D2C Ecommerce is Flourishing & Here to Stay - So, What’s Next?

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By Nidhi Bhardwaj Jun 8, 2022
D2C Capabilities for eCommerce business
D2C Capabilities for eCommerce business

COVID-19 triggered an overnight change in the attitude of brands towards direct-to-consumer (D2C) initiatives. Many consumer segments that were previously reluctant to shop online started buying products via web stores. This was due to the fact that retail outlets remained closed for several months due to multiple lockdown spells. 

According to a McKinsey report, eCommerce has grown 2 to 3x faster, compared to pre-COVID levels. In 2021, eCommerce accounted for 20% of the total retail sales volume in the US. Americans spent an extra $8 billion online in March 2021, which was second only to the Black Friday sales. 

The message is loud and clear - D2C is here to stay and brands need to invest their time and money in improving and optimizing D2C capabilities to sustain their competitive advantage. 

A solid D2C strategy should focus on providing a great customer experience (CX) and at the same time, allow you to gather useful consumer data, rapidly launch and test new products, personalize the consumer experience, and grow your business.

How can brands make the D2C customer experience seamless?

The number of consumer brands selling online has remarkably increased in recent years. However, a vast majority of them sell their products through intermediaries, such as retail partners, online marketplaces, and specialized distributors. This limits a brand’s interactions with its customers since the customer touchpoints are managed by the retail partner or the distributor. D2C demands closer customer interaction, which makes it critical for you to manage the complexities around:

  • Data 
  • Cart 
  • Customer Experience

Top challenges faced by D2C eCommerce companies

Data management challenges

According to McKinsey, “consumer-insights generation is a common reason to set up a D2C business.”

The D2C model allows brands to directly access consumer data, which can be leveraged to deliver personalized experiences. Here are a few data management challenges faced by D2C eCommerce brands today:

  • Collecting insightful data points about customer behavior and engagement by churning myriad amounts of data, scattered across various systems or digital selling points. 
  • Keeping a close watch over customers’ online behavior, as well as seasonal shopping patterns and trends, to take timely and decisive action.  
  • Legacy tech increases siloed data and complicate data analysis and insights generation efforts.
  • Protecting sensitive information and ensuring compliance with the data regulations in force. 
  • Inability to collect relevant data, identify duplicates, and refine data.
  • Lack of a systematic approach and technical infrastructure that help translate data into business value.  

Cart management challenges

Several D2C companies struggle to integrate their paper documents, brochures, product catalog, and other key information into their website’s online shopping cart. This hinders them from providing their customers with up-to-date product information. Failing to update products, services listings, and inventory data online can reduce sales volume.

Another major business challenge in D2C eCommerce is shopping cart abandonment. It occurs when customers add items to their shopping cart but leave before finishing their purchase. According to Baymard Institute, the average recorded online shopping cart abandonment rate touched 69.82% in 2021. Extra shipping costs, high taxes, long or confusing checkout processes, mandatory account creation, comparison and window shopping, absence of desirable payment options, payment security concerns, no discount or promo codes, perplexing return and refund policies, slow delivery speed, and eCommerce app’s performance issues are some of the reasons why shoppers abandon their carts.

Customer experience management challenges

The benefits of selling directly to the consumer are manifold. However, just 60% of consumer goods companies feel that they are moderately prepared to seize D2C eCommerce growth opportunities. From packing the product, and delivering it, to handling and resolving the complaints related to the product, D2C brands have a lot on their plate. 

As your D2C business grows and the customer base expands, the volume of orders, as well as product grievances, also increases. User experience is highly critical for getting repeat orders and obtaining new customers. Delivering a seamless, connected experience across all digital consumer touchpoints is the biggest challenge that D2C brands need to overcome. 

Achieving operational breakthroughs in D2C eCommerce

Leverage the right technology to unify your customer data

D2C online retailers can reduce their data management and processing workloads by adopting an all-encompassing data management solution that fits together different pieces of marketing technology:

  • Evaluate your current technology stack and look for opportunities to centralize multiple data collection points and eliminate unwanted tech. 
  • Unifying your data sources gives your marketers more time to focus on personalization strategy, content, and creatives. 
  • D2C eCommerce brands should have direct real-time access to customer data and insights to make well-informed decisions. For instance, service agents can leverage the data from customer interactions to provide the next-best actions or offer product recommendations.  

By integrating your Customer Relationship Management (CRM) software with a robust Customer Data Platform (CDP) like Acquia or Salesforce, you can unlock and unify your customer data to generate rich insights that drive customer engagement. CDP helps combine customer profile data with digital engagement data and transactional data to create a 360-degree view of the customer, across all their interactions. The CDP integrates in real-time with your CRM, web and mobile apps, analytics, marketing automation, and other customer engagement platforms to ensure that your customer data is up-to-date and valuable. 

Outsource shopping cart management 

To decrease your shopping cart abandonment rate and increase conversions, you need to optimize your shopping cart page by keeping it clean, simple, and fresh.

  • Make your checkout process easy and fast for your customers. 
  • Be transparent about all costs and allow customers to review the final price before proceeding to the payment. 
  • Including progress indicators and product thumbnails throughout the checkout process will help retain customer trust. 

Outsourcing a labor-intensive function like shopping cart management will reduce your unnecessary overheads, improve business efficiency, and support customer retention. Srijan’s eCommerce app development experts employ the best and latest technology to enable seamless navigation between your application’s cart and store, optimize page load speeds to offer a speedy checkout experience, integrate AI chatbots to provide live chat support to your customers and offer cutting-edge payment integration options that will entice your customers to buy. 

We can also help automate your workflows to handle the administrative and organizational tasks of your eCommerce business. Srijan helps D2C eCommerce companies to leverage marketing automation capabilities for running abandoned cart recovery campaigns. This allows you to automatically send scheduled reminder emails to shoppers who abandoned their carts. Thus, you can remind your customers to come back and review their purchases, announce deals, and suggest product recommendations that will support upselling and cross-selling to boost revenue.

Delivering unparalleled CX in the D2C business model

A powerful CX strategy goes a long way in sustaining and acquiring more customers. Studies have shown that a 5% increase in customer retention can increase company revenue by 25-95%. D2C retailers can build a robust CX strategy by following these tips:

Ecommerce - CRM integration:

By integrating your D2C eCommerce website with a robust CRM tool, you can enjoy the following business benefits:

  • Follow order status updates, track inventory and shipment, and enable customers to stay informed about their merchandise’s delivery. CRM allows omnichannel retailers to collect information about their customers across multiple channels.
  • CRM - eCommerce integration offers your business a centralized location to store customer data. This supports all your marketing activities, from planning to targeting and execution. Personalized marketing will have a direct impact on your online store’s income. 
  • Customer service or sales reps can readily access customer details, including orders, payments, and even products viewed, which allows sales teams to upsell or cross-sell more effectively.
  • Address client concerns before major escalations by accessing the behavioral data of customers. This increases Customer Lifetime Value (CLV) and ensures improved customer retention
  • CRM integration minimizes manual data transfer errors, which can directly impact sales and customer loyalty. This minimizes your losses and costs. 
  • Better customer analytics and monitoring improve your competitive advantage, as you can always approach every customer with personalized selling pitches.

Ecommerce - CDP integration: 

With CDP integration, D2C eCommerce can benefit from customer insights derived from different channels. 

  • CDP helps centralize your customer data into one consistent data platform. This allows you to generate relevant, actionable customer insights that can go a long way in building lasting customer relationships.  
  • CDP solutions integrate with a rich set of applications and offer prepackaged connectors and data flows. 
  • Helps collect, organize, and consolidate customer data to build comprehensive customer profiles. This allows marketers to deliver highly personalized experiences. 
  • A CDP tool serves as a single source of truth by unifying all data silos. 
  • CDPs provide tremendous value in the current age of data privacy and are safe enough for customers to share their data. Hence CDP integration with e-commerce ensures both data consistency and data privacy. 
Focus on personalization:

Consumer goods companies, that adopt a D2C eCommerce strategy, should identify what drives consumers’ choices in order to personalize customer experiences, starting from discovery, purchase, and right up to post-purchase. The one-size-fits-all approach to retail is taking a backstage with customers demanding personalized and relevant experiences across all digital sales channels. Winning in D2C eCommerce requires a CX personalization strategy that offers a differentiated experience. D2C retailers enjoy the distinct advantage of access to first-party data, which allows them to provide a consistently optimized experience across all sales channels. 

Access to first-party data enables D2C eCommerce businesses to:

  • Personalize every interaction with the customer
  • Tailor-make content to match shoppers’ expectations
  • Seamless customer engagement across all digital sales channels
  • Deliver personalized product recommendations 
  • Build customer segments to make personalized promotions and offers
Leverage headless commerce:

Invest in a headless CMS that can offer both communication capabilities and transactional features. Headless or decoupled architecture separates the presentation layer (front-end) from the back-end services and logic. It allows users to create, manage, store, and publish content across the web, mobile, and other digital channels from a centralized hub. With a headless platform like Drupal that combines both content and commerce, you can deliver experience-led eCommerce. Drupal’s data-driven approach to eCommerce allows you to build:

  • Dynamic decoupled storefronts  
  • Multi-channel eCommerce management
  • Advanced integrations with platforms like Magento, Shopify, and BigCommerce
  • Custom-built APIs for marketplace integrations
  • A vast range of entities and plugins that provide a complete user-centric commerce experience
  • Make changes instantly to your eCommerce application, optimize your app quickly, and offer rich user experiences.
Get the economics right:

A D2C eCommerce business can turn into a profit center by carefully planning its revenue goals and keeping its costs in check. Keeping online prices at par with retail prices is a must to meet the revenue targets. Online D2C brands can justify their premiums by offering free delivery and returns, product personalization, and other unique online pricing schemes. This helps increase the frequency of purchases and sustain brand loyalty. 

D2C brands need to effectively utilize both paid and owned media investments. This allows them to optimize marketing costs and reduce the CAPEX needed for starting new projects and investments. According to McKinsey, acquiring a new customer can be up to five times as costly as retaining an existing customer. Brands need to devise strategies to ‘lock in’ their customers by offering compelling online loyalty programs, targeted offers and recommendations, and paying incentives for subscriptions. For example, Gillette's D2C channel encourages shoppers to subscribe to razor-blade delivery by offering the first kit for free.   

Staying ahead of the curve

To ensure a successful D2C business, every digital retailer must consider the following factors:

  • Robust data management methods. It is crucial to comply with local, state, national, and global data laws and regulations.
  • Seamless payment and accounting systems to manage transactions and comply with tax regulations. Ensure that all financial management solutions (including third-party tools) comply with Payment Card Industry Data Security Standard (PCI DSS) to ensure data protection and security of credit cards and other digital modes of transactions.
  • An optimized order processing and fulfillment model that ensures fast, on-time deliveries for both bulk shipping, as well as small quantity shipping. 

With shopping behaviors changing unpredictably, it’s important for eCommerce brands to scale their D2C presence and connect with their customers online. Offering a compelling experience requires adopting the right technology, data and analytics, and an agile operating model. All these elements together will help you achieve a significant breakthrough in the D2C eCommerce space.  

If your company wants to implement a CX-driven, data-backed D2C sales strategy, connect with our team right away. 

 

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