How D2C Model Enhances Brand Identity
Over the years, the retail sector has witnessed numerous trends that have given a new and more interactive dimension to the marketplace. Many traditional brick-and-mortar enterprises have entered the e-commerce retail landscape as web-based retail has brought a phenomenal change in the way consumers look at retail. The emergence of e-commerce platforms has generated momentum towards the Direct-to-Consumer (D2C) model of sales, prioritizing speed, convenience, and real-time optimal service. The model creates an environment where brands can compete for consumer interests through direct marketing and creative forms of advertising.
In 2019, the global e-commerce sales closed at USD 3.53 trillion and the e-retail revenues are expected to reach USD 6.54 trillion by 2022.
The online shopping trend has given a significant boost to the D2C brands. These brands are increasingly capitalizing on the expanding online sales environment, making it convenient for the customers to explore more brands and connect with them without any middlemen. The shift is driven by consumers getting frustrated over traditional big-box retail and faceless brands that fail to provide convenience, a compelling shopping service, and proper customer service.
Hence, the online landscape is densely populated with D2C brands as consumers shift to e-commerce retailers where they achieve a greater sense of trust and responsibility from the brands. Some popular D2C brands like Warby Parker, Glossier, Dollar Shave Club, and Casper have become immensely popular through their consumer-centric approach, streamlined shopping experience, and direct personal engagement with their target audience.
What is a D2C model?
Direct-to-Consumer or D2C brands are enterprises that sell their products to the customers directly without a middleman or a traditional brick-and-mortar store. This model encourages the brands to eliminate the need for distributors and allows them to manage vital operations such as manufacturing, marketing, advertising, selling, logistics and customer support.
Most D2C brands enter the market as a digital retail center, exclusively focusing on their digital presence in the online shopping landscape. On the other hand, some D2C brands have also moved on to physical stores that allow their customers to choose and try the products they are interested inn before buying them. D2C retailers enjoy all the advantages offered by traditional selling, without the financial and practical burdens.
Millennials love D2C brands, here’s why
For the highly scrutinized millennial population, D2C marketing substantially holds more appeal than traditional forms of marketing. Millennials generally focus on brands that speak to their priorities like quality, authenticity, convenience, affordability, and a seamless shopping experience. These priorities let them shift from large traditional retailers to budding D2C brands.
Almost 70% of millennials focus on company values and brand loyalty before making a purchase, as compared to 52% of all adult population. For instance, D2C mattress brand Casper has gained immense popularity among millennials and youngsters with their service and customer engagement. More than profitability, Casper focuses on radical customer satisfaction and their social responsibility by availing exciting offers like a 100-day trial of their mattress and donating and recycling unwanted products. The brand champions convenience with its direct-to-door delivery that eliminates the stress of outdoor mattress shopping and shipping.
D2C brands have an advantage over traditional wholesalers and retailers as they can easily offer affordability and quality in their products. Traditional retailers set their product prices after buying them from manufacturers, but when suppliers are directly marketing their products to the customers, they save a lot of overhead and make the same profit. This process doesn’t affect the quality of the product because D2C brands are actively innovating their products to achieve new quality standards and uniqueness to stay ahead in the competition.
Better customer experience
The D2C model also allows enterprises to easily collect consumer data and refine their offering and processes according to consumer pain points. This gives the brands the freedom to craft their brand messaging and products to match the customers’ preferences. The direct line of communication enables an improves customer experience, which is often lacking in traditional B2C models where manufacturers would supply the product and retailers would handle the customer experience, blurring the visibility into consumer insights.
Reasons to choose the D2C model
The D2C model offers exciting advantages that compel budding as well as traditional enterprises to launch their products with a direct-to-consumer approach.
1. Eliminate the middlemen
D2C allows budding as well as traditional brands to eliminate the costs that come with third-party interactions. When enterprises are selling their products through traditional retailers, they have to restrict their pricing patterns so that the business that is selling the product can mark it up to earn profit. Selling directly to the customer without a third-party vendor allows companies to generate higher profits, with more flexibility to change pricing patterns to appeal more customers.
2. Easy browsing
Enterprises can create a full catalogue of their products on their websites, adding convenience and ease to the customers while they are shopping online. With most retail websites, brands have no control over how their products are being presented to the customers and problems like lack of inventory and unattended service requests are likely to arise.
3. Offer omnichannel experience
For an omnichannel experience, it is important for the manufacturer to be available for its customers. It’s not just about advertising and using smart tactics to attract customers, its’s more about being a better retailer who takes consumers’ needs in account and positions products for them in all possible platforms and channels. Additionally, many enterprises end up launching their flagship stores, pop-up shops and collaborations with other retail chains.
4. Create brand identity and trust
Brands using the D2C model are more focused on telling their story to the customers and building a likeable brand perception. By eliminating third-party retailers, brands can control how their product is being presented to the customers and don’t have to rely on retailers marketing the brand identity. D2C enables brands to craft a compelling brand identity enriched with authenticity as the customers are getting the information directly from the source. Brands can tweak their story as they get to learn more about their customer’s preferences and values, making the brand more impactful and encouraging brand loyalty among customers.
5. Strengthen customer relationships
Controlling every part of the business allows companies to position themselves as an authority in the given industry, generating a healthy amount of trust among their target audience. A D2C model allows brands to appeal to the customers through their storytelling, optimal shopping experience, a variety of alternatives and post-purchase customer support. If customers face any issues, they can contact the brand directly. The user feedback is more honest and valuable in D2C models since negative feedback generally gets lost in translation when it is received by third-party retailers.
6. Expand the brand’s reach
Since D2C brands don’t have to sell their products through distributors and stores, it becomes easier of the customers to buy the products anytime, anywhere. The model offers greater flexibility in products, promotions, pricing and marketing, allowing enterprises to engage directly with the customers and dominate both the digital and physical retail ecosystem.
Common features of D2C brands
By looking at the D2C retail landscape, we can pick out some common traits that are shared by numerous big and small brands.
1. Operating in new domains
D2C brands are most commonly seen in new industries and domains where there’s plenty of room for innovation and improvement. For example, eyewear brand Warby Parker entered the highly competitive eyewear industry as a D2C brand. The brand soon became a cult favorite by offering more designs to choose from, better pricing and a smoother customer experience.
2. Passionate about customer experience
For D2C brands, marketing is all about the kind of customer experience they are going to offer. When customer engagement is considered to be the most important part of the retail process, it is natural for the companies to carefully understand the consumers’ demands and purchasing patterns.
3. Using data analytics
Since most D2C brands are operating in-house, they heavily rely on data-gathering campaigns and polls to learn more about their target audience and shape their strategies accordingly.
4. Leveraging social media and digital marketing
Successful D2C brands have a great social media presence which helps them to connect with potential customers in a better way. Social media tools like hashtags, polls, GIFs, and videos capture the target audience’s attention and land them directly to the brand’s page. Most traditional retailers fail to achieve a strong digital presence which makes them unnoticeable and causes inconvenience while purchasing and shipping.
Using a D2C model enables enterprises to establish a better brand identity and presence across various channels and groups of target audiences. By offering a streamlined shopping experience and providing information to the customers directly, D2C brands establish trust and build relationships with their customers that encourage brand loyalty. For such companies, there is nothing more important than customer satisfaction. Hence their marketing strategy is always focused on creating a better shopping experience and a positive retail environment for their customers, ultimately making them unique and noticeable.
January 4th, 2021