We all know about B2B and B2C but how to increase sales in D2C ecommerce?
Choosing the right ecommerce strategy is crucial to a company’s success. If you are wanting to know how to increase sales in D2C ecommerce, you’re in the right place.
- What is D2C ecommerce?
- The difference between B2C and D2C ecommerce
- What are the advantages of a D2C strategy?
- How to increase sales in D2C ecommerce?
- How do you retain customers in D2C ecommerce?
What is D2C ecommerce?
Let’s look at D2C selling in-depth.
D2C means reaching the consumer directly, cutting out the middle man. There is no need for wholesalers, distributors or retailers. The manufacturer - or company that commissions the product from the manufacturer – sells directly to the consumer.
This might be by already being a known brand such as Adidas or Nike (where customers might visit their website to purchase directly) or through a more niche industry such as board games or selling miniature figurines. The likes of Games Workshop sell their Warhammer figures and a lot of their merchandise via a D2C model.
The companies mentioned above don’t exclusively sell via D2C methods. They also use B2C (see below).
Exclusively D2C brands are more likely to be found advertising through social media platforms. These social commerce retailers often direct consumers to purchase their goods through their own store and are much more niche offerings. These can include anything and everything from highly specific night lights to personalised books for children.
Whether D2C is the best approach for a company depends entirely on what they are selling. Sometimes selling via a distributor, wholesaler or retailer will generate just as much revenue as a direct sale. In addition to this, there is a lot more work involved (storing, packing, labelling, shipping, etc.) These all come at an added cost to a business.
The difference between B2C and D2C ecommerce?
B2C is much more widely talked about than D2C ecommerce. B2C stands for business-to-consumer while D2C means direct-to-consumer. Although both have the aim of getting products into consumers’ hands, the approach is slightly different.
B2C businesses might sell their product to a wholesaler, who passes it to a distributor. The product is then stocked by a retailer who sells it to the customer. In D2C, the manufacturer sells the product directly to the consumer via a website or other digital channel.
Depending on your business model, it might make sense to pursue a B2C model alongside your D2C strategy.
What are the advantages of a D2C strategy?
There are a number of advantages that come with a D2C strategy. The most notable are:
- Personalisation and customisation – Because you are selling directly to your customer, it’s possible to personalise the process. Whether this is a handwritten note or customising the product itself, it all adds up to an excellent user experience. This is most widely seen on marketplaces like Etsy or Not On The High Street.
- Guaranteed inventory – Because a D2C model means only advertising what you have, there should never be disappointed customers. With a customer coming directly to you, it is also possible to communicate when a product will come back in stock.
- Increased cost control – When selling via a B2C model, companies rarely have any influence over the price of their product. A large retailer may choose to heavily discount products as part of a promotion, which could harm your brand. There are no such concerns in D2C. You might even choose to never discount at all.
- Greater product variety – Some retailers might not wish to sell your entire product line. If consumers come directly to you, they will have an abundance of choice and you can make a larger sale.
- More actionable data – This is vital to improving your sales approach. When selling B2C, there is very little data that a seller may have aside from volume of repeat orders. By selling D2C, all of the data is available to you. This includes what people were searching in order to find your site through to average order value or percentage of customers that don’t convert.
- Greater influence over marketing and interactions with customers – Corresponding well with increased cost control, brands may choose to operate a D2C model in order to exert greater influence over marketing. Only you choose when promotions occur, and it’s up to you to market them effectively. This can lead to greater brand loyalty and see increased conversions.
- Freedom to control your production and distribution channels – This ties in nicely with offering a greater variety of products and control over inventory. Brands are able to move quickly to replace manufacturers or distribution channels. By being smaller than retailers, there are advantages to being more nimble should macro problems occur.
- Higher margins – Eliminating intermediaries means brands can sell at the same price as a retailer would without any of the other costs. Despite having to pay for shipping and warehousing, margins are often higher in B2C.
How to increase sales in D2C?
There are many ways that a company can increase D2C sales. The most effective include:
- Selling where your customers are – D2C doesn’t always mean selling on your own websites. Marketplaces are growing all over the world and give access to many more sales opportunities. The likes of Catch.com in Australia, Amazon and eBay in the US, or OnBuy in the UK all offer D2C opportunities. The margins might be slightly lower when selling via a marketplace but this is easily made up for when considering how many customers these platforms have.
- Improving product feed data – Many brands and retailers have a poor product feed. A lot of fields may not be filled in, which means in many cases products might not show despite a relevant search. Intelligent Reach offers award-winning software to improve product feed data management as well as other modules to improve sales. Learn more about Intelligent Reach.
- Using reviews and testimonials – Tying in with the product feed data above, make use of your reviews and testimonials! If potential consumers haven’t heard of your brand, they may be uncertain of completing a purchase. The reviews and testimonials show that your previous customers have trust in your offering and can even show on the likes of Google Shopping. Learn more with our Ultimate Google Shopping guide.
- Improving your SEO – Just like improving your product feed data, D2C brands need to improve their SEO to be discovered. This doesn’t just mean improving your website SEO with relevant keywords but also your social media SEO as well. Creating ads that leverage these keywords (or similar) will see more consumers discovering your brand. Using retargeting in your ads will then keep your brand front and centre in their minds.
- A/B testing your product ads – It’s common to A/B test marketing emails but not so common to A/B test product ads. This is crazy because by A/B testing product feeds, customers can achieve huge percentage increases on impressions, clicks and ROAS. Learn more about Content Experimentation.
- Offering something different to the rest – What do your customers want? Who are your brand ambassadors? By answering these questions, it’s possible to offering a different experience for your customers than if they went to Amazon or a leading high street retailer. Offering lower prices might tempt them once, but how to keep them coming back? A subscription model might be the answer, or to have pioneering brand values in the form of always using recycled packaging or donating to charity. These may seem small and inconsequential to you but they can position your brand effectively.
- Discovering the value of referrals – Your own customers are an excellent source of marketing. Why not make use of them by offering referral discounts? Not only does this entice a new customer to buy, but it also encourages a former customer to purchase again. The result is an increase in D2C sales. To keep the word of mouth going, you can try offering better discounts for more referrals, and make them easier to share by using customer specific URLs. Perfect!
- Asking your customers for their thoughts – As you have the data on your customers, you also have their contact details. Use them to send out surveys and ask questions. What did they like? What could you do better? What products would they like to see in future? By asking questions about your brand as well as their spending habits in your industry and in general, you can gain valuable insights that can affect your strategy and help improve D2C sales.
How do you retain customers in D2C ecommerce?
With a smaller business or brand, it can feel difficult to retain customers when selling via D2C. As mentioned above though, there are a few ways to enhance the customer experience:
- Better customer service – If you want your customer to return, make sure that the buying process is as stress free as possible. Consider including constant updates, tracking, and anything else you feel will benefit the customer.
- Loyalty programmes – Similar to referrals, loyalty programmes encourage customers to return. When they hit 10 purchases, you can reward them with money off or a free product of their choosing. This can also be a fantastic way to create brand ambassadors. By treating them in a special manner, they return the favour by filling out surveys or writing social media posts in exchange for discounts. This group of customers are also useful for prototypes or experimenting with new shipping arrangements.
- Easy shipping and returns – Technically this could come under better customer service but it’s so important, it deserves a line of its own. By offering free shipping and returns (or easy returns), your customer will always feel that they come first. By optimising your product data, returns should reduce anyway, as the right customer should be buying the right product from the start!
- Regular discounts and rewards – On a similar level to loyalty programmes, regular discounts and rewards will keep customers returning. It is important to note that you don’t want to do this too often otherwise customers will never pay full price for anything and will always be waiting for the next sale. Setting up discounts is straightforward via Google Merchant Center or Google Merchant Center Next but it’s also possible with Intelligent Reach.
- Email, video and SMS marketing campaigns – By emailing and texting your customers, you will always remain front and centre in their minds. This can be particularly useful if they themselves don’t know when they will be purchasing a product. By remaining warm and friendly throughout, and by offering personal recommendations, your customers are more likely to convert. Alongside this, you can try video campaigns as well such as advertising on YouTube Shorts or by selling on TikTok.
How to increase sales in D2C conclusion
Selling via D2C isn’t easy but there is a reason that a lot of brands are now looking into it. D2C ecommerce not only brings you closer to customers but it also offers huge advantages for businesses willing to put the work in. From data insights to improving margins and maintaining product and marketing control, it allows previously local companies to make it big on a global level.
Wanting to take the next step and improve your product feed data so that it is ready for D2C ecommerce? Book a free product feed audit today.
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