Direct-to-Consumer (D2C) strategy is quickly becoming a popular method for manufacturers and CPG (Consumer Packaged Goods) brands to get into the market directly instead of using a middleman company.
The surge in e-commerce due to pandemics over the past two years has brought an era of Direct-to-Consumer (D2C e-commerce) brands.
While the obstacles to joining the scene as a start-up D2C brand are fairly low, you must keep in mind that you will compete with retail giants such as Amazon or Walmart that have already built an enormous customer base.
That’s why it’s essential to have a plan to help you establish yourself as a brand that can challenge the existing norms.
Table of Content
- 1 What Is Direct to Consumer Marketing?
- 2 What’s a B2B business model?
- 3 Benefits of D2C
- 4 5 Strategies For D2C Business Model
- 5 D2c example
What Is Direct to Consumer Marketing?
D2C businesses differs from conventional B2C (business to customer) in that the manufacturers sell directly to consumers through D2C the other way, whereas B2C generally depends on retailers stepping between the manufacturer and their customers. In conventional B2C models, intermediaries (think Walmart) typically sell items from several manufacturers. Customers are offered a range of options, meaning that a single manufacturer cannot control the choice of their product over that of a competitor. This absence of control is reflected in the overall interaction with customers, their experience, and the brand positioning that retailers manage instead.
Direct to Consumer marketing allows companies to offer a complete brand experience since they have control of the entire process. The company is accountable for creating a successful product in the first place, then attracting and marketing it to its customers effectively and delivering the product or service, and controlling customer interaction and experience. Direct communication with customers from start to finish implies that companies can gather customer data and address any issues without being altered through intermediary retail.
What’s a B2B business model?
B2B or business-to-business model is when manufacturers sell their services and products to other companies. The customer base of B2B businesses is limited and usually very narrow. Some B2B eCommerce platforms instances include BigCommerce, Contalog, Amazon, Salesforce, and many more.
B2B producers or other older business models typically market their items in bulk, whereas D2C eCommerce demands that companies sell one product or a few or a direct to customers.
Benefits of D2C
Increase control & customer engagement.
The traditional manufacturer-retailer relationship leaves little room for manufacturers to control their brand. Although they control their packaging and other marketing actions once the product is given to retailers, the manufacturer cannot influence sales, build a relationship with customers or collect data. As a result, manufacturers might spend a great deal on marketing. However, it’s the retailers who sell the product to the customer.
Provide a customer-focused shopping experience
B2B companies typically offer ready-made products to other businesses. They adhere to a prescribed procedure to create a standard product for their customers. With the D2C approach to business, producers can offer multichannel buying channels, increase the customer experience (online and physical), track consumer behavior, analyze trends in the market and collect feedback directly from customers to provide custom-designed products to customers who are.
Increased market Opportunities
Manufacturers are no longer limited by location when it comes to selling D2C. Instead, they can simply expand their reach by selling to the appropriate customer segments within the market.
Adopting the D2C strategy is advantageous both from an operational and financial perspective. It is, however, an excellent idea to design prospective plans to ensure that the strategy is constant in providing what customers want. It is, therefore, crucial to constantly alter the model to adapt to the changing demands of the consumer and to grow well in the near future.
Apart from staying in the same ways, a further reason that many of the older CPG brands avoid innovation is the sheer dangers associated with it. On average, a product launch can last from 18 to 36 months. It’s the time from the beginning to the product hits the store floor. This is quite a long work and energy for the older CPG brands.
With D2C, the manufacturers can reduce the risk of being able to introduce a brand new product at a lower scale. Instead, manufacturers can design a product, test it in the confines of a small group and then gather their opinions. This allows large manufacturing companies to know the things their customers like and dislike about the product, allowing them to adjust the product as the need arises.
5 Strategies For D2C Business Model
1. Good use of reviews and testimonials
Word of mouth is an effective tool for any company; However, D2C relies on its loyal customers. Collecting testimonials from satisfied customers and then posting them on advertisements and social media landing pages, product pages, and other pertinent places. These reviews and testimonials must be extremely friendly, which will draw in potential customers.
2. Centralize data under a single platform
Your customers leave their digital footprints across various platforms like websites, social media, and other websites. So if you’re planning to adopt a D2C method, you have to gather all the information about your customer across all touchpoints in one place. This is how you will be able to understand their habits and segments to tailor their experience.
In the beginning start, you must purchase a CRM system that will help you organize your interactions with customers. Be sure to have all the relevant information in the one system to link all the data together and create a meaningful relationship with them through their journey. Combining all of the information into one place will allow you to create a smooth and seamless experience for your customers throughout all platforms. Most likely, you will use automated tools such as those used by MoEngage, to make a customized experience for your customers through all the channels.
3. Reach the target customers
Marketers can utilize SEO (search engine optimization) and PPC (Pay-per-click) ads to get their message to the right audience in different ways. First, marketers can study the words and keywords they employ to determine what customers want. Then, marketers can design ads that use these terms. First, marketers must be aware of what they’re offering. Then, they can target customers to remain at the top of their minds.
4. Creative Ad Placement
You can take this approach to the next level by making your presence visible in other areas where you know where your audience is. For example, you could use keywords that your competitors might be using or that are a little off-topic but are still relevant to the keywords that your audience is looking for. This disruptive strategy works very well for D2C brands when it is done in a creative way and with great sensitivity.
While it’s not D2C However, you’ll see this often in the world of technology and software brands. Here’s an illustration.
5. Create a systematic process
If you decide to shift from your traditional retail model to D2C, then you must make a few adjustments to ensure that your operations run smoothly. Be aware that there aren’t middlemen with this model. Start by redesigning your current processes, methods, and systems, and ensure that your employees are trained in order to accommodate the new ways of working.
For instance, you can no longer depend on retailers to resolve your customer’s issues, and you must teach your employees how to respond to the questions directly. From creating logistics that allow you to contact your customers directly to revamping how you acquire customers and build loyalty programs, make sure that your customers can interact directly with you instead of having to rely on middlemen. By using the appropriate tools and a plan, you’ll be able to move to this new approach successfully.
6. Offer something different
This is an important process to take for D2C brands. If you plan to market a product directly to customers, they must be given the reason for there to purchase.
Sometimes, a lower cost or a distinct brand image could help customers select your business over Amazon or the mall, the drug shop, and Target.
To gain an audience for the D2C brand and gain enough momentum to sustain its sustainability, you have to approach the market completely differently.
There is the majority of D2C companies; this might refer to a monthly subscription, similar to the coffee mentioned earlier. It is possible to enjoy the ease of not rushing out of the product you need.
You can also provide an innovative approach to your clients
The lifestyle brand supplied us with fashionable, low-cost, and premium consumer electronics. Founded in 2016 by Aman Gupta and Sameer Mehta, BOAT has been positioned to be a fashion brand that sells trendy consumer electronics. The goal was to provide inexpensive, durable, and stylish audio equipment and accessories to the millennials.
The revenue for FY 2020 was around Rs 500 crore, an increase of 108.8 percent from 239.44 crores in FY 2019, and the most impressive part is that the company has been successful for five consecutive years.
Mamaearth aims to address the most typical Indian parenting issue through its new products.
In a nation where the majority of baby products available on the market are laden with toxic chemicals that can cause toxicity to the body of a newborn. Mamaearth offers safe, cruelty-free, and natural products in line with international standards.
The company has been able to increase its revenue to Rs. 112 Cr during the fiscal year 2020, up from 17.9 Cr in FY19. But despite its strong year in FY20, its costs were up by almost the same pace to 117.9 Cr From 21.6 Cr.
As mentioned earlier, the American brand revolutionized the rules of its own field. Companies such as VisionExpress, Boots Opticians, and Specsavers held the lead in the market for many years. They were able to market the product (frames) from other businesses. The company was established in 2010. Warby Parker has made buying glasses online possible and practical.
It’s still the standard for Direct-to-Consumer (DTC) brands.
HIMS & HERS
HERS is committed to solving women’s health and wellness issues and is the parent company of HIMS.
HIMS & HERS are two fantastic packaging examples and is one of the most popular brand names in D2C within the cosmetics sector.
HIMS is a men’s health clinic that focuses on problems with hair loss, skin irritations, and even Erectile dysfunction. The treatment is delivered in a straightforward approach and is accompanied by an uncluttered style.
From the D2C perspective, HIMS is an illustration of branding that is outstanding.
The business makes excellent use of its stunning aesthetics and minimalistic style. In addition, its gentle approach to intimate and sometimes uncomfortable situations makes it an incredibly human company.
As a D2C company, HIMS wants to participate in the conversation and be a real aid – not just selling products.
Belts do more than just keep your pants in place. That’s what the Beltology’s founders Beltology felt when they launched their online store! So they set out to design belts that were not a way to get there and developed a digitally-driven experience that allows you to locate the belt you’re looking for.
Although you will need to be reimbursed for any returns made, Beltology gives you 100 days to exchange or return your item. Beltology can be followed on Beltology through Twitter @Beltology, Instagram, and Facebook.