Direct-to-consumer, or simply, D2C, is a business model or a strategy that directly sells products to consumers without having to rely on middlemen. In traditional retail, products go through several intermediaries before reaching shoppers. Usually, the origin is the manufacturer, followed by the wholesaler, distributor, and finally, the retailer. In D2C, products are built, marketed, sold, and shipped directly from the business to consumers.
The increasing use of a D2C model, as well as the growing number of purely D2C brands, are often attributed to the changing consumer behavior and the rise of eCommerce. Today, more shoppers are buying online, expecting brands to provide customer experiences that are not only fast and convenient, but also authentic, valuable, and personal.
Some examples of successful D2C brands are Dollar Shave Club, Glossier, Blue Apron, Reformation, Casper, Warby Parker, MeUndies, and more.
The Pros and Cons of D2C
Adopting a D2C strategy or building your business to be a D2C brand provides you with both challenges and unique opportunities.
The pros of using D2C include:
- Having more control over your product, brand personality, and end-to-end customer journey and business operations.
- Generating more bottom-line profit with no middlemen.
- Building meaningful relationships and ongoing engagement with shoppers and establishing long-term customer loyalty.
- Improving current processes with data from on-site tools and direct feedback from consumers.
- Being more flexible but thorough when it comes to personalizing the online shopping experience.
The cons of using D2C include:
- Competing against retail giants for traffic, online and offline, including Walmart, Amazon, and Target.
- Dealing with supply chain and fulfillment issues, particularly considering how digital shoppers have become used to on-demand products and services.
- Doing a lot of heavy lifting in terms of establishing differentiation, building trust, and acquiring and retaining customers that usually come easy for heritage big-box retailers.
Hear from Douglas Hollinger, VP of Strategy at BVA, a leading commerce agency that incubates and grows direct-to-consumer (D2C) brands, about the new eCommerce landscape and how to remain agile and innovate the customer experience:
How to Be Successful at Direct-to-Consumer Retail
Several features and characteristics make well-known D2C brands today. In addition to selling unique products, the success generally lies in the overall implementation, focusing on delivering genuine customer experiences and having a keen eye for what makes shoppers tick.
- Establish a unique and relatable brand voice and community. Most effective D2C brands and strategies today rely on the power of authentic conversations and a loyal community of customers. Beyond the product, shoppers want meaningful interactions with brands, and this is where D2C excels and what retailers can adopt.
- Simplify the customer journey. D2C brands often sell a select number of products so the shopping experience is often seamless, with customers not having to deal with decision paralysis or frictions from not finding the item they have in. For retailers who want to incorporate D2C principles, make sure that shoppers easily discover the relevant products on your site. You can optimize your product discovery architecture with augmented site search, personalized recommendation engines, structured navigation, and an accurate filtering system.
- Ask for feedback and act on it. Another defining characteristic of D2C brands is how they consistently engage and communicate with customers. Sometimes, they even ask them to be part of product development and marketing. Having a strong relationship with shoppers can help retailers not only maintain loyalty but also create products that customers would want to buy.
- Be agile and open to new technologies. Perhaps because D2C brands are small, they can easily implement innovative solutions that make the online shopping experience engaging, smooth, and valuable. For example, using image search to remove the limitations of keyword search or novel eCommerce best practices, such as a sliding shopping cart instead of a new page loading, that make the buying journey stand out and memorable.