Launching Your Direct to Consumer Evolution
Creating a Single Channel for Optimized Reach
The indirect brand economy is rapidly approaching levels of extinction, propelling this particular business model into precedents utilized solely for case studies researched by graduate students in their first year of business school.
While some may argue this as being overstated, the upsurge of companies looking to implement a direct to consumer (D2C) initiative is evidence to the contrary. While brands consider a D2C strategy, cutting through the marketing noise is the first hurdle. Equally important however, is having a responsive supply chain that can meet customer expectations. As these supply chains become increasingly extended, they become increasingly complex.
One successful approach is employing a customized International Transportation Management (ITM) solution. The ITM platform gives a D2C brand immediate access to a well-developed supply chain that includes: Carrier Procurement, Transportation Management, Document Preparation, Worldwide Customs Clearance, Financial tools, and Compliance and Regulatory support. Additionally, the model provides warehousing and fulfillment services, forming a unified channel from manufacturer to consumer. Laying a strong marketing platform on top of an ITM platform creates a single channel for optimized consumer reach and Amazon-like capabilities.
Why Adopt a D2C Business Model?
Generalized commerce is evolving. The need to adapt with the progressive model is critical to future scalability and overall business development.
Multichannel retailers with like-minded supply chains are deteriorating, and they’re deteriorating because of their small margins. The continual rise of technology and online accessibility has reduced the need for traditional brick and mortar retailers thus decreasing any warranted justification for the excessive overhead.
From 1879 to 2010 we saw the predominance of larger corporations sell their products through legacy stores, who today, are struggling to even keep their doors open. However, this past decade, we’ve seen a progressive shift to online ordering and eCommerce products which has essentially altered primary channels used by these companies to get their products to their customers.
“Most retailers are too risk-averse. The decision to stock a new innovative product without a sales history is most likely to be deemed risky.
With D2C, manufacturers can mitigate these risks by allowing them to launch a new innovative product on a smaller scale. Manufacturers can develop a specific product, test it within a very tight demographic, and then get their feedback. This enables large manufacturing firms to understand what their customers love and hate about the product so they can make the required adjustments where appropriate.” [Sam Saltis, Core DNA]
This evolution has shrunk business on a comprehensive level and in some cases simplified overall growth.
Nearly 67% of consumers expect direct connectivity to a brand. If your customers expect digitized convenience, shouldn’t you provide the solution?
Your product is unique to your brand – by offering a D2C model you maintain complete creative messaging and marketing control by eliminating the middleman, thus increasing the lifetime value of each customer you sell to.
The Metrics that Actually Matter
If you’re not measuring, you’re not growing. We believe that social media’s dominance regarding how company’s market online today has erroneously skewed the metrics they’re predominantly paying attention to.
For example: you run a Facebook ad and measure total revenue but neglect to differentiate between online and offline transactions. This is a vital mistake.
The problem is mainstream indicator misguidance and their absurd obsession with trending hashtags. Hashtags aren’t revenue producing and neither are any other of these soft performance indicators you have been sold on to prioritize.
Moral of the analytics story – leave the old metrics in the abandoned store front along with the relapsed supply chain business model.
Following CLN’s Triple M Protocol: The Metrics You Measure, Matter:
· Track orders / purchases
· Track repeat customers / clients
· Track the value of an average order
· Track the lifetime value of revenue
“What CPGs [Consumer Packaged Goods companies] lack more than anything is actionable consumer data. A DTC engine allows them to collect insights directly.” [Brian Cohen, head of digital integration at marketing agency Catapult]
Remember: If you can’t measure it, you can’t improve it. Stop wasting your time on un-optimizable KPI’s.
Operations Gets a D2C Business Makeover
It goes without saying that transitioning your business over to a direct-to-consumer model will alter the workflow of most operational sectors and positions within your company, while customer support and customer interface increases as a heightened priority to be ranked accordingly in-house.
One of the biggest complexities to come from a D2C model is the shipping and logistics sector that wasn’t necessarily there before. Outsourcing your logistics then becomes a viable investment enabling you to gain expertise while eliminating the need for substantial overhead. Once these procedures are effectively implemented, systems become practical machines of efficiency.
In order to fully adopt a successful D2C model, you must first become native to the ever-expanding web. Technological comprehensiveness will be the deciding factor moving forward in regards to business success, scalability, and overall development.
But don’t take our word for it:
“By circumventing traditional channels, designing glasses in-house, and engaging with customers directly, we’re able to provide higher-quality, better-looking prescription eyewear at a fraction of the going price.” -Neil Blumenthal & David Gilboa, co-founders and co-CEOs, Warby Parker
CLN Worldwide offers exclusive International Transportation Management expertise with complete access to our warehousing and fulfillment services, creating a single channel for any D2C company needs. Your website plus our backend support and solutions driven mentality couple to generate capabilities far outside the typical scope of your current business model.
We help clients navigate complicated areas of international transport, distribution, customs and regulatory compliance. Our primary focus is not on an individual service offering but rather a comprehensive approach to effectively managing and optimizing your supply chain.
If you have any questions regarding the evolution of your business model, or would like to discuss how to optimize your international business, please reach out to us here today. We would love to chat with you.