In today’s world, buyers drive commerce. Most buyers choose to research their options online, check peers’ reviews, and alternative options before choosing to actually purchase a product, whether online or in-store. They are in full control over the buying journey and brands are pressured to offer an excellent shopping experience.
Selling online, directly-to-consumers is an appealing business model that has risen in popularity over the past years, but it has been especially accelerated by the Covid-19 pandemic. In this article we’ll discuss the top reasons why modern manufacturers choose to sell D2C, and why you should consider it too.
Table of Contents
1. Higher margins
Cutting out the middleman and selling online are two things that directly impact your products’ final prices, by allowing you to play with your margins. First of all, you get rid of the extra fees associated with selling through retailers or other middlemen. And secondly, you don’t need to spend money on running and maintaining a physical store, unless you choose to sell both online and via your brick-and-mortar stores.
You will have to consider manufacturing software that integrates all your sales channels – your ecommerce store, marketplaces (such as Amazon or Etsy), and your physical stores. You need new technology to optimize your business operations, reduce costs, and minimize waste, but the cost for that is substantially lower.
The D2C model allows brands to sell their products at the same price or even better price compared to retailers, which is appealing to the end-consumer. It is one of the most common reasons manufacturers consider adding D2C as a channel to their sales strategy.
2. Direct access to customers’ data
Customers’ demands have changed and the focus today is clearly on personalisation and customisation options. They expect to be able to “build” the product according to their personal specifications, so that means that you must be ready for made-to-order workflows. They also expect you to be aware of their buying patterns and offer choices based on their previous behaviour.
It’s crucial to map your customers’ journey and behavior on your website in order to be able to collect data. This data will empower you to deliver a personalized experience and meet your customers’ expectations. In addition to that, as a D2C brand, you also have the opportunity to engage directly with your customers and listen to their feedback. This means you’ll be able to gather data related to the reasoning behind your customers’ decisions, their thought processes, perceptions of your brand & product, as well as their complaints.
It goes without saying that gathering data is not enough, but the key is in acting on these insights and improving your business based on them.
3. Control over brand
When selling through retailers, manufacturers cannot control how their brand is presented to the end-consumer. You might have control over packaging and other marketing activities until your product is in the hands of your partners. After that, you cannot influence the sale, the communication with consumers, or have the opportunity to gather data.
Adding D2C to your sales strategy and learning how to sell products online doesn’t come without challenges. However, the potential of offering your product at better prices, gaing data from direct interactions with your customers, and controlling the way your brand is presented to the world are very appealing reasons to consider adopting this business model.