D2C or direct-to-consumer brands are becoming a major disruptor in a vast number of industries.
In fact, the total D2C ecommerce sales in the United States are expected to rise to $175 billion by 2023 from its current $151.2 billion, an anticipated jump of more than 15.7% in just one year.
The pandemic, in particular, accelerated the adoption of D2C ecommerce, and a large number of brands are now moving towards this business model.
But what exactly is it?
The D2C model of commerce is a process in which the brand directly sells to consumers without any mediators; no wholesalers, retailers or third-party businesses.
Let’s find out why this model is disrupting industries and finding so many takers.
Why Companies are Opting for the D2C Model
1. Complete Control
When you directly deal with the consumers, you have complete control over every aspect of the process. This includes production, marketing, distribution, and customer service. You can also oversee the shipping process and ensure that last-mile delivery is done without hiccups.
This control helps ensure that everything goes according to plan. This can help companies avoid undesirable situations where intermediate-created issues can harm a brand’s image.
2. Hyperfocus
Certain businesses prefer to launch a single product or service and put all their focus on promoting and selling it. This hyperfocus is possible with a D2C model, as it allows you to deal directly with the consumers, without involving third parties that may or may not be interested in promoting a single product or service.
3. Recurring Revenue
Subscription-based businesses are launched with the idea of generating recurring revenue. When you’ve got such a business model, it’s essential that the consumers directly deal with your company to avoid complications. That’s why brands like Dollar Shave Club, Barkbox, and others have opted for the D2C model. These brands run social media campaigns that directly talk to their customer base and motivate them to subscribe to their products from their online store. The products are then directly delivered to the customers on a regular basis.
4. Centralized Marketing
Marketing plays a major role in growing your brand by helping you reach a wider audience, engaging with them, and converting them into customers.
When you opt for a D2C model, you’ve got complete control over your messaging.
On the contrary, the mediators can influence your messaging to a certain extent, affecting the perception of consumers about your brand.
5. Customer-First Approach
Nearly 58% of customers surveyed said they prefer ordering from D2C companies because of lower costs and more efficient shipping.
Now, this underscores an important point about D2C brands and that’s their customer-first philosophy.
From customer support and loyalty programs to control over pricing and shipping, you can ensure that you provide your customers with exactly what they want. The idea is to ensure maximum customer satisfaction here by putting your customers first.
How Companies Use the D2C Model
Now that you know why brands leverage D2C, let’s see how they use it.
1. Quality Products
If you opt for D2C, you have to make your products speak for themselves. This is because you won’t have any other mediator who can do that. For this reason, companies develop products that offer real value to customers so they naturally gravitate towards them. Additionally, product pricing remains low, as the commissions for mediators are cut out.
2. Direct Communication
There’s a deep focus on social media marketing when it comes to D2C brands. This ensures that you can directly communicate with your audience and solve their issues. Social media also proves to be a great channel to generate sales.
Rove Concepts, for instance, leverages social media to drive sales and has amassed a following of 351k on Instagram.
3. Streamlined Shipping
As mentioned above, consumers choose the D2C model for a wide variety of reasons, such as free shipping and fast and convenient delivery. There are multiple shipping strategies you can leverage to improve customer experience.
These include:
- Same-Day Delivery: Done to ensure quick delivery of the products to the customers, thereby improving their shopping experience.
- Time-Definite Delivery: Allows customers to choose a time and date for receiving the product, reducing chances of a missed delivery, which is a major cost, according to 65% of retailers.
- Room of Choice Delivery: Especially useful when shipping heavy goods, as these are actually placed in the room of the customer’s choice.
Some strategies include transparency in the form of tracking of shipped products and returns. Some even choose to offer reverse logistics.
Read More: SalesTechStar Interview with Joe Walsh, CEO of Thryv
4. Data-driven Decisions
D2C brands have one big advantage over the rest — data. By analyzing the sheer amount of available consumer data and gathering insights from it, you can understand what your customers like or dislike. Based on these insights, you can make changes to your existing strategies and elevate the customer experience.
Final Thoughts
D2C helps you deal directly with the customers without any mediators, thus making your business model leaner and even cost-effective.
An increasing number of consumers also prefer this model of shopping as it puts them first, gives them better value for their money, and takes care of their shipping expectations.