dtc

Nowadays, a new wave of innovative brands is shaking up retail — direct-to-consumer e-commerce companies that create, market, sell, and ship their goods themselves, without intermediaries. Brands characterized by their direct connections to consumers are disrupting the business model of market-leading brands which is leading to a new way of doing business. These direct brands are digitally savvy and fueled by data and will be the growth engine of the new economy. The Direct-to-Consumer (D2C) approach is quickly becoming a common path for suppliers and CPG (Consumer Packaged Goods) products to reach the market directly. They produce and ship their goods directly to customers without relying on third-party aggregators or other intermediaries. It helps D2C businesses to sell their products at a cheaper cost than conventional luxury brands and to retain end-to-end control of the production, sale, and delivery of goods. Direct-to-consumer brands have used the digital infrastructure to grow quickly and connect directly to their customers. They have built robust and influential presences in Google search results, turned their Instagram followers into micro-influencers, and used highly targeted Facebook ads to widen their audiences.

The DTC business model is here to stay, and the following characteristics make these brands exceptional.

  • Mission Driven: Many brands of DTC believe in the value that they offer to their customers. Their message is not just about the product; it is also just as based on relation or experience. Sales are no longer just sales for them; it’s the customer journey. Support is no longer just help & support; it is the experience of the consumer.
  • E-commerce sales: Most DTC brands are digital natives, with sales only available online – from sites like Amazon to their self-hosted store. The same is true of most marketing campaigns, with a big emphasis on digital platforms such as social media and paid search.
  • Quality over price: Many DTC brands take the debate regarding benefits vs. marketing features seriously, and product costs seldom play a role in their marketing strategies implying customers tend to be invested in a DTC brand
  • Data-centric: Since most DTC brands are also digital natives, they prefer to concentrate on the Millennials & Gen Z consumer segments. These brands tend to be highly analytical – they rely on metrics to cater to their consumers, to make their sales, and to keep up with great messaging. Most of their sales and marketing activities are targeted at making changes to maximize the funnel rather than make a big splash.
dtc Source: PA Consulting

DTC offers an opportunity for higher margins, excellent brand stewardship, direct consumer relations, and better consumer understanding. ANS Commerce will drive your brand with its proprietary e-commerce solution. If you're a startup with creative ideas but have little experience in the technological department, our highly experienced team from tech, e-commerce, and marketing & brand promotion is there to bring your brand in front of the world.

But first, the main problems and challenges that brands in this space face are insufficient budget and scalability. Research from PA Consulting on 'The direct-to-consumer opportunity’ said that at 23% budget considerations are prominent for many. But so too are structural concerns, with 22% worried that they don’t have the scale to make an impact in the market, 18% questioning their internal skill gaps, and 15% saying they lack ideas on how to define and deliver their D2C ambitions.

dtc
The new shopping experience is omnichannel, integrated and brand-driven.

Brands are coming into existence as 'store-less'. As customers use mobile devices to make purchases through vertical lines, some of these store-less brands tend to remain online-only. The experience of brick & mortar is therefore affected. It now needs integration of the brand, its skills, a cool factor. Today's world of brick & mortar is a place where consumers can relate to the product, embrace the brand, delight in it, revel in it, and share it. Providing first-class customer experience is the number one priority for retailers and brands alike. And brick and mortar depend on online integration: BOPIS (purchase online, pick-up in-store) is a new standard in shopping.

Consumers want easy access to the goods at their fingertips – and this is always required at little to no additional expense. But while consumers expect brands to flex around their busy lives, they have less faith in the third-party delivery companies that are enlisted to do this. Only 41% claim that they trusted the delivery company to find a reasonable alternative method of delivery for their goods if required. Owing to their intimate interaction with consumers, many DTC firms have more proprietary buying behavior data than conventional brands.

This degree of understanding helps companies to align themselves with consumer needs better while still offering quicker service. The advantage is tremendously significant, as ANS Commerce platform, Kartify allows a mix of reporting and analytics with funnel enhancement. Save time and money by using our website platform as It processes millions of bytes of sales order data, returns, patterns, consumer activity on the website and also can integrate with any BI platform to provide actionable, data-driven course of action.

dtc Source: IAB Report
Marketing that will raise the bar

We've seen a lot as a visionary in performance marketing. And we still believe that it has the power to connect consumers to brands and products in ways that no other channel can. With ANS Commerce, make real connections with your customers everywhere they go, with our performance marketing, display and paid search solutions based on decades of experience and innovation. Launch integrated campaigns that reach across channels, locations, and devices to deliver extraordinary results.

Direct-to-consumer brands lead their engagement through social media and scaling word of mouth. They represent a generation of companies that start with online-only sales that have ramped quickly to high annual revenues. Hence, content plays a somewhat different role in DTC platforms than in funnel recognition and branding initiatives. Digital content, personalized content, education, storytelling, and thought leadership are the main drivers of digital experience. This format is forcing the brands to engage directly with consumers. The IAB report on direct brand economy stated that two-thirds of consumers expect direct brand connectivity and 67% of consumers have used the company's social media site for servicing.

dtc Source: PA Consulting
Shuck the old-school supply chain mentality

Direct-to-consumer brands are where digital engagement meets the digital supply network. They take full advantage of Industry 4.0. Globally, consumer goods companies have already committed to developing and strengthening their D2C propositions. From the PA consulting research report, we found that the consumer goods companies surveyed were either planning to or had already developed a D2C strategy, with 82% already implementing one and the remaining 18% developing one. These companies have a healthy appetite to engage directly with consumers because they see the opportunities associated with putting the consumer at the center of their operations. They expect to be able to give consumers a greater choice (55% of respondents), faster access to products (52%), better experiences (52%), and more personalized products (45%).

Service level will increase dramatically when the supply chain significantly improves interactions with the customer, leverages all available point-of-sale data and market intelligence, and improves the forecast quality significantly. The goal should always be to have minimal touch points and minimal kilometers driven while still meeting the required service level of the customer. According to a presentation from IAB, companies can buy individual supply chain functions as a service(SCaaS) on a by-usage basis. Service providers’ greater specialization creates economies of scale and scope, increasing the potential for attractive outsourcing opportunities. ANS Commerce’s warehousing and logistics solution comes with an opportunity to better connect with your customer. Our solution features the chance to cross-sell and upsell during checkout. Another feature of return management with just-in-time flexibility can help you to devise cancellation tactics to find out what exactly went wrong and deliver better service in the future. Being D2C means you can control your product through your various push or pull marketing techniques. These include your site and through the multiple channels where you sell. You can utilize not only your website, but social media channels, email campaigns, and more.

dtc Source: PA Consulting
Direct selling is likely to grow in markets

While this model provides consumers and brands with direct sale business & undoubted benefits, there are bumps in the road that brands need to navigate before they position themselves directly in front of the customers, they've worked so hard to gain loyalty from. Careful consideration should be given to building a smooth customer experience, the majority of consumers want ads customized to their personal choices, with the agile and flexible operating model underpinning it. Brands will have to make the most of the new proximity they have to their customers – it will be crucial to their long-term future.

Keeping this in mind, the research from PA consulting revealed that Almost all consumer goods companies (98%) expect D2C initiatives to increase sales, with a quarter expecting them to add more than 20% to their sales by 2020. They are confident that their sales with D2C will enable them to have greater access to customer data, and control on buying experience.

If managed well, this can be a two-way street, with brands evaluating and improving their ideas on the basis of input from the consumer, getting the consumer closer and creating healthy partnerships. ANS Commerce, your extended & exceptional ‘direct e-comm’ team is there for your needs. The team has a strong connection with marketplaces team to enable quick resolution and can handle all logistics products by tapping order checkpoints, including effective return & refurbishment. Our flexibility in the marketplace can take your business to the next level and help you expand your reach. When done right, it will strengthen your brand and increase sales.

dtc Source: IAB Report
Phygital – Be everywhere, all the time

Phygital marketing is a blend of digital and real-life experiences, put together for the good of the customer. It's about integrating marketing efforts seamlessly across physical and virtual spaces. Retail convergence, innovation and the ongoing integration of physical and digital operations are pushing companies to find new ways of generating value for customers and stakeholders, while at the same time gaining value for themselves and investors. Owing to the availability of constant new (now) technologies, today, we are in a market where value is generated in a hyper-available, stack-of-your-own-supply chain, where innovative ideas can become a reality practically overnight. The old model of indirect brand economy may have worked for some in the past, but now marketers need to be at the center; there needs to be a direct relationship between the company and the consumer.

Since, it’s a recently emerged technique. It has potential in future. Amazon launched its phygital store with the idea to skip the hassle of standing in line at checkout. Other brands such as Nike also followed the same with their maker studio in 2017 where the Phygital space allows customers to arrive at a brick-and-mortar location and use a touch-screen interface to design their dream pair of sneakers.

The internet has transformed the way in which consumers interact with retailers and shop for their goods. Looking ahead, the fast pace of collaboration between traditional bricks-and mortar retailers and online players will continue to reshape the market, driven largely by retailers bowing to consumer demand in order to stay relevant and fresh. The ANS Commerce advantage here lies with the way we support direct business to consumer brands of varying scale & complexity, including B2B marketplace help & omni-channel use-case.