As the world of ecommerce continues to go from strength to strength, it stands to reason that businesses from other sectors would look to capitalise on the success, moulding their own business models and strategies to take advantage of the opportunities on offer.
D2C ecommerce is one of the new models to gain real traction. It sees manufacturers selling their products directly to consumers from their own website, rather than following this more traditional method:
Manufacturer > wholesaler > distributor > retailers (online and in store) > consumer
D2C ecommerce basically cuts out the ‘middlemen,’ connecting manufacturers directly to the customers who want to buy their products. But to succeed, manufacturers need to completely change the way they operate. Where once they focussed on producing in bulk to stock shelves in retailer stores, they now need to look at producing and selling much smaller quantities or even singular items for consumer consumption. For some, it’s a step too far as it means completely re-thinking their production line. But to discount it without proper consideration risks missing out on a huge opportunity and could give competitors who embrace the change the upper hand. Here are just some of the benefits for manufacturers:
Benefits of D2C ecommerce
- Full control of how products are sold, including packaging, pricing, and marketing
- Smoother operations from reduced supply chain disruption
- An omnichannel experience creates greater opportunities for sales
- Insights into the customer base – who and where they are, and how they shop – provides the opportunity for more targeted strategies and product improvements to better meet customer needs
- Retailers will become your competition if you focus on D2C strategies alone. So, some manufacturers opt for an omnichannel experience so that whilst you are competing for the initial sale, you still make profit
- Smaller D2C companies who are just starting out need to consider the implications of order fulfilment from packing to shipping. Large retailers such as Amazon provide fast or next day delivery, this can be difficult to compete with without a proper process in place
- You may need to hire a D2C agency (or outsource) marketing and sales teams to provide your customers with a full and seamless customer experience
For more information on D2C ecommerce and the opportunities it can create for your business, contact SMP.