Why is Nike, the undisputed leader in the sports apparel sector, is shifting to direct to customer selling?
DTC selling is reshaping the world of eCommerce. More brands are looking to cut down middle entities and interact directly with their customers. Let’s jump into why direct to consumer selling is so critical for retail business brands.
Customers want a better experience
Customer experiences continue to rise. Thanks to technologies like mobile and social, consumers demand a more seamless experience. In fact, customer experience is a modern-day battlefield for businesses, and direct to consumer brands are likely to have a competitive advantage.
When brands and manufacturers sell through distributors, they have bleak control over how the product is sold. If the retailer treats the customers well, they’ll come back. If not, then you’ll lose valuable customers – you are at the mercy of your local distributor. The best direct to consumer brands focus on envisioning the journey of their customers and devising a strategy to make it a reality.
However, direct to customer selling doesn’t necessarily result in better customer experience. Such companies need to have the right insight, culture, and processes in place to provide a top-notch consumer experience. Therefore, it is critical to understand what is direct to consumer brands and how they interpret their customers.
Companies want to develop a relationship with customers
Gone are the days when companies didn’t bother to know and interact with their customers. Now, brands want to control their brand’s story and communicate directly with their customers.
If a customer shop online or from a retailer’s store, you’ll make a sale, but there’ll be no contact between you and the customer. Instead, the customer will get loyal to the retailer. And since a typical retailer sells products from multiple brands, there’s no guarantee that the customer will purchase a product from your brand in the future.
Since direct to consumer eliminates such middle entities, you can interact with your customers and provide the desired experience. In fact, a user-facing brand experience paired with D2C sales lets companies control and cultivate relationships with customers.
However, building direct to consumer companies can be challenging and presents some complications. Most importantly, direct selling eliminates selling through retail partners, which, in some cases, can be highly profitable. Let’s take the example of Nike, one of the direct to consumer brands. The company’s aggressive push for direct sales has affected its relationship with retailers.
To avoid upsetting retail partners, direct to consumer brands require a more comprehensive understanding of their customers, and how to find the right balance. For instance, some retailers prefer buying from retailers because they get a broad range of options to choose from. Companies need to figure out which consumers want to buy directly from them or from retailers, and why.
Brands need to leverage the power of digital marketing
The importance of digital marketing is apparent to every brand. It allows you to engage your customers and sell to them on multiple channels. In traditional selling, however, brands are dependent on retailers, which limits their marketing efforts. Since D2C eliminates the need for a middleman, brands can tailor their marketing strategy as per their requirements.
D2C also allows brands to increase their online sales. When a retailer sells your products, your marketing strategy can center on generating brand awareness only. But when you sell directly, you can allow your customers to purchase directly from you instead of making them visit retailer websites and provide a better online shopping experience.
Additionally, you can also step up your social media marketing efforts by including a “Buy Now” button to your social profiles. All in all, D2C allows you to streamline your marketing efforts and improve your ROI.
Collecting customer data is more important than ever
Data is the new fuel for businesses. In fact, most brands turn into direct to consumer companies because it provides the opportunity to collect massive amounts of customer data.
What is direct to customer brands? They are companies that focus on building the lifetime value of customers by providing personalized experiences. And it’s data that helps them deliver these personalized experiences.
When you sell directly to your customers, acquiring their behavior data becomes easy. Besides, you can get data from multiple channels and integrate it to improve the end-to-end customer journey. This information allows you to establish authentic engagement with customers and understand what a customer really wants. But even if you’re not a DTC company, achieving customer intelligence should always be on your priority list.
Dependence on retailers can lead to loss
Retailers need to think about the shelf-life of each product. If they’re selling products from multiple brands, they need to maximize profits by displaying the best-performing, in-demand items.
And if your product is not performing well at the moment, the retailers can sideline your it. This can lead to hefty losses as your customers will never be able to find out what you have for them. Direct to consumer companies can overcome this problem. Since they don’t need to rely on third-party retailers, they can market the products they want customers to buy.
However, this approach can sometimes backfire, especially if customers didn’t like what you’re trying to sell to them. Therefore, the best direct to consumer brands ensure they know what their customers are exactly looking for.
What is direct to consumer brands?
Now that you know the relevance of DTC selling, let’s take a look at the best direct to selling brands in the world.
- Dollar Shave Club
- Warby Parker
- Cards Against Humanity
- Blue Apron
Wrapping it up
Forget about Nike, companies like REI and Timberland are finding success in expanding their DTC channels. While moving to DTC selling might require significant strategic changes, the pain is worth it. Direct to customer selling helps you stay closer to your customers and better understand them. And with data leading the way businesses function, DTC is surely the new trend in eCommerce.