Direct-to-consumer (D2C) marketing is fast becoming the route of choice for CPG (Consumer Packaged Goods) brands and manufacturers to go to market directly rather than through an intermediary structure.
This is not surprising, as the advantages of going direct to the end user are numerous, some of which include: Breaking down the barriers between consumers and producers, giving manufacturers greater control over their marketing, sales strategy, reputation and brand.
It also helps manufacturers interact directly with their target audience, learning from them and improving their products and services.
Top brands such as office supplies maker Quill have already taken a big step toward direct-to-consumer marketing, and more producers are expected to take that step in 2022 and beyond.
That said, while the barriers to entry for launching a direct-to-consumer marketing model are relatively low or non-existent for manufacturers, it's important to note that you'll be facing retail giants like Walmart and Amazon, who currently have gigantic customer concern.
That's why you must develop a strategy that will help you stand out as a standout brand and disrupt the marketing ideology of your niche.
So, in this article, we're going to show you everything you need to know about direct-to-consumer marketing. But first, what exactly is it?
What is Direct-to-Consumer Marketing (D2C)?
Direct-to-consumer is a low-barrier-to-entry e-commerce strategy that allows consumer product brands and manufacturers to engage and sell directly to their ultimate target audience ( consumers ).
This method provides a bridge over the traditional method, allowing a distributor or traditional retailer to bring your product to market. On the direct-to-consumer side, companies sell their products directly to end users through online media.
As we have already seen in the introduction, direct-to-consumer has many advantages, and competitive pricing is a huge advantage for consumers.
Other benefits include direct contact with end users for producers to better understand their target audience and the opportunity to freely experiment with new product launches by testing new products against consumer segments to gain reviews and feedback.
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Why Choose D2C Marketing Over Wholesale?
Therefore, we have determined that the adoption of a direct-to-consumer marketing approach completely disrupts the traditional model, where email list producers eliminate middlemen or distributors and sell directly to consumers.
However, even if the retailer is eliminated, that doesn't mean the dtc brand doesn't have the retail side of the equation in its strategy.
In other words, opting for the direct-to-consumer route means the producer takes full responsibility for all retail sales within the business as well as the initial production and fulfillment responsibilities.
You might question this approach and ask yourself, why should producers take on this huge responsibility when they can simply continue to sell wholesale to traditional retail stores?
There are two main reasons for this; both depend on the behaviors, expectations and changing needs of contemporary customers.
First, modern consumers want to engage directly with the source when researching to make product selection decisions and branding decisions.
For example, 59% of consumers prefer to research a manufacturer's website, and 55% of them prefer to buy the same way.
Think about it, a customer looking to buy a tennis racket is most likely to visit the manufacturer's website to research before making a purchase, rather than a retailer that sells the same item for more information.
For the sake of argument, imagine if the manufacturer did not provide the required information to consumers looking for it on its website. A particular customer is likely to be frustrated and may opt for a different brand of racket.
So it definitely makes sense for dtc brands to put direct-to-consumer marketing efforts down the pipeline in terms of delivering to consumers what they expect.
It's also important to note that since many consumers choose the source directly; that means they won't do business with a dealer or retailer.
This means that as a manufacturer, you can no longer count on distributors or retailers to sell your products, but must control your sales and marketing strategies.
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What do I need to consider when my marketing activities are direct-to-consumer (D2C)?
If direct-to-consumer sounds more appealing to you than a wholesale approach, and you want to leverage your marketing strategy to acquire customers, there are two main pitfalls you need to be aware of:
1. Make sure your business is 100% ready to move from wholesale to direct-to-consumer
Going to d2c won't just happen, to say the least, you need to put in a fair amount of effort.
For manufacturers looking to transition to a direct-to-consumer model, this involves investing in supporting and training employees, developing new processes and incorporating them into your current processes, and generally ensuring that your business can operate profitably and efficiently in a direct-to-consumer model. in a consumer-oriented marketing model.
Going a step further, you must first have a clear reason for choosing the direct-to-consumer option. You must also be able and ready to communicate this rationale to employees and your target audience in a way that is valuable to all parties.
Without this transparency and clarity, your direct-to-consumer efforts are likely to fail.
However, by communicating openly with your clients and teams, you can ensure that everyone involved and affected by the transition is 100% ready.
2. Prepare your partners
If you decide to opt for a hybrid model that sells wholesale to retailers as well as directly to end users, you risk alienating and hurting your retail partners in making this transition.
Because you sell directly to consumers, you effectively become a competitor to the retail partner who sells your product. As we saw above, when there is an option to buy your product directly from you or through a retailer, customers are likely to choose the first one.
So while you don't want to steal your partner's business, you also don't want your items to remain unsold on their shelves. Rather than cutting ties with retailers entirely, you can also work with partners to find a profitable way forward for both parties.
This may involve only selling specific products directly to consumers or shipping high-performance products to specific retailers, or it may involve such partner retailers taking a more direct approach to promoting your products.
In any case, find an approach that benefits both you and your partner.
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How D2C Brands Market
The most obvious difference between traditional manufacturers and direct-to-consumer brand marketing is that direct-to-consumer businesses completely own and control the end user's customer journey from start to finish.
This is not a job that should be taken lightly. The benefit of this extra responsibility is that d2c companies are free to market their products and brands as they see fit or better, how they know they will effectively engage with consumers and create loyal customers.
Breaking it down into simpler points, direct-to-consumer brands have full control over the following:
Who is their target audience.
How they build relationships with end users.
How brands provide value to their target audience.
As mentioned, one of the main reasons companies have opted for direct-to-consumer these days is that the traditional retail experience is no longer satisfying for modern customers. Therefore, simply replicating the current customer experience is not the best practice for direct-to-consumer brands.
Instead, you have to offer something different in the marketing tactics you use and the channels you use to implement them.
The idea is that direct-to-consumer frees you from the constraints of a traditional business model and enables you to reach your target audience in a way you know they want to be treated.
Whether that means giving them a more personalized experience, delivering high-quality and engaging content, or something entirely different, a direct-to-consumer approach allows you to engage and connect with your target audience more than ever before.
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