How shopping will change in the ‘new normal’ and
the impact on exporters Part 2
Direct to Consumer E-Commerce is all about Taking Back Control
There is an increasing focus on how manufacturers can develop a sustainable and profitable business using Direct To Customer (DTC) e-commerce.
They use DTC to build a better understanding of their end-user. They also benefit from
- Control over the end-to-end experience from product design, data gathering, brand marketing and the post-purchase service
- Potential to reach larger audiences and expand their market share
- Advantage of not having their products on sale alongside their competitors’
- A platform to provide up-to-date and accurate information to consumers
- An opportunity to offer customers an option to buy authentic products directly from the brand
As a minimum, opening a DTC channel will increase your brand presence and support the message even with the channels promoting your product/services will benefit
The DTC activities have been very much driven by taking Back Control and following the consumers’ activities on the e-commerce platform.
In a 2019 E-Commerce survey, we saw a rising trend for consumers spending directly with manufacturers, “59% of respondents prefer to do research directly on brand sites” and “55% want to buy from brands directly.” It’s clear that as brands and manufacturers become more comfortable with selling direct, this trend will only grow.
Likewise, more and more consumers appreciate and expect to buy direct means a better brand experience.
According to a CEI survey, 86% of buyers will pay more for a better customer service experience. They also have the perception that buying from a brand directly will mean returns or faults will be dealt with more efficiently. This underlines the importance of creating an open, direct and transparent line of communication with your customer.
In fact, according to Forbes, over a third of consumers report that they bought directly from a brand manufacturer’s website last year.
The number of manufacturers selling direct to consumer is expected to grow by 71% this year to more than 40% of all manufacturers.
The benefit of a DTC platform has been led by consumers wanting:
- Offering authentic brand experiences and able to act directly
- Control of communication to all channels
- Control stock and service levels
- Effort and resource to “lock-out” competitors
- “Lock-in” consumers with consistent service and learning directly
It is a tall order to kickstart and enable growth after the lockdown as many of the dimensions of business have changed. Furthermore, the big retailers have over this period also implemented many unprecedented planogram changes, all started by the challenges within the supply chains. We have seen cases where manufacturers have lost some of the product listings where a competitor got the opportunity or we have also seen complete category replacements with own label.
Many smaller retailers have had to “close shop” and, therefore, many of the larger e-commerce operators such as Amazon with the right infrastructure in place across the world have had a clear advantage as they could deliver fast to both new and existing customers.
A fast start to serving customer online before the key elements of technology, delivery set-up and people were in place have been to seek 3-party partners such as established e-commerce providers, such as Ocado, Uber or Deliveroo.
The landscape has changed at all levels and the speed of sustainable action will be the winner, yet it has to fit and work with the core of the business and the culture.
To keep the customer close and close to the markets the use of their strategic membership platform remained in place and under the full control of Harry’s brand.
During the lockdown, the main brand focus returned to its core and root of serving the customer on their e-commerce platform and supported by the customer membership activities.
Similar actions have been taken by Hotel Chocolate where they have chosen to close some of their retail outlets and putting focus back on the iconic membership offering.
More background details on their membership concepts click here:
Of course, Primark has been a big loser by not being able to sell online so more than 3 months of sales have been lost. Again, Amazon has been quick to react on consumer trends and demand by buying up fashion stock from traditional retailers and replaced their yearly “Black Friday” slot with these items.
The list can go on and on not forgetting the hospitality sector where many restaurants and hotels have turned into takeaways.
The changed focus and outlook for many companies and organisations to stay close to their countries, markets, channels, and customers and put the customer in the centre for all activities
Align with the customers and consumers expectations to your product/services as consumer shopping behaviour is set to change after the crisis, with an increased level of online shopping expected:
Put the Customer at the Centre
- Focus on the customer needs
- Personalised marketing
Transform to digital-led sales and customer service
- Online commerce, direct from your web-shop or link up with other e-commerce platforms
- Support the traditional channels such as your agents, distributors or retail stores
Develop sharp and agile operations with full visibility and insight on orders and delivery schedules in all your sales channels and with direct customers
- Improve the communication, so everyone is informed and kept up-to-date based on a solid communication flow
- Build up the “Just-In-Case” supply concept as you did with Just-In-Time as it is simply no longer enough to get the customers and supply chain agile. You also need to be sure that you can deliver in these uncertain times
Data-driven sales and marketing focus
- Digital Marketing Personalised messaging through email, mobile, social, ads, apps
- Apps to drive transformation customer-facing apps and employee-facing apps
- Provide insights into orders management orders, returns with ease
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