Are you thinking of dipping your toes into the direct waters of the consumer?
You are not alone.
Traders selling everything from razors to pet food, from mattresses to meal kits, saw the writing on the shop wall.
In fact, according to IAB's popular new study, The Rise of the 21st Century Brand Economy, the future of retail growth comes from relationships with direct consumers.
The challenge is that large companies do not know what to do.
If your brand wants to win the game to the consumer, you can not simply fill orders efficiently, you have to meet the modern expectations of the customers who place those orders.
Today we will explore five essential elements that your brand must know to go directly to the consumer.
- Because the brands are going directly to the consumer.
- What customers expectations are changing.
- How to design and optimize your website and its marketing.
- How to integrate other business operations accordingly.
- What to measure for success.
The water is cold and the waves are rough.
But we are here to help you navigate your journey along the journey to the consumer.
What does it mean to go direct to the consumer?
Directly to the consumer means that you are selling your product directly to your end customers without third-party retailers, wholesalers or other intermediaries.
Because the brands are going to direct towards the consumer
The writing is on the wall.
The e-commerce has changed and continues to change.
The multi-channel retailer model is failing, and it's falling apart because the margins are small.
Pedestrian traffic has continued to decline in the traditional sense.
Customers buy more and more things online and buy less goods from traditional physical retailers.
This trend harms previous brands whose main channel of product sales has been through stores such as Bloomingdales and Macy's, stores that have had difficulty and even closed many positions in recent times.
It reduces the overall activity, both for the brand and for the wholesaler.
The scary part for legacy brands is that they now have to compete with all these hip-up brands that are digitally native.
You've seen advertisements and read articles about treasures like Harry, Casper, Blue Apron, Bonobos, Barkbox and Warby Parker.
Customers expect and demand to buy directly from a brand, regardless of what they sell.
Your next step: answer these questions for your brand
- Which digital native brands are destroying your legacy business?
- What could you learn from them?
This is the attraction for legacy brands that go directly to consumers: regain control over how their brand markets and transmits their products.
Especially if their products have a unique sales proposal.
They do not want to rely solely on stores to put products in the right places for the right people, or for local sales representatives to be educated about it.
The other positive side is that brands that pass directly to the consumer become owners of their most important activities: their customers.
Currently, someone could be a customer of Macy's, but not a customer of your brand.
Which means that your brand is not able to communicate with those people, send them via e-mail with relevant updates or own that relationship.
Ultimately, the lack of control is a huge loss for any organization.
Owning the relationship with the client is what allows you to have much more leverage to increase the value of the customer's life.
Your next step: answer these questions for your brand
- To what extent are you the owner of your customer relationship?
- Does it give you the leverage to increase the customer's lifetime value?
What customer expectations are changing?
Discount Electronics, a twenty-year veteran in the industry, intentionally wanted to evolve its business to meet the changing needs of its customers.
By upgrading their e-commerce platform to an on-demand computer configuration, on the same day, they started offering same-day shipping.
Not to mention, they made their web experience friendly, secured PCI compliance and integrated with Amazon Pay and ultimately deepened their direct relationships with consumers.
As a result, they have increased revenue by 150% and the average order value by 58%!
Lesson learned: if you have historically been a wholesale brand, you have to think long about why a customer will change their behavior and buy something directly from your e-commerce site.
And the price?
Perhaps, but the price is a very dangerous game, as you could upset your historical activity if you start to fix cheaper prices.
Yes, you must at least be aware of the price, because if someone searches for your product and the first thing that appears on your website is that Bloomingdale is selling that product for twenty percent less, it will be really difficult to convert.
Here's the big question: what attracts customers to buy from websites compared to traditional retailers?
For beginners, customers connect to multiple products, while some retailers do not always have all items in stock.
Subsequently, directed to the consumer takes advantage of impulse purchases.
Stores can take advantage of this better online because now a buyer has the ability to connect with the brand whenever he wishes, in the day, on his terms.
And brands can proactively connect with them via e-mail, push notifications, and so on.
It also thinks of the direct consumer in terms of opportunity costs.
From a financial point of view, now the store can hold fewer stocks. You can cut costs and keep the same margin.
And from the point of view of time, directed to the consumer, he saves the customer from the hassle of physically going to a brick and mortar place.
Common motivators for purchasing customers:
- Exceptional service
- Involve marketing campaigns.
- Exclusive SKUs.
- Copy guided by narrative. Single or useful packaging.
- Email marketing with offers and promotions.
- Liberal return policy to compensate for the inability to see products at the point of sale.
How to design and optimize your store and its marketing
Your company needs to launch an online store that is convenient but still meets consumer needs.
Here are several strategies to do it.
The first key to being right is to shape your site in a way that makes searching, searching and buying a product easy and fast.
Make their site visit memorable enough to encourage repeated visits. But do not do it at the expense of usability.
You have to put a customer in a situation where they are used to the experience.
They are getting the information they need to get, and it is happening in such a way as to be satisfied enough to make this purchase online.
The experience must fill the small mental void of not having the product in the hands of the customer where they can touch, feel and test your product.
Whenever you are becoming too experimental on that front, you are moving far, far away from that journey.
Andie Swim it is an excellent example of correspondence between site design and expectations.
This brand of women's swimwear has made waves in their first online season.
Not only by producing high quality products, but also by closing the "test before purchase" gap.
Thanks to the integration of the partner with Rebilla, customers can now carry out a 3-4-week suspension on credit cards while they look for a swimsuit and send it back.
Less friction led to 1000 orders in the first three months and a 200% increase in the conversion rate.
Another lesson learned: Make sure that each of the products on your site has a gallery of at least four or more images.
Remember, e-commerce is a puzzle.
The gap you are trying to overcome is the fact that the product is not in their hands like the traditional buying experience.
Ultimately, all you're doing is filling that gap so the product looks like it's here.
Users could be sold visually and informatively before arriving at the product page, but you must bring the sale home with captivating and complete images.
Do not waste precious real estate on your website with too many images of brands, taglines and other business assets.
Make the purchase images the heroes of the page.
How to integrate other business activities accordingly
Of course, going directly to the consumer will affect more operational problems of your business.
Here are several elements to think about.
On the one hand
In the past, previous sales brands would not really need to have a great technical team.
They would have done a quick web dev, but these days they will need a lot more customer support for the customer.
And it will expand beyond what they had previously. Also, now you have to manage shipping and logistics.
It is one thing to send large orders to your suppliers' warehouses.
Another thing is to set up an efficient system to go directly to consumers.
For this, you can become a partner or you can create the separate network yourself.
On the side of performing marketing
Brands now have to move the bases on how they think about channel roles.
For example, what is the customer acquisition strategy? What is your customer life value model? And how would you answer these questions if you do not have enough historical data on customers as a base?
Answers to these new questions could mean relying on others to establish the baselines for forecasting and planning budgets accordingly.
On one side of the brand
Legacy retailers need to think more critically about the way they tell stories about their products.
They should create and contribute to the narration of their brand every two weeks.
The ideal place to start this story is by looking at what your differentiator is.
To identify it, here is a question that we challenge our retail customers to ask:
Who is the kind of person who, if they had this product, and you took him away from them, would you feel a kind of pain?
You have to put yourself in the shoes of someone whose life would be improved by your product.
Whether it's a new product line, a big sale or some other type of promotion, direct consumer brands should be constantly being launched so that there is always something new to talk about.
On one side of the service
You have to think about customer loyalty.
Wholesalers who go directly to the consumer used to rely on retailers to promote loyalty.
But now they have to do it alone.
Therefore, design and expand your email marketing program with loyalty in mind.
A good part of your email marketing program should be on creating more loyal customers from people who are currently on your lists and increase the value of those people.
This means triggering triggers on all types of automated email streams designed to convince people to buy, buy again, share the brand and coordinate with other channels.
What to measure for direct success to the consumer
Last but not least, our favorite topic: leveling your measurement game.
In recent years, corporate and legacy retailers have made decisions based on the quantification of the wrong metrics.
For example, many companies do not monitor offline online for Facebook ads.
This is a huge missed opportunity to clarify the attribution.
But the problem is that marketing executives have been sold on the value of soft KPIs such as brand lift and how many people use hashtags, but not revenue.
Those metrics certainly have their place and should not be ignored, but it is not where you should concentrate your time if you really want to make a direct and direct game to the consumer.
That's why many legacy retailers are cleaning their watches directly from consumer companies.
Those scrappy startups must be lean or lose. The stakes are higher for them and there is less room for error.
In fact, depending on the size of the legacy enterprise, there should be a real cultural shift around the data strategy.
Now, even if your company does not have that level of resources, the basic philosophy and practice around measurement is still valid.
Do not have old legacy KPIs that drive your brand to the consumer.
It's simply a different set of skills and different things you should measure.
The truth is that most legacy brands are used to looking at metrics such as impressions, reach and frequency.
These are noisy numbers, and they easily carry marketing executives in their direction.
But measuring commitment does not necessarily always translate into dollars and cents.
Brands must get used to the fact that the KPI e-commerce indicators they should focus on include:
Then, build your funnel around these metrics.
It's a whole new kind of mentality that some companies may not have a hug story.
Ok, one last problem concerning the measurement.
As a performance marketing agency, we have found that it is easier to track the effectiveness of marketing and treat it as a profit center.
Our customers know exactly what percentage of their spending goes to which channel and how effective each of these channels is.
Considering that, if a customer bought something through a wholesaler, there would be no way of knowing why or how.
Did they click on a Facebook ad? Have they been sent back via Google Search? What kind of conversion rate did we get?
There is no way to say it.
And remember, if you can not measure it, you can not optimize it.
Thank god! I told you that the ocean to the consumer was cold.
But you are not alone, and it is not too late.
There has never been a better time to evolve your relationship with customers into a more direct one.
If you focus on finding the right suppliers, technologies, and partners to help you implement these marketing strategies and tactics, your retail ship will sail to profitable waters.