Today’s unprecedented business environment has quickly rendered traditional sales channels obsolete. Across the US, manufacturers large and small are now forced to pivot from these tried-and-true models to more direct, agile, and engaging alternatives.
Why? It all comes down to control. Not only has market disruption moved organizations away from traditional sales methods, but brands also are looking for opportunities to take direct control of selling into the marketplace.
D2C change drivers
A number of factors are driving the rapid pivot to direct-to-consumer sales channels, but two primarily stand out: a new generation of buyers and the need for a hedge in sales strategy.
First, it’s no surprise that today’s buyers – Millennials – don’t shop the way their parents do. Online shopping, direct purchasing, and the need for experience excellence are all behaviors and traits that are markedly unique from the prior generation. They want to extend the benefits of direct commerce that they enjoy in their personal lives to their professional experiences.
Second, manufacturers have seen a large-scale shift in retail since 2008 and need to diversify how they sell into the market. There is a conscious move to hedge traditional reliance on retail middlemen and realize the enhanced margin and intimacy of selling directly to customers. Essentially, this hybrid model enables retailers to maintain their share of the traditional market while fortifying their business with diverse revenue streams and customer-engagement initiatives.
Making the shift
So, it seems that making the move to D2C is a no-brainer, right? Not necessarily.
While the benefits of direct sales channels are immense, organizations need to step back and analyze the operational considerations in making this shift. They should consider the following.
- Do you know your customers?
Traditional retail channels remove sales burdens from manufacturers but also add a layer of isolation between companies and customers. That means the deep understanding of your customers required for D2C initiatives is a challenge.
Market research, customer data, and expert analysis comes into play here. Mapping out the customer journey is critical to starting any D2C shift.
- Adapt infrastructure and logistics
A D2C transformation is not a short-term project. It’s a shift in the entire way you do business, and this change will be reflected across your entire business ecosystem.
Front-end and back-end infrastructures are critical to delivering the quality customer experience required. On the front-end, customers will need an intuitive, engaging experience that makes their buying process simple and enjoyable. On the backend, infrastructure needs to deliver on the promises you’re making to the market.
Beyond just infrastructure, processes will shift as well. The cross-functional nature of D2C transformation guarantees that multiple teams, units, and functions will be involved in just about every decision. Make sure to cast a wide net early on during strategy and development phases. This way, every team member is on board and informed when the new model is launched.
- Be loud and be proud!
Building a D2C business model isn’t Field of Dreams: just because you build it doesn’t mean they will come. These initiatives will only be as successful as they are visible, so marketing will play a key role in driving traffic to the new model.
Unify content, email, SEO, paid advertising, and just about every other marketing tactic around a common theme and a common message. Furthermore, referral and word-of-mouth are critical to scaling the new experience past the early adopters.
At the same time, make sure to not forget about your traditional distribution and retail partners. Channel conflict is a very real challenge, and it comes down to smart marketing and promotional support to help convince these partners that their business is valued as well.
Even done well, D2C may not be for every business, but explore the option and, if you choose to make the move, following the steps above will greatly increase the odds of success.