We all love to shop online. Be it delicious food, clothes, electronics, gadgets, cosmetics, or books- you can get everything delivered directly to your home in just a few clicks. The growing shift towards online marketplaces clearly indicates that people consider online shopping as a 'time and money saving' route to buy products.
But, an even more interesting phenomenon is the people's shift from online marketplaces like Amazon and Flipkart to marketplaces built around specific categories. Many people prefer to buy, for example, clothes from Myntra, groceries from Grofers, cosmetics from Nykaa, and baby care products from Firstcry.
But, the shift towards category-specific marketplaces is not mysterious at all. It just reveals that specialized focus on a category helps these platforms address consumer needs better. Consumers have also voted with their money to validate this. This paradigm shift within the eCommerce industry can be further magnified by focusing on brands that directly sell to consumers via their own website or mobile application, excluding intermediaries such as wholesalers, retailers, etc.
Direct-to-customer is an eCommerce model of selling products and services directly to customers without involving retailers and other mediators to sell products. D2C brands have witnessed an upward rise as more and more shoppers are now preferring to buy directly from manufactures. Unlike the traditional eCommerce marketplace model, by selling directly to their customers, D2C businesses are curtailing the cost of operation, logistics, and supply chain management. In this piece, we'll learn about the parallel world of the Direct-to-customer eCommerce model and why businesses and buyers worldwide are transitioning towards it?
Selling directly to customers is not a new thing at all. The origin of business in humankind was first started via the Direct-to-Consumer (D2C) model around A.D. 1000 when Marinell Bell Foundry in Italy made and sold the Bells directly to their customers.
Today, in the thriving eCommerce world, the Direct-to-Consumer (D2C) Model is again in the limelight. You might not believe it, but many traditional consumer-focused enterprises are now adapting to this new trend, so they can get along with the changing consumer behaviour. Along with this, many eCommerce businesses worldwide have roped D2C as their prime approach to sell products online.
But why? Because the D2C model of online selling products enables manufacturers to directly sell their products to the buyers, excluding dealers, sub-dealers, retailers, sellers, mediators, and other offline presence channels.
It implies that manufacturers now don't need to share their toast with the entities mentioned earlier. While cutting off the series of entities from the product supply chain, D2C brands can also significantly decrease customer acquisition costs and get much better ROI than brands selling the same products through online marketplaces or brick-and-mortar stores.
Besides, there is one more benefit of D2C over online marketplaces. When you sell directly to customers, you get hands-on information about individual users, such as their buying pattern, preferences, average spendings, etc. This empowers D2C brands to push personalized content and strengthen brand messaging, which is always missing when selling products via marketplaces.
Over the past few years, many brands such as Stitch Fix and Adore Me in the U.S., and Mamaearth and Boat in India have focused on a specific niche and captured the respective markets to become multi-billion dollar behemoths. While selling their products directly to buyers, these e-commerce brands established a revolution that is just around the corner. Now, more small & medium businesses are preferring to build a D2C presence over the traditional B2C model of eCommerce. So they can have out-and-out control over product supply chain management and get a higher margin while ensuring good quality of products and services.
Let's get into details and learn about the unique features of D2C over the B2C eCommerce model:
While searching for a 'face wash' on an eCommerce marketplace, buyers see hundreds of results from different brands and sellers. So, even if a brand is selling a genuine product at a reasonable price, the competition will always cut through. But the same doesn't hold true with D2C selling, as every visitor landing on your website is genuinely yours.
It is the prime benefit of D2C eCommerce over other eCommerce marketplaces. Because you don't need any middlemen to sell your products in the online market, instead, you can build an online brand presence and sell directly to buyers. By keeping aside the wholesalers, retailers, and third-party sellers, you can have absolute command over the inventory and product supply chain. With this, D2C proves to be one of the best strategies to boost the ROI of your eCommerce brand.
By leveraging direct channels like website, messaging apps, and social media to sell your products, you can get hands-on data about buyers' demographics, interests, buying patterns, etc. This data can be analyzed to conclude your marketing and sales strategies. So you can effectively establish an impeccable brand engagement as per the requirements of buyers.
It is true; consumers buy not only products but also the experience that you present. That's why big brands like Puma and Nike have shifted to direct-commerce through their website and mobile application. Hence, they get better access to stay connected with end-users and send them personalized push-notifications, product recommendations, offers, etc.
In other words, when it comes to providing a unique buyer experience, the D2C model is nothing less than a magic wand. With the D2C online selling model, a brand can significantly improve brand outreach with personalized content and keep the customers in the loop.
Around the world, D2C brands have become people's favourite. The prime example of this shift is Dollar Shave Club which has more than 4 million subscribers and generates an average $250 million in revenue per year.
According to a Global Brand Shopper survey in 2017, 59% people prefer to visit the brand's website over retailers to research and learn about products. And, 55% people prefer to shop directly from brands, while more than 73% expect better user experience from the brand's online stores.
With more people shifting to buy directly from brands- this online evolution has also created a new class of people that are more inclined to purchase online products from brands, just to make sure they get genuine products. The reason behind these consumers' ascension is the trust factor- that many feel missing while purchasing from eCommerce marketplaces.
Not to mention that businesses follow what customers want. So when during the Covid-19 lockdown related restrictions, demand for online shopping loudly emerged, companies started building their online presence too, and that's when the world witnessed the hyper-rise of D2C specific eCommerce brands.
Let's circle back to the very beginning of this article. Alternatively, with the unparalleled rise in the number of digital buyers, it can also be said that businesses now love to sell online. eCommerce marketplaces have become the all-new gold rush, and every company that's established hundreds of years ago or founded just yesterday wants to have it.
However, giant e-commerce marketplaces are already crowded with millions of products. This makes it difficult for small and medium businesses to highlight their products over competitors. Besides, irrespective of the brands, buyers' overall buying experience depends mainly on the eCommerce platform itself.
This is where the D2C model comes to the rescue. By simply directing buyers to their own website, brands can directly connect with buyers and better cater to individual consumers' needs and wants.
As an emerging champion of eCommerce, the D2C model has some salient benefits, making it a win-win for both brands and buyers. Let's learn about them in detail:
Brands that sell directly get incredible opportunity to look inside what buyers prefer to buy from them- as per targeted campaigns, consumer behaviour, geolocation, demographics, and other metrics. The same isn't possible when selling products via eCommerce marketplaces.
The Internet has emerged as the cheapest medium of doing business across borders and beyond. That's the reason many popular global brands are racing to create their own online channels to sell their products to a broader audience without having an offline presence. In simple words, D2C eCommerce perfectly matches the needs of today's brands. With D2C, you can make cross-border sales 'a reality' and get your brand to go global, that too at optimal expenses.
Storytelling is the most powerful way to improve brand presence and awareness altogether. With the D2C model of eCommerce, brands can make a solid-impression on buyers via their website and mobile application simply by crafting appropriate content, infographics, product guide, blogs, and videos.
One of the prime issues that eCommerce marketplaces face is the lack of an omnichannel presence to stay in touch with buyers of different tastes, interests and preferences. While on the other side of the coin, D2C-specific brands are overcoming this hurdle by building their brand available across multiple channels, such as Facebook, Whatsapp, Instagram, Twitter, and email.
The feedback cycle should be short for end-users- so manufacturers can quickly improve their products and services. Unfortunately, this issue can't be solved with marketplaces as the customers' feedback stays on their platforms.
But no more, with D2C eCommerce, manufacturers can directly get customer reviews and feedback. Which ultimately empowers them to improve products as per the expectations of buyers. Hence better chances of success of newly launched products.
Recently, when I visited a wellness store to purchase a facial cleanser, I was taken aback by the incredible sales skills of the store assistant. The conversation started with what I am looking for and ended with what will suit me best.
Me: Hey, I'm looking for a facial cleanser for daily use
Store Assistant: Sure, I can help you with this. We have two different products in this range. But before I recommend one, can you please tell me if you have dry or oily skin!
Me: Thank you, I have oily skin.
Store Assistant: Okay, so for oily skin, I would recommend you to go with our best selling product- Faceup.
Me: Great, is there any side effects for new users!
Store Assistant: No sir, our products are organically produced. Hence they don't contain any harmful chemicals. Still, if you face any issue, feel free to contact us.
Me: Awesome, I'll go with Faceup.
That's how traditional offline direct selling works. In the online world of commerce, when brands pursue this model, it enables them to communicate with individual buyers. They can do so with the help of Live Chat and Chatbot tools. So buyers can get their queries resolved within seconds. With this approach of direct selling, D2C brands can emerge as the cornerstone of personalized shopping.
By establishing direct channels to connect with buyers, brands can enhance 1:1 communication at scale. Besides, by segmenting buyers into different categories, D2C companies can also attract individual buyers as per their preferences to create out of the roof sales that go beyond expectations. Several D2C brands have leveraged conversational channels along with automation to achieve up to a 40% boost in sales, leading to a decrease in customer acquisition cost by 25%.
More than 30% of buyers are more likely to buy from social media and chat platforms directly. With conversational commerce, brands can significantly impact buyers w.r.t to their products and services.
As the next chapter in the eCommerce world, D2C is still evolving. Brands are now focusing more on establishing their long-term relationships with customers; hence many are turning towards conversational channels to connect and sell their products to buyers. With automation on the side, 24/7 messaging with end-users is becoming easier and a way to qualify genuine buyers. That too, without investing human resources for the same. Consequently, it results in decreasing customer acquisition costs while increasing the profits made through individual buyers. At times like this, when the retail sector is still recovering from the apocalypse of the Covid-induced lockdown, it is crucial to have a direct channel for manufacturers to connect with their customers.
At LimeChat, we are helping 20+ marquee D2C brands deliver delightful and personalized customer experiences at scale. So they can unlock new possibilities in the highly competitive online market - simply by extending their own brand and hence differentiating themselves from other brands.
We build brand-specific conversational flows that keep your buyers engaged with your brand. In the case of complex queries, you can always bring on human resources and assist your buyers without letting them wait for a second.
Wondering how Limechat can help you unlock the potential of your D2C brand? Connect with us, and get your queries answered by our sales experts.