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29/01/2021 | Direct to Consumer, eCommerce, D2C,

Is Direct to Consumer (D2C) the right strategy for my brand?

Our last blog took a retrospective look at the growth in eCommerce during 2020 and identified changing consumer behaviour in increasing propensity for online shopping as an alternative or in addition to traditional shopping. In this week’s blog, we take a look at the considerations before launching a direct-to-consumer (D2C) brand proposition and ask is D2C the right strategy for every brand?

What are the benefits of your brand having a D2C strategy?

  • Stronger brand loyalty, more autonomy allowing you to provide a better service and support to your customers.
  • Expanded market opportunities, allowing your business to go global and reach a wider target audience.
  • Higher control over the customer experience, allowing your brand to shine.
  • Equally, if you already have a brand website or social media presence your shop can easily be integrated on your current website and incorporated into your social media advertising.
  • Repeat purchasing
  • Collating customer data

Key questions to consider:

What is the average frequency and volume of purchase?

This will determine how often a customer would order and what a typical order may look like. Is it a product that customers frequently purchase regularly at a  brick and mortar store, that could also be easily posted directly to your loyal customer?

For example, customers purchasing essential care products such as incontinence pants will have an ongoing need, not just place an order for a special occasion. This particular example is ideal for a subscription ordering / fulfilment model as discreet packaging allows the order to be shipped directly to the customer, avoiding any possible embarrassment in bricks & mortar retail.  

Taking this a further step, bundle offers can be created to incentivise higher volumes over fewer deliveries, minimising repeated handling and despatch costs and free delivery can be offered for orders over a minimum value – thereby encouraging customers to spend more. For example;

Offer A – 60 incontinence pads delivered each month for £60 plus P&P of £2.99

Offer B – 180 incontinence pads delivered each quarter for £144 (saving 20%) with free P&P

Disposable razors are the perfect example of a product that needs to be replaced regularly. The Dollar Shave Club1 identified a gap in the market for a low cost, a disposable razor to be ordered via subscription – with the added benefit that the products are lightweight and relatively small, allowing them to benefit from low-cost despatch options.

What is your product range:

  • Weight and dimensions?
  • How fragile is the product?
  • How is the product packaged for retail?
  • What is the quantity of products per outer carton?

As a general rule, if your product(s) are lightweight, small, non-fragile, and can be easily packaged up for distribution, it is certainly time to consider implementing a D2C strategy. 

Yet, even if your product doesn’t fit all the above there are many exceptions which can flourish with this strategy. Such as brands which manufacture low value and large or bulky products may be put off with the additional despatch costs in proportion to the product value. Although if this item is bought on a regularly basis is may be suited to be bought in bulk. 

For example, products such as toilet paper, that are overly bulky yet purchased on a regular basis – are greatly suited to bulk subscription offers. By doing this, a brand can optimise the quantity per ‘bundle’ to benefit from maximum weight and dimensions with their chosen despatch provider and also keeping a customer’s loyalty to their brand.

Further questions to think about:

  • What is the quantity of products per outer carton?
  • What are your ‘normal’ channels to market?

Optimising the quantity of items per outer carton in terms of customer offer allows you to minimise your handling and packaging costs – typically outer cartons are required to be robust, meaning minimal extra packaging is needed to allow the items to be despatched via a carrier. The exceptions to this rule are products that contain liquids or items classed as ‘hazardous’ by carriers, that require outer mailable polybags to ensure no spillage can occur during the delivery cycle.

Do your customers regularly purchase your brand in store because they have no options to purchase online? Take an overview look at your market share and your competitors, have any tried to sell online? Also why not take it a step further and take a quick look globally to see how your compeitiors in other countries are doing? Although they may not currently be targeting your customers the world is getting smaller with companies branching out and extending their reach across the pond and they might surprise you with their latest innovations.  

When is the right time to implement a direct to consumer strategy?

With it being forecasted that online sales are predicted to continue to grow world-wide it’s not too late to incorporate a D2C consumer strategy. Not only can it create further customer loyalty, it can assist in boosting your target reach and profits.

If you would like support or advice on how to implement a direct to consumer strategy don’t hesitate to get in touch with Mel at Melanie.Sheldon@mrm.co.uk or call 01858 414 777.

1.       https://uk.dollarshaveclub.com

2.      https://www.statista.com


 

 

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