When launching a new product, there are thousands of distribution options at your disposal, from large-scale retailers, like Target, Sainsbury’s or Walmart to digital marketplaces, like Etsy or Amazon. There are also plenty of independent stores to choose from, both physically and online.
But what happens when you don’t want to sell through a third party? When you want to skip the middleman entirely and sell straight to your customers.
Selling directly to consumers (or D2C as it’s more commonly known) is a brave move that has many benefits, but also some drawbacks. We’re here to break down the D2C process, explaining what it is, whether you should pursue it and how to create a seamless approach for your NPD.
What is D2C?
A Direct to Consumer approach is when a company chooses to sell its products without an intermediary or third-party involved. It is the opposite of B2C, Business to Consumer selling, where retailers control the entire distribution process.
The decision to go D2C is high risk, high reward. D2C brands have more visibility and control over their processes, but also need to work harder to grow their awareness and user base.
Let’s decide whether it’s right for your brand by delving into the benefits and disadvantages of D2C.
Benefits of D2C:
Data – D2C brands have a huge amount of data on their customers, as they control the entire selling process, from beginning to end. Marketers can use this data to understand if their new product is landing or to identify areas of weakness to improve upon in the future.
Control – As D2C brands control every stage of the selling process, they have more opportunities to enhance the customer journey. The benefit of this freedom is that they are able to produce tailored content and experiences, with no restrictions on their creative output.
Reviews – D2C brands have access to customer reviews. A positive review can go a long way, creating trust and reducing the barrier to entry, making consumers feel more confident to purchase your product.
Content – D2C brands are easier to create a connection with, as they have more customer touchpoints to optimize. In-store a brand only has their shelf space to work with but D2C brands have thousands of opportunities to communicate their story, and can use their website, social platforms or customer service systems.
Speed – D2C brands can get to market faster. Intermediaries are more likely to experience delays, as they are managing multiple projects at once. With a D2C brand, if your aim is seamless delivery, you’ll be able to get there faster than an in-store brand that is juggling many priorities at once.
Disadvantages of D2C:
Trust – D2C brands can find it difficult to create trust. When you purchase through an established intermediary, you are more likely to trust the end result will be a good quality product. It becomes riskier when you buy from an unknown entity. To create trust, be as transparent with your processes as possible and optimize your customer service to ensure problems are dealt with efficiently and speedily.
Awareness – D2C brands don’t have a physical presence. When you’re in a shop, you’re often reminded of brands you wouldn’t have thought of if they weren’t in your direct eye line. D2C brands have to work harder to generate awareness through their digital marketing strategies.
Storage– D2C brands need to consider storage. An established intermediary will often possess a large storage facility but with a smaller D2C brand, the possibility of running out of space is more likely. Outline a detailed storage strategy, including thoughts on contingency plans to avoid this happening.
How to create a D2C offering for your NPD
A solid D2C plan should involve a focus on website and marketing. Your website is where you’ll be selling your product, so it needs to be optimized, easy to use, and engaging. Your marketing strategy is how you’ll generate awareness for your product, so it’s equally important in generating sales.
Think of your website as a digital storefront. It’s the place customers will go to first to find out more about your brand, your products, and your values.
Your website needs to deliver on your customers’ expectations. It should be easily navigable, visually appealing, and speedy. To get to the purchasing page, your customer should not need more than 3 clicks. Online customers are easily frustrated, so if your website isn’t simple to use, you’ll find them moving onto a competitor, fast.
Creating a good first impression is crucial. To lure customers in, design your webpages to be aligned with your brand personality, keeping it consistent with what your customers have seen of you so far. Make sure to lay your brand story out in a neat and engaging way to grab consumer attention and maintain a consistent tone of voice across all touch points to drive credibility and optimal customer experience.
To harness the power of social media, focus on the audience you are trying to attract. Tailor your marketing tactics to this specific group for maximum impact. When choosing which channels to use, consider what will appeal to your target group. If you were focusing on 45 year old females, for example, you may prefer to use Facebook and Pinterest, over Instagram and TikTok, as these have higher user rates amongst this age group. Keeping a tight hold over your target audience will help you to ensure your messaging is sculpted, focused and able to cut through the noise in your category.
Use your communications strategy to build a hype around your product launch. Customers love to feel special and exclusive, so create the impression they’re one of the first to try your new product. Interactive campaigns and events will help to boost your popularity. Use creative assets carefully throughout this process to express your brand personality and ensure consistency across all touch points. In-store, your content options range from Packaging to POS. Online, there are countless opportunities for content creation. Optimize the content on your website, social channels, and email to grow both your brand and your awareness.
Promotions are a great way to expand your reach and grow your customer base. When launching a new product online, offer discounted or free delivery to remove the barrier to entry and encourage customers to purchase your product. Promotions can be risky as they have the potential to dent a brand’s credibility, so instead of offering discounted prices, always lead with a benefit, like if you buy product X, you’ll also receive Y. This incentivizes customers to purchase, without devaluing your existing product.
Connect with your customers after they purchase through Email Marketing. Following up with customers will help to drive repeat purchases, as you are reminding people of who your brand is and what you offer. But make sure not to overwhelm or spam. Create a manageable content stream that is relevant, connected to your product, and adds value.
When to expand your offering into B2C
D2C brands don’t stay D2C forever. Often if a brand is doing well, they’ll look to expand into retail or online marketplaces. To convince a buyer to lean in, you'll need to build a killer trade story, packed with real-time data on your brand, competition and category.
If you need help building your case, ProQuo is the ideal partner. Our always-on platform monitors how your brand is performing in the market, against your competition. Nothing draws a retailer in faster than a brand with an understanding of the changing dynamics in their category and a custom action-plan that will deliver sure-fire growth to the brand and the category. So why not look into it today?