster, anticipating market changes, and bringing new, relevant, targeted products to market before your competitors.
Overall, the capacity to sell directly online to your customer base is crucial nowadays. The Covid crisis proved that even in quarantine in our houses due to a massive global pandemic, we still shop. In fact… some would argue that people bought even more things during the Covid crisis than what they do on a regular basis.
But, if your brand cannot sell directly to the consumers online, you will never tap into the massive e-commerce B2C current market. A market that is slowly evolving to become the main form of global commerce.
Now add to this the fact that, by implementing a D2C approach, your brand removes the middlemen distributors. You can see how this is an increasingly popular option for brands worldwide who wish to increase their profitability.
Now that we know D2C is a fertile ground for brands to grow in, we need to answer the question: how do we do it? And in this department, we are happy to report that Youwe agency has a pretty straightforward and clear approach to help your brand successfully jump into D2C.
What’s their secret strategy? A PIM.
When planning a D2C strategy, or any digital transformation, there’s a crucial element that often gets overlooked. We’re talking about Product Information Management (PIM) and the systems that allow product data to be shared across a business. And this, as Youwe clearly indicates in their ebook A comprehensive guide to taking your business Direct-to-Consumer is one of the first vital steps you need to take to jump into D2C.
Now, what exactly is a PIM? Well, to explain this, we need to refer to the way brand usually hand their data. Probably, your product data is contained within your enterprise resource planning (ERP) system or master data management (MDM) system.
You could also refer to it in Excel spreadsheets, sales documentation, InDesign files, and individual product specification sheets. The role of Product Information Management. If data is exchanged frequently between your systems, with no proper tracking, things can get out of control.
Data entry errors often arise as a manufacturer potentially manages thousands of SKUs. Incorrect or incomplete data can be sent across selling channels and platforms, confusing your audiences, delaying your time-to-market, and impacting profitability.
Data becomes inconsistent and unpredictable when you don’t have a single source of truth, and nobody holds a definitive version of all your product information.
Duplication, disjointed modifications, and data disarray become inevitable. With D2C and your closer connection to consumers, the problems can be amplified. Your IT landscape needs to be set up correctly, and all your systems must be connected. That’s why you need a PIM.
But keep in mind a PIM is one of many things you need to develop a successful D2C approach.
While pursuing this, your brand will surely have to tackle issues like gaining a competitive advantage in the e-commerce global and regional marketplaces, balancing wholesale and D2C, facing the dilemma of D2C expansion as a possible competition to your wholesaling and reacting accordingly to the customers accelerating demand in the sometimes complex D2C markets.
So, it is indeed a handful of things that you must muster. But the good news is that precisely to topple that complexity and offer a cohesive step-by-step guide into D2C, Youwe has created this fantastic ebook to provide you with all the on-spot insights.
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