DTC: 3 ways to quickly add a Direct to Consumer channel to your proposition
In part two of our series of articles about Direct to Consumer e-commerce, we discuss how you can quickly add (DTC) to your proposition. In part one we introduced DTC and explained why some brands have embraced this as their only e-commerce channel.
As a quick recap, in our first blog we explained how DTC offers greater autonomy and control over your customer experience across 3 key areas: Data, Experience and Profits.
Adding a DTC proposition. What’s stopping you?
Renewed relationships with consumers can primarily create efficient new sales channels. Add to this powerful feedback mechanisms, irresistible experiences, and even the possibility to unlock entirely new business models. On the other hand, there’s a reason why ex-Glossier executive Henry Davis described the dynamic between brands and retailers as a symbiosis. One where both parties are stood “with guns against each other’s heads.” That is to say, even if you understand the potential of a reinvented distribution strategy, selling DTC for the first time is similar to building a new bridge whilst simultaneously trying not to burn existing ones.
Let’s address some ways for you to make the shift without alienating your distributors – giving you the imperative to act quickly.
1. Target underserved segments with DTC
Aspiring DTC enterprises can avoid treading on the toes of retailers by catering to customer segments that have been poorly served or ignored by traditional distributors. This is also where you can be creative, and test-drive new ideas before launching them on a larger scale. For instance:
- In 2018, Verizon quietly launched Visible. This product offers no-contract mobile service subscriptions for a flat fee. It doesn’t compete with Verizon’s massive distribution network selling higher-margin services.
- K-Swiss gained notoriety in the 1960s for becoming the first fully leather tennis shoe. They re-entered the market after more than 50 years but with a new proposition – to outfit and inspire the next generation of entrepreneurs. Trailblazers incuding Gary Vaynerchuk got their own custom sneakers with the brand.
2. Create new DTC product lines or bundles
Creating a unique D2C product or bundling existing products into a package helps build a direct line to customers. Simultaneously, it preserves relationships with distributors that focus solely on other product ranges. For example:
- Absolut Vodka turned their holiday campaign into the foundation for their direct-to-consumer strategy. They offered gift-sets all year round, but they are solely available on the company’s own website.
- Maille Mustard has been sold through distributors to loyal customers since 1747. Its parent company Unilever decided to add a DTC strategy to the mix, by offering a premium product range to a particular subset of mustard connoisseurs directly.
3. Enable retailers in different ways
Brands can borrow horizontally from the likes of heavy equipment manufacturer Caterpillar. This brand has been historically resold by local service partners. Caterpillar introduced their own platform for vehicle management that they sell directly to customers. It provides insights on the equipment lifecycle during which you can gain valuable information. Firstly, on how it’s used. Secondly about the vehicle’s health, and finally its location. This cuts out the middleman to simultaneously sell directly and collect data. BUT, it similarly benefits local partners by sending alerts to customers when they need to get their equipment serviced.
Customers stay safe and up-to-date. Brands regain complete control and insight into their customer behaviour and product lifecycle. And retailers retain a small but significant slice of the pie.
It’s a win-win-win.
Conclusion: be more DTC – but act quick.
To sum up: Rather than remaining stuck in a stalemate with retailers, make a bold decision to add DTC to your mix.
Making the transition means no more concerns about marketplaces and middlemen keeping your own customer data from you. No more failures to safeguard your customer experience. And, no more constant concern over undercutting partners through re-calibration of pricing.
You don’t have to sever ties totally with your distribution network if it doesn’t make sense (for instance, if it means cannibalizing your biggest sales channel). You should, however, take small, significant, strategic steps towards reclaiming retail’s greatest asset – your customers.
In short, your customers will continue to change, and having the power to keep up with them isn’t only a chance to win the retail race. Above all, it’s imperative for the survival of your brand.
Want to get started with DTC, and delight your customers with exceptional delivery? Let’s talk!
Paazl is a leading shipping service provider (SSP) for brands & retailers in e-commerce. Its all-in-one, multi-carrier platform unburdens the delivery process across webshop, warehouse, customer service and returns. Paazl enables logistical flexibility, consumer loyalty, cost transparency and (inter)national growth. Customers include industry leaders such as G-Star Raw, Rituals, VanMoof, Tag Heuer, Leenbakker and Under Armour.