Understanding D2C ecommerce and its benefits for small businesses
Leeann Nash November 24th 2022 - 3 minute read
The main advantage of ecommerce over a traditional brick and mortar approach to is the ability to more easily reach a global market, whilst trying to keep costs down. Companies are no longer limited by geographical location and consumers have the ability to access a virtual store at any time.
However there are many different types of ecommerce including business-to-business and business-to-consumer. However, there is a newer, lesser-known form of ecommerce: direct-to-consumer.
In this article we’ll explain what D2C is and how it could particularly benefit small businesses.
What is D2C?
Direct-to-consumer ecommerce occurs when a manufacturer of a product, sells their product or service directly to a consumer. This is compared to a traditional model where there are a lot more steps between the two including wholesalers, distributors, and retailers.
By cutting out the middle man, firms are able to save money and time, as well as offer a more bespoke service to consumers. According to the global brand shopper survey carried out in 2017 by Astound Commerce; ‘55% of shoppers prefer to shop directly with a brand manufacturer.’
Benefits of D2C
- Better connection with your customers:
Following a direct-to-consumer business model means you can connect better with your consumers. As you are selling directly to your consumers you can better direct your energy toward offering a more bespoke and engaging service. A more flexible and consumer focused approach helps build familiarity, trust and hopefully generates repeat business.
- Ability to embrace omnichannel marketing:
If you’re a manufacturer who has complete control of the product journey from start to finish means you can run your business anyway you see fit. Marketing, ordering, dispatch, it’s all on you. This gives you an excellent opportunity to embrace an omnichannel marketing strategy and really show your customers every step of your business practise. This helps you uphold transparency which many customers appreciate.
- Brand control:
In a traditional B2C models the manufacturer has very little say on how their products are branded and sold by retailers. However, when you sell directly to a customer you have complete control over how you represent your brand. From marketing to sales, you can decide how to present your product. With the added bonus of direct customer contact you’ll have a better understanding of what your consumers resonate with, meaning you can adapt and change with trends or demands quicker.
How to achieve a successful D2C strategy
- Invest in your digital talent:
If you and your team, if you have one, don’t have much ecommerce experience, you could struggle with the transition to D2C. To tackle this, you might look to hire someone with D2C experience and place them in a management role to guide your team’s development. It’s all about acquiring, developing and nurturing talent to make your businesses D2C stand out.
- Strive for a great customer experience:
Whether it is through a personalised shopping system, accessible design, or a generous returns policy, the customer experience should be at the heart of your ecommerce enterprise.
When you implement D2C this is imperative because you’re in control of everything. You have direct contact with your consumers. Make sure you take advantage by building a strong, reliable customer experience that upholds your brand. It’ll all but guarantee repeat customers.
- Maintain customers:
Building off the last point, any ecommerce channels, whether D2C or B2B needs repeat customers to remain viable. Many businesses achieve this by obtaining a core set of customers. The main reason businesses choose to practise D2C is that it cuts down cost. Everybody knows that generating new customers is more expensive that retaining old ones.
Did you know that by increasing customer retention by 5% you’re potentially increasing your profits by over 25%?
There are a few ways you can do this, including discounts and loyalty perks; offering a type of subscription services, if your product type can support it; and creating a community based around your product and brand in which your customers can connect with you and each other.
Whilst D2C is becoming increasingly popular amongst small business, there are sure to be some teething errors. What works for one business utilising D2C might not work for you. It’s all about trial and error.
Whatever you decide to do when you start your D2C journey it’s important to make sure that you showcase your business as best as you can. Always remember, cutting out the middleman from your business model is designed to give you more control, free range and help you to establish a better connection with your consumer. Embrace that and use it to your advantage.