Guest blog: Direct-to-Consumer- Successful in Global E-Commerce
What Anker has pioneered in the consumer electronics sector is now being seen with increasing frequency. In recent years, a growing number of successful brands have appeared on the global e-commerce landscape, many of which owe part of their success to the direct-to-consumer strategy exemplified by brands such as Nike.com or MyProtein in their online and app stores. Many benefit from global marketplaces such as Amazon, Zalando, and others, which make brands seamlessly accessible to smartphone users.
What does direct-to-consumer (D2C) mean in global e-commerce?
Direct-to-consumer describes the direct sale of brands from across the globe to the end customer. Intermediary middlemen such as wholesalers and retailers are left out of the equation. A comprehensive online presence and direct customer contact are usually the focus of the brands here, as D2C brands are very customer-centric and can thus maintain a more personalized relationship with their customers. Customer reviews, questions, and ratings are vitally important here due to the customer-centric approach. Eventually, consumers have the opportunity to approach products directly through marketplaces, brand-owned online stores, and mobile apps. Interestingly, companies do not have to restructure their entire sales force, as D2C works exceptionally well as a supplementary sales channel.
Advantages of direct-to-consumer
Complete control over all sales channels
The D2C business model is interesting primarily because global e-commerce is often accompanied by a certain loss of control over the presentation of the brand. In contrast, the direct-to-consumer approach allows complete control over how products or services are presented. This includes the customer experience and how reviews are addressed in this framework, pricing policies, and all sales channels. This allows companies to position and sells themselves more successfully in international e-commerce with a clear and targeted brand strategy.
Global D2C growth through brand trust
Direct-to-consumer brands are able to gauge the sentiment of their customers and potential customers through close interaction with consumers and assess customer satisfaction via reviews and questions on platforms for specific products. Customers are opinion leaders, and D2C Brands know this. Therefore, consumer opinions are actively included in the further development and improvement of products, and direct exchange is enthusiastically sought. This creates a large volume of data in the form of customer opinions, which enables a data-driven and efficient customer experience strategy.
Big Data in the direct-to-consumer strategy
With the help of big data analytics, very large volumes of data can be evaluated and utilized for marketing and product development. In this way, products can be optimized, errors corrected, and weak points remedied. Because customers feel noticed in this way, they have the potential to become an organic brand ambassadors for a growing community. Here, companies can make use of professional review management software such as the Review Manager from gominga to manage, view, and evaluate customer opinions in the form of reviews and questions on marketplaces and online stores in a bundled format.
Direct-to-Consumer is profitable
D2C is also more profitable than wholesale due to the lower number of intermediaries, and growth opportunities. As a rule, platform-based direct-to-consumer sales are significantly more cost-effective and easier to implement on a global scale than the expansion of stationary trade. The direct-to-consumer strategy places great emphasis on problem-solving, which is gaining in importance above all else in the increasingly complex global e-commerce sector providing a decisive advantage.
Disadvantage of direct-to-consumer
As many advantages as the D2C approach brings, a certain investment is, of course, necessary. Selling through direct-to-consumer requires much additional effort, time, and resources, particularly at the beginning. Since the company only communicates directly with the customer, it has to manage all marketing, support, logistics, and sales. Often, there is a significant increase in effort, especially in marketing and support components. In already established companies, the changeover to D2C also represents a challenge not to be underestimated, both organizationally and culturally, should direct sales be first introduced.
Marketplaces as a tool for global direct-to-consumer sales
Marketplaces have become an indispensable part of the global e-commerce landscape. This also applies to the sales strategy of brands and especially D2C brands. While an up-and-coming direct-to-consumer brand can generate traffic for its own online store with relative difficulty, marketplaces such as Amazon and others offer completely different opportunities. Marketplaces help to increase visibility and sales because customers trust, know and enjoy their ease of use.
Thus, the presence of various brands accumulates significantly more reach, and consequently, more prospective customers on marketplaces. Marketplaces can even support the respective brand strategy, as there is a very large selection of general marketplaces but more specifically, product-oriented marketplaces. For example, if one wishes to be noticed as often and as present as possible, Amazon or Zalando might be the best choice. However, small specialized marketplaces may be the superior option if the goal is more product knowledge and specific clientele. ChannelEngine has created an overview of various marketplaces. Particularly on transnational platforms, there is often great potential to be earned.
Direct-to-consumer on marketplaces enables brands to connect with their worldwide customers directly
Based on this platform diversity, there is near-endless potential for the development of direct-to-consumer brands (D2C) and independent sales channels. Internet users can be funneled to relevant e-commerce sites via a variety of websites, search engines, or social networks, where they can buy desired products with a few simple clicks. Through review management, such as from gominga, all reviews and questions from customers on these platforms can be used to further improve products and facilitate the best possible customer experience at the digital POS. Thus, even country-specific differences can be taken into account and measures can be easily adapted. Properly applied direct-to-consumer sales make global e-commerce vastly simpler, as long as you listen to your customer's voices.