Consumers increasingly look to connect with brands and seek brand transparency. In response, many brands including Nike are turning to the Direct to Consumer (D2C) model, eliminating third-party retailers in sectors where distribution is typically seen. The model should be considered by all brands looking to build a direct connection with their customers, achieve higher margins and take back control of their brand image. In our latest white paper, we break down everything retailers need to know about D2C.
55% of consumers prefer to buy directly from brands instead of multi-brand retailers
Direct to Consumer (D2C) is when brands operate without any wholesalers, third-party retailers or other middlemen in sectors where a distribution model is typically used. The majority of D2C brands operate mostly, if not entirely, online. D2C brands have a direct relationship with their customers and control of how their products are presented online, giving them command of the user experience, product prices and choice of distribution channels.
D2C brands hold valuable data on their consumers and are able to assess customer satisfaction on a given product, allowing them to quickly adapt products to customer demand. Consumers are often involved in the choice in the branding of their products, leading customers to become a community of brand ambassadors.
There is a huge revenue potential for brands that want to invest in D2C. Nike turned to the model recently, announcing that it is reducing the number of its retail partners and significantly increasing D2C sales, which are significantly more profitable than wholesale transactions.
Selling D2C requires a significant amount of effort, time and resources. Brands turning to D2C must be ready to manage all marketing, sales, customer support, and logistics. This could mean outsourcing operations or hiring more staff.
Brands do not necessarily have to completely switch to a D2C model, but all should think about creating a more direct relationship with their online customers. A good starting point is the hybrid model whereby brands maintain a strong online presence and receive direct sales with their website while maintaining a steady flow of revenue through first-party sales on marketplaces.
Marketplaces will help your brand gain visibility. Consumers trust marketplaces and are more likely to purchase your products on these renowned sites—particularly if it’s their first time coming across your brand. Marketplaces also have a strong strike force in terms of SEO, meaning you’ll have a better chance of being displayed on search engines.
54% of buyers start their product searches on Amazon
Consumers actively use Amazon, eBay, and other marketplaces to search for the products they are looking for. Resellers will always find a way to fulfill this demand if the brand doesn’t cater to it themselves—this leaves the risk of resellers not respecting your prices, having a negative impact on your brand image. Unless brands are willing to accept that middlemen and marketplaces define their e-commerce strategy, they must establish a plan to sell their products directly on these platforms.
35% of consumers now buy on niche marketplaces, typically turning to these marketplaces to discover new brands and products. Brands should pay attention to specialized marketplaces that fit their products which might be overlooked on generalist marketplaces. These marketplaces give access to a community of qualified buyers that share common points with the brands and are more committed and motivated to buy.
Here are some of our top tips to succeed in your D2C strategy—especially on marketplaces…
Want to find out the rest of our tips and learn more about selling D2C? Check out our guide…
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