The D2C model has been around for a while. Brands such as Gymshark and Dollar Shave Club reinvented how to do business by using new and innovative models when many brands were unwilling to break from tradition.
Over the last two years, as physical stores were shut, and online channels came to the fore, the D2C model proved a natural choice for consumers. But the shift in consumer shopping behaviour is not going to revert back to how it was pre-pandemic and many brands are eyeing the opportunity that D2C offers. In a recent survey of CMOs in the UK, undertaken by Multichannel commerce platform ChannelAdvisor and research firm CensusWide, 47% of respondents said that over the next 12 months D2C channels would offer them greater control over how their brand is portrayed, while 43% said they are excited about the valuable first-party data that D2C will offer.
D2C brands get their value from their close proximity to the customer. Interactions, feedback and data are all used to drive product development, innovation and accelerate growth. The renewed focus on first party data is another reason that traditional retailers are considering the D2C route, as brands that own the consumer relationship will be better placed to retain and nurture their customers.
But it’s important to remember that D2C is not just a sales channel. Delivering great customer experience at scale with ever more personalised offers, and a value exchange that really resonates requires a different approach to the one that traditional retailers have employed.
A truly omnichannel approach means brands will have to connect both front- and back-office systems to be able to sell across multiple channels in realtime. Advertising activity will also need to shift more towards direct response and social commerce.
Developing a centralised and robust customer data platform will be essential in the pursuit of relevant personalisation, a product innovation, whilst online customer service requires proper investment.
And finally, and arguably the most important, given the ongoing supply chain issues, will be a payment and fulfillment operation that works in real time, 24/7 with warehouse and transportation management.
Getting this right will mean proper investment in cloud technology, bringing new ecommerce and marketing skills in-house, and looking for new partners to complement and support the operational side of the business model.
There is arguably no other area of commerce at the moment as exciting as DTC, and organisations such as the Internet Advertising Bureau have called it the future of retail. But don’t make the mistake of thinking that by installing the right technology and developing the right delivery ability is the path to success.
Success in DTC is built upon delivering a great end to end customer experience. It is in essence a value delivery system and that requires skills and a change of mindset. The customer experience is dependent on the culture and the organisation that underpins the brand. Now, more than ever, you need a talent strategy that brings in the veteran retail and marketing skills that are needed to build compelling brand experiences and customer advocacy. Don’t rely on the data and technology to set you free, you need people who know what to do with it.