We live in an era of disruption. This means retailers don’t have the luxury of getting used to the status quo; that term can’t truly exist in today’s world of constant flux. Companies need to understand and adapt to trends if they want to remain competitive.
Many brands are seeing how direct-to-consumer sales methods are effective in this current environment. Here are six advantages of direct-to-consumer (DTC) ecommerce.
Absolute Control
Some people balk at the idea of having total control. But for intrepid entrepreneurs, this should be a mouth-watering opportunity. Brands maintain far more control over their products when they take a direct-to-consumer approach.
When you go DTC, you eliminate the middle players. These intermediaries don’t know or care about your products as much as you. So why deal with them? For brands up to the task, DTC can bring an unprecedented degree of control over everything — from marketing to order fulfillment.
Low Risk with High Reward Potential
Organizations need to carefully consider investment requirements and risk when formulating a business plan. Companies that pursue a DTC objective should enjoy relative low risk, while being able to majorly capitalize on successes.
Running a DTC operation tends to les capital and resources than more traditional methods. Yes, you need to put in more work attracting consumers. This, however, leads to outsized rewards when done well. Furthermore, DTC businesses don’t typically require as much initial or operating capital thanks to streamlined logistics.
Richer Customer Data for Analytics
Businesses today need to invest in data. Enterprises that do the most to collect, understand, and act on data will have a massive advantage over those in the dark. Going DTC is conducive to this because there are many opportunities for data collection when businesses are structured this way.
Choosing the optimal analytics for ecommerce can also lead to substantially improved business outcomes. Artificial intelligence-driven analytics platforms are built to help organizations identify trends that otherwise could go entirely unnoticed — and facilitate real-time analytics, limitless scalability, and natural language-powered search functions. All these features taken together provide businesses with all the tools they need to use data to truly understand consumers, which is the basis of effective DTC selling. Every customer interaction becomes an opportunity to improve and refine operations.
Higher Margins
Making money is one of the ultimate existential functions of every business. Being able to maximize profits is inherently beneficial to an enterprise. Going DTC provides organizations with the ability to vastly improve operating margins.
Typically brands and manufacturers are going to have to give up a substantial amount of their profits when working with big-box retailers or other intermediary services. While this may or may not boost sales volume, it can all be for nothing if profits are too low. Selling right to consumers lets brands capture the most profitability from their goods with minimal expense.
Customers Have a Better Experience
The positives of DTC don’t only apply to businesses. There are certainly reasons consumers should prefer this way of doing business as well. Customers are generally going to enjoy a better experience when dealing directly with a brand.
Here are a few points to consider:
- Customers are going to get quicker, more accurate service.
- Shoppers will have access to your whole inventory in one place.
- Online consumers can feel confident they’re not going to be scammed by a fraudulent third party when buying your goods.
- You control every aspect of the customer life cycle—meaning you have the opportunity to cultivate loyalty at every turn.
These are just a few reasons why consumer relationships tend to be better off when brands utilize DTC selling.
More Customer Contact and Branding Opportunities
Every time your employees or products interact with a consumer represents a chance to foster loyalty It’s no secret that boosting customer lifetime value is one of the key ways to increase profitability. Brands can accomplish this by relentlessly exceeding expectations.
By adopting a DTC model, brands can have a constant finger on the pulse of their customers. This continual contact ensures customer satisfaction at every stage, which can improve the likelihood of making first-time shoppers lifetime customers.
In today’s world, there’s practically no limit on how to structure or operate a business. Online retailers that successfully implement DTC strategies can see a huge payoff on their efforts.
