Make the Switch: A Beginner’s Guide to Direct-to-Consumer Retail

June 16, 2021

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Make the Switch: A Beginner’s Guide to Direct-to-Consumer Retail

Technological advancement, the introduction of new sales, marketing, and communication mediums, and the ever-evolving buyer persona are some of the key catalysts behind the paradigm shift in the retail realm. Consumer satisfaction has always been deemed paramount for retailers, however, its significance has amplified in recent times. Meeting consumer demands, on-time order fulfilment, and after-sales is just not enough for today’s tech-savvy consumers. They need a heightened sense of personalization, direct communication, ease of navigating the purchase process to stay active, and loyal to any retail brand. While this does not make the position of the retailers any easier, they can definitely unlearn the conventional concepts, and learn to keep up with the recent trends to pass the muster.

The conventional order fulfillment included the manufacturer, wholesaler, distributor, retailer, and consumer at the end of the pipeline. However, thanks to the advancements in technology, and digitization, the process has been shortened and rather optimized. Today, manufacturers can choose to directly sell to their consumers through an online platform, which efficiently eliminates the middlemen, and saves the chaos for both the manufacturers and the consumers.

Let’s dive deep into the concept of Direct-to-Consumer Sales (DTC) and why retailers must make the switch.

What is Direct-to-Consumer Sales?

Direct-to-consumer (DTC or D2C) sales is considered a popular marketing and advertising strategy in which the manufacturer-cum-seller approaches the consumer directly by skipping traditional advertising methods, and the middlemen. The concept of DTC retail is not much different. While retailers fall into the middlemen category, DTC sales is in no way a risk factor for their sustenance and growth.

The concept of DTC retail has been around the corner for more than a decade and several brands have taken the initiative to implement the same. In this D2C retail model, manufacturers can sell their products to the customer directly, whether that’s an individual consumer or another retailer. This way, retail distributors are conveniently eliminated from the equation. The benefits are countless and this has encouraged more than half of the retail ecosystem stakeholders to embrace this concept and make it the fastest-growing eCommerce category.

DTC – What Is In It for the Brands/Retailers

The retail ecosystem is growing rapidly and evolving too. Retailers will find an ample number of competitors who are targeting the same set of consumer bases, which makes winning the consumer trust even more crucial. Retailers have to embrace the concept of DTC as their competitors have already done that or at least planning to leverage the same in the long run. Not embracing DTC will make retailers fall behind in the race as well as the growth curve in terms of consumer satisfaction.

Another key aspect of why DTC is essential is that retailers can gain deep, actionable insights into their consumers; they can learn their buyer personas, their purchase trends, etc. These insights can be further leveraged to gauge the existing retail strategy, rehash it to be more competitive, and be ready for the future by anticipating the untold expectations of consumers.

Instant gratification is another key aspect that makes DTC highly laudable. DTC offers retailers the opportunity to directly connect with their target audiences, establish personalized communications, and nurture engagement.

DTC enables retailers to be in a strong and positive position to foster lasting consumer relationships. It helps the retailers to stay on top of the mind of their consumers, which is beneficial both from the monetary, and non-monetary standpoint.

Now, let’s understand how DTC came into the picture.

The Catalysts for the Culmination of DTC

Customization – The traditional concept of one-size-fits-all is no longer viable. Today’s consumers demand the product and service offerings by retailers to be curtailed to their specific needs, interests, and circumstances. Such a level of customization is difficult to achieve through the conventional supply chain or order fulfilment model. Hence, the concept of DTC came into view. With DTC sales, retailers can directly connect with their target audience and better understand their needs. This helps them craft the coveted product and service portfolio to delight their consumers.

Convenience – In today’s fast-paced life, almost everyone is moving at a breakneck speed. From assimilating information to working smartly to purchasing products, everything has to be done on-the-go, lately. And, thus, convenience is something that today’s consumers are going to appreciate more than any retail brand may think of. Gone are the days of shop hopping, browsing through endless product catalogues, and then making any purchase. Today’s consumers would like to get it all done with just a few clicks and in an easy, quick, and hassle-free manner. DTC just does the trick! With no middlemen in the background, and order placement on online platforms with a few clicks, DTC saves a great deal of time and resources for today’s consumers. And, this is one of the aspects that’s going to champion the concept of DTC in the long run.

Meaningful Engagement – Consumer acquisition and retention are some of the core objectives of retail brands, and they may employ a plethora of relationship and growth marketing strategies to achieve the end desired result. While omnichannel marketing has nudged them in the positive, and succeeding direction already, DTC sales will prove highly beneficial too. It’s not only about creating a consistent shopping experience across channels or providing prompt customer service, DTC enables retailers in creating and nurturing meaningful, and personalized engagement with the consumers directly.

If you are yet to embrace the concept of DTC and just weighing your options, here are few aspects as a retail brand you should have crystal clarity about.

  • Who are the target consumers and what are their preferences
  • How to make consumers feel highly valued
  • How to enhance consumer engagement
  • How to transform consumers into brand loyalists and advocates in the long run
  • How to leverage actionable consumer insights into rehashing product portfolio/features

DTC – Why Make the Switch

If you are still undecided, here are some of the top-notch benefits of DTC you must be aware of.

  • Retailers can directly connect with the consumers, and understand their expectations to deliver a consistent experience
  • Retailers can enhance their product features as well as their portfolio to accommodate the consumers’ existing and anticipated demands
  • Retailers can ensure better brand image management and avoid the scenarios of lost opportunities in relation to the consumer base

Interested in exploring more? Connect with the experts at Vinculum today!

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