The explosion of direct-to-consumer (D2C) brands over the past few years has marked a radical shift in the way products are sold. This revolution is disrupting established industries and creating a fundamental change in the ways brands engage with consumers.
Retail ecommerce is rapidly expanding and has seen enormous growth in the last decade.
According to statistics released by Shopify in 2019, worldwide retail ecommerce sales are going to hit a USD 4.9 trillion mark by the year 2021. This accounts for roughly around 17.5% of global retail sales worldwide, which was only 7.4% back in 2015 and is expected to reach around 22% by the end of year 2023.
USA alone added USD 601.7 billion from e-commerce sales for 2019, and accounts for 11.1% of total retail sales, which by 2021 is expected to grow further to nearly 14% of overall sales.
India’s ecommerce is predicted to jump from USD 39 billion in 2017, to USD 120 billion by the end of 2020.
If you have been keeping up with recent trends of ecommerce worldwide, you might have noticed that D2c businesses are gaining a lot of attention in the sector.
By definition, D2c businesses are basically the ones that sell directly to consumers without any retailer or wholesaler involved.
We always thought that almost all ecommerce players used B2c, but that’s not true. After researching a little, we found out that around 80+ businesses marked with a private label that appeared on Amazon sell directly to consumers. Now, what comes to mind is - if Amazon is doing it, there has to be something to it. In 2019, D2c ecommerce sales reached USD 14.28 billion in the US.
According to emarketer’s 2020 forecast, the sales are likely to grow by 24.3%, making it a figure of $17.75 billion. What’s more, according to Statisca, it was in 2019 itself that Crocs D2c comparable store sales in the Americas grew by 21%, as compared to the previous period that saw 5.6% growth in the Asia-Pacific region, and 13% in the EMEA region during the same period.
This looks like a major paradigm shift in the market is likely to take place in the near future, but don’t jump to conclusions yet.
- Recent similar web data for the most visited websites in India - Amazon landed on 20th and Flipkart on 31st
- The market of Alibaba Group Holding limited of China is one of the 20 most visited sites in the world with nearly a billion products
- Sites of AliBaba Group Holdings represent more than 60% of parcels delivered to China & the company accounts for about 80% of e-commerce in China
- Alibaba is present in 150+ countries worldwide.
It’s very obvious that commerce giants will continue to receive more visits and will continue to dominate the market because of their popularity and wide assortment of products. It’s not hard to notice that there is a monopoly of B2c ecommerce giants such as Alibaba, Flipkart, Amazon, Snapdeal, ebay & Walmart, so what does it leave for the D2c brands?
Towards the end of last year, brands like Nike and Kellogg’s revamped their retail strategy by restricting the sales of products on Amazon and creating a separate D2c space directly through their own website. Yet, there are still a lot of D2c businesses that lack the right approach to create a space into the market for themselves. We believe that with an ever-expanding ecommerce market on a global level, there is plenty of space for everyone and it starts from working towards customer intimacy. But what is customer intimacy?
Customer intimacy is a rather broad term that includes customer engagement as its core area. It is also a marketing strategy, where the supplier of a product or service wants to get closer to the customer to understand their needs and behavioural patterns.
So where should we start from?
Build a Website that speaks to the customers
An eye-catching website homepage that can assure the customer that they have indeed landed on the right page. It should appropriately communicate your brand quality and brand motto, as this is the first thing that a customer experiences on your website.
Let’s take an example of Beardo men, an Indian brand that first launched in 2015 and is experiencing massive success in the Indian market. The brand only works in a limited sector of men’s grooming range, which makes it very selective with its customers. The motto they communicate is ‘men need personal care products’, which is indeed very appealing because no brand has ever shown such kind of dedication towards men’s personal care, especially not in the Indian market.
When you open their website page you can see it has a very rough and rustic look, just the way the brand is! The homepage is covered in black and white, and is filled with posters of men with great beards. It even has a link that redirects to a YouTube video that clearly states their motto in a very creative manner.
Another example is Bombay Trooper, which is an apparel and accessories brand that started in 2014 and their website is impressive to say the least ! It clearly states ‘Get a touch of nature’ and even their products do the same. They offer a range of jute-based apparel in their store and t-shirts with print ideas directly inspired by nature. The catch here is that now they can use this in countless manners as they did for their new Bombay trooper jute-based bags packs by associating it with travelling or the bottom wear they call ‘hoopers’. When you visit their website home page, it has a very organic look and that’s what catches the eye of the customers.
Both these brands have their motto clearly communicated through the website homepage and that is what works for them!
Simplify it for your customers
Simplifying processes is at the core of a D2c business model, so it makes sense that they could use this as an advantage to extend this simplicity to the customers. They eliminate the analysis paralysis for customers that helps in making choices easily and eliminates the hassle of going through the website and searching from thousands of products.
Around 48% of online shoppers simply head straight to a large ecommerce marketplace, they have a wide reach into the market and they are much popular, easily accessible and provide excellent user experience on their website. Some key points to simplify it for the customers are mentioned below -
- Easy website navigation through proper segmentation and categorization of content.
- Enhance Internal search engine capabilities to make it efficient and fast (use facets, filters, keywords & autosuggestions).
- Payment methods - According to a recent report by Statista, there is a 67.57% cart abandonment rate worldwide. Setting up popular and easy payment methods for customers really adds up, services such as No cost Emi and cash on delivery also make a huge difference when it comes to online shopping.
- Chat or customer support - Bonobos, a subsidiary of Walmart took a very unique approach and decided to create a separate team for its customer service and support initiatives - they call them ‘The Ninjas’. They have a 90%+ rate of responding to all phone calls within 30 minutes, 90%+ rate of “great” email ratings & sub-24 hour average email response time. Their representatives provide a personalized customer service to individuals. By simply being there with your customers, you are not just gaining more appreciation on your customer support services, you are also gaining direct one-on-one insights of customers about your products and services and building direct engagement.
- Reviews and ratings - 85% of consumers conduct online research before making a purchase. When operating in the B2c space, the reviews and ratings of the product hardly get shared with the brand and platforms. Here, they snatch back the advantage of directly connecting to the customers. Reviews can be a great way to collect information about common issues with your product and services and also puts you in touch with the customer directly.
- Easy Return Policies - Launched in August 2014, the Indian food delivery brand Swiggy set a great example of how easy return policies can elevate your brand status. Today, the brand serves around 300+ cities across the country. Swiggy is one of the top brands in the category of food delivery.
No matter how small an issue one has with their food, they do not mind replacing it or sometimes even returning the money you’ve spent. You can mention your issue through chat or call one of their customer service representatives and at most, you will be asked for a picture proof of the mentioned issue with your food.
Go Global or go home
Taking the worldwide average, 57% of online shoppers make purchases from overseas retailers according to Shopify. None of this demands storefronts for each different location or setting up an international warehouse. To get started, prioritizing online advertising through Google Ads, product listing Ads and most preferably Instagram is important. If you see the right opportunities, you can go ahead by setting up websites in different languages and further by collaborating with international delivery service providers.
Women’s Best, a women fitness brand with over 3.8 million followers on social media and more than 900.000 customers from 150+ countries is one of the fastest growing fitness brands globally and sets a perfect example. They have multiple country and language specific accounts with only a slight difference in the content.
The advantage here is that you get to test, experiment and upgrade your strategies by implementing them in different markets.
Social media marketing
Popular brands such as Nike, Kellogg’s, Bira, Beardo, Mama Earth, Ustra in Personal Care, Wrong, FabAlley, One Plus, BoAt, are already operating in the D2c space. One thing that is very common about these brands is the right social media marketing.
An excellent example of this is luggage designer, manufacturer and retailer New York-based brand AWAY which started out in 2015. The social media influence (mainly Instagram) is impressive, being able to portray more about the travelling lifestyle rather the product states clearly that it’s not just any other luggage brand. It’s like without even speaking of the product, they market it and the website for the company’s magazine sees 800k monthly views, while Away’s podcast has been long discontinued, the published episodes maintain a five-star rating on i-tunes.
A more intimate content marketing strategy should be the focus, most of these brands make it a way of living rather than just a product, after discovering how it fits into your customer’s life.
A New York based online retailer of prescription glasses and sunglasses Warby Parker created an entire social campaign, called #warbyparkerhometryon to encourage customers to share their various frame options on social media and solicit feedback from family and friends.
Relying on your customers to get the word out is an efficient way to spur growth. Encouraging and empowering them to do so is even better.
Ustra Personal Care, an Indian Men’s personal care brand shares their client experience regularly on their Instagram accounts and appreciates their progress. This not only speaks about their engagement with the clients, but also helps to spread a word about their brand quality and motto.
Dollar Shave Club, an American company based in Venice, California that was recently bought by Unilever for USD 1 billion, released a YouTube video starring its CEO and featuring rough, bleeped-out language. It reportedly cost less than $5,000 and was shot in a single day. The video immediately went viral and as of today has racked up over 26 million views.
Subscription strategy
What can be better than getting more customers to buy your product? Well, getting them to sign up for a subscription and making them a steady source of revenue. This model offers consumers value for money, convenience, and exclusive “members-only” perks, like free shipping, insider discounts, and loyalty points.
A very good example of this is Lenskart, an Indian optical prescription eyewear brand with 500+ stores in 70 cities in the country and holder of USD 1.5 billion by Dec 2019. Lenskart has been following this subscription strategy from the very beginning, it provides an attractive ‘BUY ONE GET ONE’ deal on the frames, with of course other added perks as well and different levels of memberships with added benefits.
1:1 personalization
Since D2c brands operate in a confined space, it’s comparatively easier for them to plan deeper personalization strategies. Moreover, with limited data on the board, looking for trends through data analysis is much simpler. They also have the advantage of collecting data directly from customers through reviews, social media accounts and customer support which can be rich sources direct inputs from the customers, since these all will be directly managed under the brand but not any third party like in B2c model.
Some other important areas to be focused are mentioned below-
Customer journey mapping - Mapping the interaction of customers from the very first visit on the website for identification of patterns of the customer and understanding how they interact with the brand. This helps in-
- Highlighting development priorities.
- Allowing you to identify areas of improvement for better engagement.
Create a single view of customers - Aggregating customer interactions across all systems and channels of engagement into a single view helps in putting together all the information you hold on a customer. It also allows you to build meaningful segments that support targeted marketing campaigns.
Optimization of Content strategy - Key considerations for content production to effectively communicate value prop to drive outcomes.
Omni-channel experience & Omni-channel strategy: An omni-channel strategy outlines boundaries of success by defining how the website must accomplish the business objectives (such as SEO, Marketing Automation, integrations & Analytics).
It’s necessary to provide an equally seamless experience to the customers no matter how they are accessing your website. On average, only 52% of online stores have omni-channel capabilities which is the reason why a lot of brands lose customers.
An equally efficient mobile website is must. (Users who have a negative experience on a mobile website are 62% less likely to purchase from that business in the future).
There can also be various other simpler ways to drive engagement
- Cart abandonment emails
- AI- based Chatbots
- Newsletters
- Informational Podcasts
- Campaigns
The last word
The bottom line here is to choose the methods and strategies best suited to your brand and work deeper and focus on customer intimacy. For D2c brands, the profit lies more into creating a valuable and trustable customer base to start from, rather than selling more because a brand name once created in the market can always expand its reach.
Moreover, there can be rather simpler and innovative customer intimacy techniques that are effective enough to create better engagement. The secret lies in getting closer to the customers whether it is using social media or by providing impressive customer services. What matters the most is how you display qualities that make you unique and how valuable are those to the customers.
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Ecommerce