A new report from Forrester Research takes a detailed look into what branded manufacturers need to know when choosing a digital commerce strategy to sell direct to consumer (D2C).
With consumers becoming ever more digitally connected branded manufacturers are tempted by D2C commerce. Direct to consumer strategy can improve sales margins, give more control over the brand’s products and enhance customer experience online.
However, online consumers are also getting savvier and more discerning. Meaning that a brand wanting to sell direct to consumers online has to work hard to meet their growing expectations or face losing out to competitors.
The Forrester report points out that while not all brands ‘need to implement fully fledged D2C e-commerce,’ some form of D2C is ‘helpful for every brand’.
The four main D2C strategies and what to look out for:
1. Direct subscription
Some brands offer subscription services either directly or through a partner like Amazon. Going down this route, a branded manufacturer develops a recurring customer relationship. This way it can quickly gain consumer insights and better understanding of sales triggers.
The key limitation of this approach is that not all products and services are suitable. Furthermore many customers don’t like feeling tied down to just one supplier.
2. Brand presence in marketplaces
Many brands cannot resist the substantial market reach offered by major retailers – such as Amazon, eBay and others – and set up branded stores on those platforms. This way a branded manufacturer can leverage the processes, the know-how and coverage of the world’s largest online retailers for their benefit.
However, through this route the branded manufacturers risks losing control of product information. It also effects store visibility within the marketplace, customer experience and product sales data. Also, the branded manufacturer becomes increasingly dependent on the retailer platform, which can be problematic.
3. Full e-commerce
Enabling full e-commerce means having complete control and ownership of the entire e-commerce process. This gives brands far more control of the customer experience, while providing them with exclusive access to customer data. This allows for an unrivalled ability to collect and act on customer and sales insights.
There are a few downsides to this approach. The brand will need to manage a mix of vendors. Brand can also enter into a full-service partnership which will require a substantial start-up investment. For example – IT and e-commerce fulfilment infrastructure. Additionally, continued investments are needed in skilled staff, innovation and maintenance as it seeks to compete with established online global retailers.
4. Where to Buy solutions
A more recent development identified by Forrester, is that brands such as BaByliss and Nescafé are choosing to work with Where to Buy solution providers such as Hatch. Where to Buy Online solutionprovide branded manufacturers with essentially the same benefits as a full e-commerce solution, but without the implementation cost and maintenance hassle.
By adding a ‘buy now’ functionality to a product information page or any other digital touchpoint, consumers are connected with the correct and relevant product pages on a retail partner website. They can also display additional retail information like real-time price and stock availability.
Other benefits of using a Where to Buy solution from a provider such as Hatch, is the global retail coverage and the detailed insights into customer journeys and retail sales performance displayed through a dynamic real-time dashboard.
Begin your own D2C digital transformation today.