Why Businesses Should Consider Selling Direct-to-Consumer

Jason Lichon
Direct to Consumer

A ccording to McKinsey & Company, eCommerce penetration experienced ten years’ growth during the pandemic, replacing unavailable physical channels during the height of the pandemic.

Updated from a previous blog in 2020…

From everything businesses learned through the COVID-19 pandemic, it’s clear that success has favored those who were and are proactive in rethinking their business strategies, especially those who have embraced digital change. And while the move towards a more digital world transcends industries and sectors, it’s been especially accelerated within eCommerce. In fact, according to McKinsey & Company, eCommerce penetration experienced ten years’ growth during the pandemic, replacing unavailable physical channels during the height of the pandemic. Given these consideration is why Businesses Should Consider Selling Direct-to-Consumer.

With such change happening so quickly, there’s no wonder why organizations are eager to adjust their digital strategies – and fast.

Customers Are Up for Grabs

eCommerce was already an indispensable tool for so many pre-pandemic, growing rapidly over the years thanks to advances in technology, the ongoing digitalization of everyday life and changing customer preferences. But no one anticipated the remarkable growth in online selling that would be generated by the health crisis.

What’s even more impressive is that people who had used online channels for less than 25% of their purchases prior to the pandemic increased their online purchases by nearly 3.5X. Additionally, 75% of US consumers have tried different stores, websites, or brands during the COVID-19 crisis and 60% of those same consumers expect to integrate the new brands and stores in their post-COVID-19 lives.

That means, not only is there now the opportunity to reach the engaged and digitally savvy shoppers who have increased their online spending, but there is also a completely new group of potential buyers out there. The problem is how do you best capture the opportunity to engage with them?

Opportunity is Knocking with D2C Sales Channels

eCommerce is complex and constantly changing, making the competition for customers’ attention extremely difficult. In order to keep up, organizations need to make sure they’re optimizing every touchpoint along the buyer’s journey. For some organizations, this means adjusting channels and selling directly to their customers, or D2C.

Some of the most innovative and successful brands from the last decade have been borne from the shift to D2C. Warby ParkerGlossierCasper all have carved out competitive places for themselves within their respective markets by going direct.

But it’s not only these “new” brands getting their slice of the D2C pie; Nike recently announced their plans to shift away from partner channels (including Amazon) to focus more on D2C, citing the profitability and brand ownership that comes with such a move.

While strategies like Nike’s may seem dramatic, it’s clear that in order to be successful, organizations need to be comfortable with disruption. There is the opportunity now more than ever to reach new segments of buyers and to take more ownership of the customer journey. While D2C may seem like a big endeavor, it’ll ultimately add value for your customers, and the more value you add, the more you’ll remain relevant and necessary to them.

Is D2C Right for Me?

Stepping into a new channel strategy is no easy task. It requires careful consideration of your business processes and systems, your potential customers, and the way people interact with your brand. But with the skyrocketing influence of eCommerce, there are some significant benefits to selling direct; here are just a few:

  • Own the customer experience: gain more control over the branding and messaging your customers see, nurture customer relationships directly
  • Use customer insights for innovation: gather and use customer data to improve products, develop new ones, and create more immersive and personalized customer experiences
  • Drive sales and loyalty: add new revenue streams, find new customer segments, and build loyalty with their current customers

It’s Not All or Nothing

By implementing a D2C strategy, online merchants can build a better understanding of their customers, keep their operational costs low, and take advantage of new revenue streams. However, it’s important to note that D2C doesn’t have to be your exclusive strategy.

If you take a look at the D2C players mentioned earlier, Warby Parker, Glossier, and Casper have all participated in physical retail as well as vendor partnerships. And of course, Nike still has diverse channels in which they use to reach customers. HarperCollins, the second-largest consumer book publisher in the world and a BlueBolt customer, sells their products through various channels, but use their online store to reach customers directly.

Case Study HarperCollins Publishers
Case Study HarperCollins Publishers

Many times, organizations focus on making the shift to digital rather than the reasoning behind it. Instead of emphasizing digital transformation, organizations looking to implement D2C need to understand that digital transformation is situational – sometimes digital fits into our lives, and sometimes it doesn’t. It’s the responsibility of merchants to take a holistic approach and understand how, when, and why their customers buy from them and then provide the appropriate paths to purchase, whether that’s digital, physical, or a combination of both.

The New Normal

D2C undoubtedly had a huge influence on some of the more profitable brands coming out of 2020. It enabled brands to move more nimbly to stay in touch with their customers directly and meet buyers where and how they needed them most.

Covid traveler

Now in a post-pandemic world, it’s imperative that organizations focus on ways to improve or reimagine how they meet the needs of their customers now and into the future. Creating a D2C channel requires careful planning and consideration, a strong understanding of customers’ buying needs and expectations, and actionable data and insights. But the benefits can bring endless possibilities for growth.

In the battle for market share, only organizations that continue to be agile, resilient and responsive to change will come out on top. So, whether it’s exploring a new selling channel or rethinking your customers’ buying journey, just remember, the secret to getting ahead is getting started. What are you waiting for?

Interested in learning more about selling D2C? Make sure to check out our white paper “Direct to Consumer: Everything B2B Companies need to know to sell D2C,” or feel free to contact us to speak with an expert today!

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