D2C Ecommerce
What Is D2C Ecommerce?
D2C ecommerce is a business model where the brand/producer/manufacturer goes direct to consumer by selling their products from their ecommerce website or online marketplace. The D2C brands are different from conventional brands that usually have the traditional retailer mode with multiple middlemen. The D2C model does away with the middlemen and sells the products directly to the consumer.
Traditional Retailer Model Flow: Brand/Manufacturer> to wholesaler> to distributors> to retailers> purchased by the end customer
D2C Model Flow: Brand/Manufacturer> Digital Store ( Website/Mobile Apps/ Online Marketplace)> purchased directly by the end customer
The D2C strategy when planned and executed strategically can be very beneficial for brands looking for cutting down costs and cashing on their brand value.
What Are The Benefits Of D2C Transition For Brands?
By cutting out the middlemen and going D2C brands can have a variety of financial, operational and strategic benefits. They can also improve buyer experiences considerably to win customer loyalty. The benefits of direct-to-consumer ecommerce transition for brands are:
- Establish a direct connect with customers through multiple channels to boost engagement and revenue
- Higher profit margin due to reduced fixed cost, capital expenditure and no middlemen
- Pass cost benefits to customers as discounts to win their loyalty
- Faster time to market with direct channels to go to the customer
- Freedom to experiment with different product mixes and new markets
- Full control of the brand and freedom to decide how to position the brand without intervention from retailers
- Full control of customer data with better insights into the market, customer preferences and brand performance
- Personalize product recommendations to engage customers and convert faster
- Leverage the most profitable sales channel to grow faster
- Pivot to new business models with full control of brand and products
What Are The Challenges Of Going D2C?
Transitioning to the D2C business model comes with its own challenges. However, with detailed planning and well thought product launches, strategic partnerships and an eye on market performance brands can easily overcome these challenges.
Here is a list of key challenges of going D2C:
- Lack of planning the end-to-end direct-to-consumer transition may lead to wrong product, market or channel choices
- Competing with established market retailers and stealing loyal customers from retail stores to your brand store could be difficult without added incentives for buyers
- Deciding the right business model ( full D2C without any middlemen or hybrid models that partially retains dealers network)
- Finding the right ecommerce solution provider to power your brand’s D2C transition
- Setting up streamlined fulfilment channels to ensure seamless order delivery across different channels
- Deciding the right marketing and promotions to thrive in the new set-up
- Support teams across different sales channels to address customer issues and queries on time
What Is The Future Of D2C Ecommerce?
With more and more customers craving for personalization and direct connect with brands D2C is going to be the most sought after business model. Direct to consumer business models have evolved over the period incorporating a lot of variations and use cases wherein instead of completely doing away with the intermediaries D2C brands are leveraging their dealer and wholesalers network for faster fulfilment.
With D2c brands showing a steady growth even during the slack sales period of the pandemic, brands have started incorporating D2C in their business strategy. StoreHippo offers end-to-end D2C ecommerce solutions for brands of every size and scale. From starting an ecommerce website to going omnichannel, or building a hybrid D2C model with dealers as vendors, StoreHippo has a built-in solution that can be easily customized for the unique requirements of D2C brands.
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