What is D2C Ecommerce and How It's Bringing Growth

D2C stands for direct to consumer and is the practice of a company selling its own products directly to their customers without going through an intermediary.

In Ecommerce, D2C businesses are ones that use their online channels to sell directly to their clients instead of doing so through a marketplace or on an online department store.

The practice of selling products through a middle-man company is called B2B (business to business) and applies to both the online and physical retail industries. If you are a brand that manufactures your own products, it is not uncommon to sell through B2B platforms whilst simultaneously running a D2C website.

Is D2C something new?

D2C selling is as old as the idea of selling itself. Traditionally, farmers and craftsmen, would produce their own goods and sell them within their community or at the local market. It wasn’t until the world became more connected that producers started selling their goods to merchants who would then travel further afield to sell their goods for a greater profit.

Everything notched up a few gears in the 1800s when factories started mass producing goods. It was too much work to sell all of that stock piece by piece to individual customers so instead manufacturers began selling in bulk to intermediary businesses who would take care of the rest.

Even in the post-industrial age, D2C businesses have existed in the forms of factory stores located in the immediate vicinity of the production site or used as an outlet to sell outdated or faulty stock to thrifty customers at a heavy discount.

D2C - direct to consumer
More and more producers and manufacturers started selling directly to consumers

However, in the age of Ecommerce, more and more manufacturers are beginning to look to the D2C model. There are several factors for this, including general ones like easier Ecommerce website development, keeping up with competition and changing demands of customers, but also circumstantial ones such as many businesses having to adapt to the Covid-19 pandemic.

Why is Ecommerce a great idea for D2C brands?

The business perspective

Having a website that relates to customers is a must-have. And, extending it to selling directly to consumers can have more advantages than increasing margins value.

Enhanced brand image and authority

A D2C Ecommerce store puts business owners in control of their own brand image. Brand perceptions plays a really important role in the world of Ecommerce, with some experts suggesting that companies should invest as much as 20% of their conversion acquiring budgets into raising brand awareness.

Having your own D2C site makes it much easier to build up your brand image as you can highlight all the best aspects of your business whilst simultaneously launching marketing campaigns and creating content that reinforces this image and drives traffic towards your D2C site.

Full range of products are in one place

“Do you have this exact model, but maybe in black and yellow?”
Customers love to have a plethora of choices in front of them, even if they’re only about to buy one product. Retailers can’t really have a full range of products from one brand, as all the products don’t really relate to their target customers.

Take Nike sneakers for example (and just sneakers). Asos, for example, doesn’t have all of their shoes. ASOS whole buyers pick the trendy models, once that absolutely relate to current trends. They don’t stock golf shoes or tennis trainers. At a Nike store, on other hand, you can find sneakers for all sports.

Nike D2C ecommerce site
NIKE D2C example: No retailers have the full range of all Nike’s products

Having a D2C Ecommerce website offers a customer to find every variant of a model.

With a D2C Ecommerce website brand gets closer to customers

Knowing your customers is the first rule of business and a brand with a D2C website is ideally placed to learn everything they need to know. Ecommerce lets businesses build relationships and understandings of their customers like never before, but it completely relies on quality feedback and data. Both are much easier to gather if the information is coming via your own site. The information collected here can then come to inform strong business strategies in the future.

Buying from a D2C website: Consumer’s perspective

Buying directly from a brand is something that consumers choose, even though they can find the same product somewhere else.

“Being able to choose the exact products they want” is one of the biggest reasons buyers buy directly, according to a survey conducted by Attest. There are more, of course.

Better value for money

Customers will always love great value and D2C brands are a great way for them to get their hands on the products they love at a discounted rate. Without any middlemen to share the profits with, D2C Ecommerce managers are able to offer their customers a better price while still taking home a reasonable share of the profits.

Guaranteed quality

If your brand has a reputation for quality then people will go looking for your D2C site. In fact, ‘affordable quality has been ranked as the most important factor in choosing to shop with a D2C business and is the most common definition consumers have for the term ‘value for money’.

Customers are more likely to convert if they know that what they are getting is worth the money and knowing that they are buying their products direct from the source is a great way to ensure this.

Accountability and security

90% of customers claim that they would buy again from a business that has a really easy returns policy and this is one of the benefits of shopping with D2C Ecommerce brands. Customers feel much more comfortable with businesses when they are dealing directly and this can push them towards converting. Combining a good returns policy with a friendly customer experience friendly website is a great way to bring them on board.

The challenges of D2C Ecommerce

Adding the D2C dimension to the business isn’t as easy as adding an Ecommerce extension to the website. It comes with a series of challenges.

Retailers becoming competitors

The most common problem is keeping the relationship with wholesalers as they could see the brands’ D2C venture as a start of being an unloyal competitor. That’s a common fear, but not a realistic one. There are pricing policies to be put in place when being a producer and having a D2C business.
Also, how many times we see a wholesaler offering a much lower price than a producer? Many.

Developing an Ecommerce D2C business

Creating an effective Ecommerce store is not as simple as just adding a new page to your current website. You will need to build a site that is as good, if not better, than that of the wholesalers. This means that UX must be at the centre of everything you do. This includes creating a smooth shopping experience, having appropriate delivery and payment options, accurate availability information, a powerful search function and everything else you would expect to find on a good Ecommerce site.

D2C ecommerce logistic challenges
Switching to D2C includes serious logistical changes within organisation

Moreover, your site must be robust enough to keep up with the logistical side of things. For an online business, this doesn’t just mean order tracking and warehousing, but also the handling of returns and customer services. This may sound daunting, but it’s not impossible. Remember, every single D2C eCommerce website started somewhere and there are thousands of successful examples out there.

Order fulfilment

Selling to a wholesaler is simple as you normally have a standing order or are given time to fulfil one when it comes. Opening a new D2C revenue stream can make things more complicated as it makes your orders more unpredictable. To combat this, it’s important that you have good product information management (PIM) software integrated into your site.

Furthermore, it is important to note that this can be a big task and you may need to employ people specifically to manage this side of your D2C business. If you are a relatively small team then you need to think about how feasible hiring extra hands could be.

Good examples of D2C sites

D2C is not a new concept, but still, we decided to find some examples to paint the picture.

Dr Martens’ connecting with customers

A brand that needs no introduction, Dr Martens bespoke D2C Ecommerce store carries their company message perfectly whilst also conveying much of their rich history.

They perfectly know why the customers choose them – “as they’re tough” and offer them not just care guides but also style guides that can be used for inspiration.

This layout helps to foster trust amongst customers whilst providing them with an easy to navigate, user friendly, shopping experience.

Dr Martens D2C
Dr. Martens communicates their values on the website and inspires the customers, their website exactly shows what the brand is about

Made: Showcasing the full range

As a bespoke homeware company, Made’s D2C site does an excellent job of showcasing its full range of products. From lamps, to candles, to beds and kitchen furniture, Made’s D2C site offers an easy to navigate website that makes it so much easier for customers to find what they’re looking for and offers them amazing secondary recommendations from their extensive list of products.

Made D2C example
Made example: Showcasing a full range of products

Dollar Shave Club: Clear communication

This brand is all about simplicity and this is perfectly mirrored in their D2C eCommerce site. A simple call to action quickly answers a key customer question and the home page is minimalist and easy to navigate. Dollar Shave Club have used their D2C site to build up an understanding of their customers and their site is clearly tailored to their needs to offer them the best experience possible.

Dollar Shave Club guides their customers to order the right products

Time to start

There’s no better time to start a D2C business than now. Choosing the right partner as a guide through the Ecommerce process is a crucial step forward. Reach out if you need a stable Ecommerce growth partner. We’ve been in the D2C Ecommerce for years with brands like Temperly London, PAUL and PARKA London.

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