In a crowded online shopping market, consumers appreciate brands that can deliver streamlined and specialized experiences. Brands like Warby Parker, Smile Direct Club, and Casper have become so popular because they offer the simplicity of shopping online while catering to each shopper’s unique needs and preferences.
This type of business model is known as direct-to-consumer (DTC) commerce, and evidence suggests that transitioning to this selling strategy is going to be a major trend far beyond 2021.
In this guide, we’ll cover what DTC entails, benefits of this business model, and how to implement the best DTC strategies in your own business.
Definition of DTC eCommerce
DTC companies cut out the middleman by selling directly from the manufacturer to the customer. The simplified model eliminates any need for marketplaces, physical stores, or third-party sellers. Digitally native DTC companies have the unique ability to offer high-quality and customizable items at competitive prices.
One great example of a DTC brand is Stitch Fix. The actual business model is simple: customers fill out a quiz about their personal style preferences, budget, and types of items they’d like. A stylist reviews each individual’s responses to create a totally personalized box of clothing items. If the customer doesn’t like something, they can return the product for free.
The DTC model is an excellent way to build consumer loyalty. As the manufacturer gets to recognize the likes and dislikes of each customer, they can deliver highly customized recommendations and experiences that can’t be duplicated by any other site or retailer.
Benefits of DTC eCommerce
One of the best parts about DTC is that it’s completely accessible to businesses of all sizes, whether it’s a start-up or a decades-old international brand. With a traditional business model, launching a new product can take several months or years before it’s available to customers. It’s time-consuming and risky, which can spell disaster for any organization.
DTC brands, on the other hand, have the capability to manufacture new products in small batches and test them in specific markets. They can get direct feedback from consumers and make tweaks before releasing the product on a larger scale. It can save companies time and money while speeding up the process of innovation.
Winning DTC Strategies for 2021
Since DTC companies are going to continue growing in popularity and prevalence online, successful brands will have to go above and beyond to outshine their competitors. For businesses hoping to carve out their own niche in DTC eCommerce, try these tips to attract customers and cultivate loyalty:
- Try a subscription-based model. Subscription packages that allow customers to cancel at any time can be found everywhere, from streaming services to razor companies to toothbrush brands. The convenience of getting personalized products delivered on a routine basis can give consumers peace of mind, ensuring them that they’ll never run out of their favorite items. Subscription services are excellent for boosting customer retention rates, and the recurring revenue every month or quarter can help you rapidly expand and grow your company.
- Create rewards programs. Who doesn’t love prizes and free stuff?! Create a referral program, a brand advocacy program, or other type of system that rewards customers for making purchases, sharing posts on social media, or inviting others to check out your products.
- Encourage UGC. User-generated content, or UGC, can do wonders to spread the word about your brand or product to the right audience. If a brand makes a positive claim about their own product, most people will be at least a little skeptical. However, seeing positive social proof from a real customer can motivate potential customers into making a purchase!
- Use a fulfillment center. One potential barrier of the DTC model comes down to logistical and storage concerns. Not every start-up or small business has the resources to manufacture, store, pack, and ship from a single location. Amazon is a popular choice for fulfillment centers, as the company will take care of all your storage, packaging, and distribution needs.
- Be authentic and transparent. Online shoppers are wary of any companies that make claims about their values or practices without providing any proof or further information. Customers want to support companies that share their own values and are committed to making the world a better place. DTC brands have the opportunity to transition to more eco-friendly production methods, only use sustainable materials, give money back to local communities or charities, or an array of other genuine and compassionate actions.
Transitioning to DTC
Whether you’re curious about transitioning from B2C to DTC, launching your own DTC company, or learning more about DTC strategies, check out B2Commerce for expert advice and guidance. The talented team of developers is happy to help with every step of your eCommerce journey, from designing a website to performing ongoing maintenance. Click here to connect with our team and get your own personalized solutions!
