There has been an explosion of direct-to-consumer brands (D2C) over the past few years and there seems to be no slowing down. There has led to a shift on how consumers relate to brands. In other words, middlemen and traditional retailers are increasingly facing challenging times ahead. According to study by Invespcro, over a third of consumers report to have bought directly from the manufacturers’ website last year. Consequently, D2C brands have increased their marketing budget compared to only 60%. This is a proof of tectonic movements in terms of where the future customer would like to do their shopping.
From the manufacturers’ point of view, a D2C model is God-sent because D2C brands are meant to own the entire value chain of products from research and development to design, manufacturing and selling. In other words, D2C brands take the full responsibility of products from conception stage to the marketing stage as they keep all the revenue. With more than half of the consumers (55%) preferring to buy directly from the manufacturers, D2C brands can won the entire customer cycle and improve their customer retention. This is because 78% of consumers trust information coming direct from manufacturers when doing product research on social media and websites.
D2C is the future and why you have to invest on this model
According eMarketer, the future of marketing will come from direct-to-consumer relationships, therefore there is need to for brands to focus on product knowledge and invest in efficient supply chains. It is also critical to diversify launch strategies and become more innovative when it comes to creating brand awareness.
Are you feeling motivated to shift focus to D2C? There are very good reasons why you should give this a serious thought. You could start by experimenting with D2C marketing where you target direct sales to consumers instead of just waiting for wholesalers. By creating an ecommerce website where consumers can place orders directly, you can quickly get an indication whether you need to invest in the D2C model.
Remember, more than 40% of consumers expect to buy 40% of their purchases directly from manufactures in the next 5 years. This presents a great opportunity.
Before you reach your consumers directly…
Here are some points you could consider if you are trying to reach your consumers directly.
Are your products able to reach a large number of consumer? Invest in an ecommerce website and social media fan page where you showcase your products and speak directly to the consumers.
What is the profit margin? You are more likely to get higher margins when you invest in D2C and it is a win-win. Consumers get to shop directly from brands they trust at bargain prices while you get to enjoy bigger margins compared to what you get from wholesale transactions.
Are you able to ship? One key aspect of D2C model is the ability to fulfill orders through efficient shipping strategy. Ensure your products are able to reach the consumers promptly and safely. Also ensure to provide easy returns and warranties. It helps with building confidence and trust.
Do you have a marketing strategy in place? This is the time to invest in a robust marketing strategy, especially social media influencer marketing so as to attract a solid consumer base and brand ambassadors.
The era of solely relying on middlemen and retailers is long gone. However, this doesn’t mean that retailers will suddenly disappear from the scene. It simply means that manufacturers need to take their D2C models seriously because it is a major revenue booster, which is more effective, efficient and profitable.