selling dtc

by Amba Wilkes

You may have already dipped your toes into the DTC waters, or you may only be considering it now. Whatever your situation, there’s no denying the ongoing pandemic has accelerated and exposed the opportunities within eCommerce. So why are DTC brands becoming more prevalent and could this model be successful for you?

Have this year’s events made you consider entering the direct to consumer (DTC) arena? DTC brands sell directly to the end consumer, cutting out the middleman typically associated with traditional retail.

You may have already dipped your toes into the DTC waters, or you may only be considering it now. Whatever your situation, there’s no denying the ongoing pandemic has accelerated and exposed the opportunities within eCommerce. So why are DTC brands becoming more prevalent and could this model be successful for you?

Why should you sell DTC?

The global pandemic has pushed shopping habits toward eCommerce with online sales now expected to grow to 19 percent rather than 11 percent by the end of 2020, reaching £78.9bn – a huge £12.6bn increase from 2019. This change in shopping behaviour has revealed just how important it is for brands to have a direct relationship with their customers.

Brands selling DTC as the pandemic hit were in a stronger position, while traditional wholesalers and bricks-and-mortar retailers attempted to adapt fast to capitalise upon the increased online demand. As a result, we saw brands going direct that had never done so before.

Renowned food manufacturer, Heinz, launched their first DTC store – Heinz to Home - in just seven days with Shopify Plus. Due to the isolation and travel restrictions impinged by COVID, they recognised consumers were struggling to access their products. Heinz’s DTC offering made their beloved and most popular products available to a vulnerable market at this time of need, presenting them with the ability to leverage upon this foothold and build further success.

What opportunities does DTC present?

The option to purchase online has become an even more welcoming one this year. In fact, research shows that there were four years’ worth of eCommerce acceleration in the first three months of lockdown. If you’re a brand that relies on the physical store locations of your retail partners, your sales are entirely in the hands of those retailers. At a time where so much uncertainty remains and many are choosing to stay away from their high street, eCommerce has only strengthened. Selling DTC presents the opportunity to not only increase sales but also retain sales you may have missed in-store.

Besides more sales, selling DTC gives your brand valuable insight into your audience that you would otherwise not get. When applied effectively, this insight can have a major impact on your bottom line.

The DTC revolution is being driven by brands who use their customer’s data to streamline and improve each touchpoint. Using this model provides control over the full experience allowing for a customer-centric shopping journey from product discovery to conversion. This end-to-end interaction enables you to capture rich data such as order history, average order value (AOV), personal data, abandoned items and shipping preferences, all of which can be used to:

  • Get to market faster
  • Increase customer loyalty
  • Personalise the shopping experience
  • Get closer to your customers
  • Take learnings to the rest of your business

Leveraging this data, you’re in a stronger position to create a unique shopping experience and make your customers happy. With more control over manufacturing, marketing and distribution, DTC brands even have the freedom to test new products or limited editions before releasing it to the rest of the market, saving them time and money.

Selling DTC may feel like an uncertain change but brands are successfully making this transition and so too can you.

What should you consider?

Know your objectives

As with any new project, you have to know why you’re doing it. Increasing sales may be the first objective that comes to mind, but this is likely just one reason to sell direct. Before launching, create clear cut objectives for your DTC strategy and consider how these fit into your wider business. Examples that you may want to consider could include:

  • Building customer relationships: Your customer data is important. However, a more traditional retail model makes it harder for manufacturers to understand what the end recipient thinks of their product and what they could do to improve. Cutting out the middleman, you’re in charge and free to collect insights and feedback to better your offering. A stronger brand and happier customers – what’s not to love?
  • Controlling the onsite experience: Today, consumers have endless choice when it comes to their shopping habits, making it harder to compete for their attention. When selling DTC, you need to obsess over what your users expect from your site. Translating that all-important customer data into actionable insight, you can deliver the onsite experience your customers want.
  • Driving sales: Taking your products DTC doesn’t mean forgetting about your retail partners. But it does allow you reduce your reliance on them by driving your own sales. It can also expose your brand to a wider audience who your retail partners may not attract.
  • Developing an omnichannel experience: Selling direct enables you to have full control over the customer journey from beginning to end. It also allows your customers to choose where they prefer to interact with your brand, whether that’s through the physical stores of your retail partners or your own DTC eCommerce website.

No matter your core objectives, when taking a DTC approach you must focus on providing value to your customers and avoid introducing friction into their customer journey.

Platform selection

When you make the decision to go DTC, selecting the right eCommerce platform is key. Your aim is to seek out the technology that will allow you to meet your customers’ needs and scale those relationships.

Take the time to consider which eCommerce platform would best suit your DTC objectives as each has its own strengths and weaknesses. Ideally, you need a platform that is fast to deploy, affordable, low maintenance, secure and scalable.

Many brands have been successful using Shopify Plus for their DTC venture such as traditional chocolate makers, Lindt. We’ve implemented Shopify solutions to empower many of our DTC clients including Sacla and Taylors of Harrogate, enabling them to sell at scale with ease, create personalised shopping experiences and automate the shopping journey.

Creating an eCommerce strategy

You cannot simply create a DTC eCommerce site and expect your customers to come to you. Why should your customers buy from your website when they can get the same product elsewhere? How will you drive traffic to your website over your competitors and third-party sites? It’s important to establish your brand as a DTC provider, letting your audience know you are now online, raising brand awareness and highlighting what value you offer.

Another consideration is how you can get sales through your site without causing channel conflict and damaging relations with your retailer partners. Your DTC offering doesn’t have to be a replacement for your existing retail partners. Retailers are a significant source of revenue for manufacturers so you don’t want to draw sales away from their high performing products as this could be counterproductive to your wider business. Instead, DTC is an opportunity to diversify your channels which is a huge part of growth and increasing revenue.

What can you offer that your stockists don’t? A popular feature that works well is personalisation. For example, shoe brand Vans allows customers to customise and build their own shoes - something you’re not able to do on other stockists’ websites. Other options to give your customers a reason to buy direct is to offer unique product bundles and pricing, subscriptions, gifting services and loyalty schemes.

What teams will you need?

Going DTC requires a different team structure from traditional retailers. Structures naturally vary based on the size, objectives and revenue of your business. While some roles may overlap with your current structure, it’s important to understand what changes or new roles you may need:

  • Strategy and leadership: Your leadership team is key to success. This team could include a Managing Director, Head of eCommerce, and a Retail or Commercial Director who should have the expertise and experience of guiding your wider teams in this new landscape.
  • Technical: Key to protecting your customer data and creating a secure online shopping experience, your technical team may include a Technical Lead and Integrations.
  • Trading: As you’ll be dealing with your customers directly, there may be a number of new roles introduced as part of your trading team. How will you get your products from A to B? How will you cater for your customers’ needs and answer their questions? Merchandisers, Customer Services, Web Administrators, Fulfillment and Data Analysts all play an important part in ensuring your customer’s shopping experience is a positive one.
  • Marketing: Driving brand awareness and customer acquisition, your marketing team can help establish your position in the market as a direct to consumer brand. Through a combination of SEO, paid media, CRO, social, email and graphic design, you’ll be able to show your customers the value behind your DTC offering.

Originally founded as an eCommerce business, we put our experience of working with leading brands and also being a retailer ourselves into exploring how you can construct your eCommerce team for maximum efficiency. If you want to find out more about this topic, contact us or take a read of our blog on the topic.

Consider your product range

Selling direct isn’t one size fits all and it’s not always a good idea to put all your eggs in one basket. Have you considered whether you will use your DTC site for new products only, existing product ranges or premium versions? If you’re expanding into new products, will you need a new brand?

As a manufacturer, you may white-label your products and not have a consumer-facing brand. As a result, you’re lesser known to the audience who is already consuming your products, making it harder to compete with already established retailers. In some cases, a new brand could help you position your brand better allowing you to compete easier with retail giants like Amazon.

Key takeaways

Going DTC is one of the biggest changes you can make to your business. It isn’t as simple as creating a website but with the right considerations, it can open your brand up to limitless opportunities.

The behaviours driven by the pandemic is here to stay. If these circumstances continue to cause lockdowns of varying scales, travel bans and high street closures, are you prepared to adapt? Don’t leave your success down to your retail partners alone.

How can Statement help?

Although we’re Shopify experts through and through, we get retail too. Statement was founded by an eCommerce business which means we understand your challenges because we’ve been there ourselves.

When it comes to DTC, we can help you with every stage of your project – not just the web design and build. With our roots firmly in retail, we bring a commercial edge to our guidance, applying our experience to the online merchants we work with. Whether it’s acquiring customers, fulfilling orders, supporting your internal teams or creating the UX your audience wants, our team of in-house specialists can help you navigate the challenges of modern retail.

Trusted by leading brands including NEOM, O’Briens, Cloud Nine and Hotel Chocolat, we deliver eCommerce sites backed by retail experience. Get in touch to learn more about our DTC successes and how we could help you.

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