5 Common Challenges that D2C Companies face

Posted on December 9th, 2020
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5 Common Challenges that D2C Companies face

The Direct to Consumer model is an ideal model, especially for retailers who want to be future-ready and create themselves as a brand that is trusted and preferred by the consumers.

D2C restricts expenses (otherwise paid to a host of middlemen, each capturing their weighty percentage), optimizes inventory and enables a more transparent and uncomplicated relationship with the end customer.

However, managing the entire spread from manufacturing to multi-channel sales, order management, delivery and customer engagement - could be quite a daunting task!

Do you know how to Maximize Results using Consumer Data?

The D2C path of efficient selling and larger profit margins could show a few bumps, especially with regard to your consumer data. Truly understanding the importance of consumer data is one aspect of this matter. The other and more vital one is managing and utilizing this data to your advantage.

Customer data can come to you from a myriad of platforms and devices. It is often scattered and unruly. The ability to collect, analyze, understand, categories and optimize this information is something every D2C company should master. This is imperative in implementing the D2C model successfully.

Consumer insights build a sound foundation towards an apt guide that delivers personalized products and customer experiences. Why is this necessary? Potential buyers need good and credible reasons to purchase directly from a D2C company. Online marketplace giants such as Flipkart and Amazon have been drawing in consumers in hoards, especially during the pandemic. They have accomplished this by providing almost every commodity possible with same-day or next delivery processes., convenient payment options and safe no-contact deliveries.

For a consumer to switch from such trusted names to yours, you need to identify exactly how this buyer ticks. Then, you may proceed to deliver an unparalleled customer experience via offers, name printed packaging, loyalty programs or free resources. Ideas that not only sound amazing in your marketing meetings but also work wonders on-ground.

Consumer data can assist you to decide pricing for specific target consumer groups. Eg: If you are planning to sell exclusive or luxury products to begin with, identify influencers or VIP users who could try your products at special rates or discount deals and offer you positive testimonials or recommendations in exchange.

Detailed and customized consumer reports and real time dashboards are the way to access and keep track of every buyer or specific buyer group.

Are you able to offer a Consistent Consumer Experience?

By referring to a complete consumer experience, D2C retailers instantly widen the responsibility net from the mere ‘click’, ‘pay’ and ‘exit’ phases to expanded aspects of the consumer journey.

E-commerce players that rule the roost, do so by investing in a consumer much before she even notices their products or services. More importantly, they continue to invest in her long after she’s made a purchase. The average consumer is largely unaware of this process but has grown accustomed to it. Now, it's only expected.

As a D2C retail player, your presence is vital at every consumer digital touchpoint. This means being there on every social media platform, app or website that your consumers frequent. But presence is only half the battle won.

Delivering relevant messaging, product information, engaging content, augmented product trials followed by easy online purchases using safe payment gateways is the next step. You should then be able to consolidate every order from various sales channels and view them in one place to be able to fulfill efficiently.

Lastly, timely delivery, no question asked return policies and omnichannel customer support result in consistently satisfactory consumer experiences.

Are you Equipped to manage your Inventory?

Your product range may be wide and impressive but as a fresh D2C player, you ought to choose wisely. If you are opting to sell some of your items via other ecommerce websites and a few via yours, let the high sale products continue to be sold the way they are. For your D2C model, choose products that are not doing so well. But select those you can easily sell, store and package without overdoing the quantity of products and SKUs.

A detailed competitor analysis will enlighten you on products that are in high demand. But here’s another warning! If you choose to offer those, ensure you are equipped to store extra inventory and are able to manage fulfillment efficiently.

An intelligent way to choose and manage inventory is by steadily monitoring orders and using this data to store the right amount of stock. The other way is to start small and work your way up.

Have you Invested in the Latest Technology?

If there’s one thing a D2C company cannot skip on, then that would have to be sound investment in technology. The technology we are referring to is not very complicated but vital, nonetheless.

Following consumers on their journey, improving their experiences, managing fulfillment and maximizing profit, all require an efficient system that does most of the hard work for you. Whether it's a smart Order Management System, Automated Supply Chain Management, Machine Learning-based Reports and Dashboards or Advanced Customer Support Platforms, every component adds to your smooth functioning.

The added responsibilities of a D2C include marketing, sales, order fulfillment and shipping. An integrated platform that keeps you aware of your production, operations, orders, delivery and customers is no longer a luxury, it's a necessity for a D2C enterprise.

Are you prepared for that Initial Drop in Business?

Setting up a D2C is much more than creating and launching a website. The process of drawing in online traffic takes time and consistent efforts. A robust digital marketing plan across social media platforms or industry websites via PPC ads is a good start. Striking landing pages, impressive product photos and keyword-based descriptions with quick and simple order systems are next.

Naturally, all this takes some time to manifest and for consumers to find you at your new swanky address. Moving your products from an established marketplace to your D2C has its own set of challenges as does introducing fresh products via your D2C channel.

But if you are prepared with the right strategies and a comprehensive, robust, and an integrated technology platform like Logibricks’ D2C Platform, each challenge can be handled with ease.


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December 9th, 2020