Before the Internet, sellers had to rely on retail stores to reach consumers. But in today’s digital age, many business owners leverage direct to consumer eCommerce to bypass the middleman, drawing a straight line between them and their buyers.
Direct to consumer (DTC) eCommerce is crucial to businesses of all shapes and sizes. You’ll build more meaningful customer relationships while maintaining control over pricing and branding.
Let’s unpack why DTC eCommerce matters for your business. What challenges will you need to overcome, and how can you build your business around a DTC strategy?
What Is Direct to Consumer eCommerce?
Direct to consumer eCommerce is when a manufacturer or brand sells its products directly to the end user. They don’t rely on a third-party retailer. For example, Levi’s can sell their jeans at JCPenney (the third-party retailer) or sell directly to the consumer via their online store.
Three key elements define the DTC model:
- Self-Managing Product Stock: When shoppers place online orders, the brand sorts, packages, and ships the product.
- Independent of Third-Party Retailers: You don’t rely on third parties to source or deliver goods.
- Direct Consumer Communication: You’re in full control of the fulfillment experience. So, if there’s a problem, customers will talk to you, not a third-party retailer.
At the height of the COVID-19 pandemic, we saw 10 year’s worth of eCommerce growth occur in 90 days. More than 80% of consumers shopped online—150 million of them for the first time. This boom is why DTC sales for established brands topped $117 billion in 2022, with overall DTC sales expected to hit $161 billion by 2024.
The Advantages of Direct to Consumer eCommerce for Businesses
Research shows 60% of online shoppers will go out of their way to buy directly from a brand instead of a third-party retailer. This is likely because direct to consumer eCommerce helps brands build personal relationships with buyers.
With DTC, shoppers get exactly what they’re looking for. Meanwhile, brands get a wealth of data regarding their target demo’s online behavior. The benefits of DTC eCommerce are overwhelming. Let’s explore several examples to understand how DTC helps your business.
More Control
Once your product hits retail shelves (online or physical), you lose branding power. You’re also at the mercy of their selling ability. By contrast, DTC puts you in complete control of your brand. From production and stocking to pricing, shipping, and customer service, buyers will never leave your side when engaging with your company.
Better Data
Direct to consumer eCommerce unlocks a plethora of crucial data points. You can follow the customer journey from start to finish without losing track of them in third-party stores. For example, if the data says most of your shoppers use their phones when engaging with your brand, it’s time to optimize your website for mobile–a wise digital marketing move, regardless.
Cost Savings
DTC eCommerce also allows businesses to bypass third-party retailers’ marketing fees. What’s more, retailers and wholesalers must buy your products at a discount to sell them for profit. You can leverage better profit margins by cutting out the middleman and selling directly to customers. You can also sell products for less than they’d pay at a traditional retailer.
Overcoming Challenges in Direct to Consumer eCommerce
Direct to consumer eCommerce comes with many benefits. However, you’ll need to overcome a few challenges and roadblocks to leverage it fully:
Building Brand Loyalty
Why should someone buy directly from your brand? If they trust a third-party retailer, they’ll likely trust the products they sell.
Brand loyalty takes time and effort–don’t try to corner the market this year. Instead, focus on achieving small growth goals over time and nurturing existing customers. Word of mouth is a powerful–and free–marketing tool. So, leverage social media marketing to spread brand awareness and build loyalty.
Fulfillment and Logistics
DTC eCommerce means you’re in charge of fulfilling orders. This can become overwhelming very quickly, especially as the business grows.
Be transparent about delivery times and ensure your customer service team is ready to tackle any issues. In addition, set and keep track of min/max warehouse stock levels and lean on logistics technology to streamline processes.
Customer Data and Privacy
Cybersecurity is top-of-mind these days. Tell customers how you’ll protect their data when shopping in your online store. Also, consider what cybersecurity companies you work with. How is their information encrypted and protected from malicious actors?
Strategies for Building a Successful Direct to Consumer eCommerce Model
Now that we understand the challenges and benefits, it’s time to build a successful direct to consumer strategy into your business model. Consider these best practices:
Create an Omnichannel Experience
It’s simple: more channels = more sales. Today’s customers have unlimited access to communication. As such, you should do everything you can to reach them where they spend most of their time online.
Creating an omnichannel presence takes work. You must maintain consistent branding while integrating across platforms. Thankfully, there are professionals you can lean on to solidify your omnichannel experience.
Prioritize the Customer Experience
Ensure customers can easily navigate your online store. Browsing, selecting, and checking out should be as easy as going to a physical location. Leverage artificial intelligence (AI) to make personalized suggestions based on the consumer’s search and purchase history.
Choose the Right Platform
The internet puts your products in front of millions of potential buyers. So, investing in the right digital tools is essential. Consider products that provide complete visibility into your online store. The best platforms will streamline data, inventory, and catalog management into one easy-to-use solution.
Leverage Direct to Consumer eCommerce With Smart Merchandiser
The push toward DTC marketing is too great to ignore. Brands must embrace direct to consumer eCommerce strategies to stay ahead of the competition. The right partner can help you take control of your digital storefront.
Smart Merchandiser is the only visual eCommerce merchandise management solution available in the marketplace. It enables you to make real-time changes within a single interface. Our solution paves the way for better website layouts and an improved customer experience. You’ll remain agile in a rapidly evolving market while overlaying detailed analytics onto your product thumbnails.
Contact Smart Merchandiser today to discover the leading solution for your eCommerce store.