Branded manufacturers are often considering direct-to-consumer (D2C) e-commerce to improve sales margins, increase product control and improve relationships with their customers, says a recent report published by Forrester. What should they look out for when going into the D2C jungle?
Each approach has its own pitfalls and benefits. In any case, brands need to be prepared. If complete ownership of the customer experience, access to new target customer groups and raw data is the aim then shifting to a full, end-to-end e-commerce solution could be the right path.
However, enabling full e-commerce will likely mean having to work with a complex mix of vendors or entering a full-service partnership (fulfilment), if a brand is to successfully build the systems needed to deliver a minimum viable service from scratch. Additionally, there is the setup and running costs to consider.
No matter which route a brand chooses, there will always be challenges. In this article we summarise the challenges and plot a path out of the jungle
E-commerce challenges for brands
Usually, the branded manufacturer is used to manually processing a relatively low amount of large, infrequent orders. Moving to e-commerce will multiply the amount and reduce the size of orders. This will result in the brand needing to implement rules-based processing to keep everything running smoothly.
Pricing models and strategies will need a lot of consideration and might have to be changed from monthly or seasonal to ones that will need to be closely monitored – almost hourly. Getting this right is a tricky business, but if done well, brands can benefit greatly from it.
Customer service capabilities will most probably need to be upgraded, from essentially a support role for the branded manufacturer’s retailers to providing direct customer service to deal with consumers – at significant scale. Aside from the cost, this is a risky area because the brand will be expanding the customer experience in a service that might or might not play to their strengths. If it is, then brands will already be ahead of the curve. This will lead to reviewing areas such as IT infrastructure, especially data storage and data security capabilities.
And while a branded manufacturer is likely to have strong branding and marketing skills in-house it will need to bring in, or develop, a range of the new skill sets when starting to sell D2C.
“Branded manufacturers may choose to develop partnerships to launch D2C eCommerce capabilities faster, but over time these organisations will want to bring capabilities in-house as they develop skills and resources internally.” – notes the Forrester report.
Getting this right, might benefit a brand greatly. But considering the challenges that need to be overcome, it will be a daunting task for any brand to go down this route.
Alternative to enabling full e-commerce
Many major brands, such as BaByliss, Kärcher, Lenovo and more, are working with Hatch on an alternative route to implementing full e-commerce. Through an intricate network of links and product feeds, Hatch’s Where to Buy solution is providing these brands with a complete set of e-commerce capabilities by simply adding ‘buy now’ functionality to their digital touch-points – such as product information web pages, digital campaigns, Google Ad banners, newsletters and more.
The ‘buy now’ button is connecting their customers with relevant product pages on retail partner websites. Clever features allow brands to display or hide additional retail information alongside the retailer’s name, such as accurate prices and stock availability.
Hatch’s Where to Buy Online solution reduces time-to-market and lowers the implementation and maintenance cost. But most importantly, it provides brands with all the customer journey sales insights they will need to make better and faster strategic marketing decisions. Branded manufacturers can now enjoy all the benefits offered by a D2C e-commerce platform, without the investment and logistical headaches associated with setting up and maintaining one.