Our last blog took a retrospective look at the growth in eCommerce
during 2020 and identified changing consumer behaviour in increasing propensity
for online shopping as an alternative or in addition to traditional shopping.
In this week’s blog, we take a look at the considerations before launching a
direct-to-consumer (D2C) brand proposition and ask is D2C the right strategy
for every brand?
What are the benefits of your
brand having a D2C strategy?
Key questions to consider:
the average frequency and volume of purchase?
This will determine how often a customer would order and what
a typical order may look like. Is it a product that customers frequently
purchase regularly at a brick and mortar
store, that could also be easily posted directly to your loyal customer?
For example, customers purchasing essential care products
such as incontinence pants will have an ongoing need, not just place an order
for a special occasion. This particular example is ideal for a subscription
ordering / fulfilment model as discreet packaging allows the order to be
shipped directly to the customer, avoiding any possible embarrassment in bricks
& mortar retail.
Taking this a further step, bundle offers can be created to
incentivise higher volumes over fewer deliveries, minimising repeated handling
and despatch costs and free delivery can be offered for orders over a minimum
value – thereby encouraging customers to spend more. For example;
Offer A – 60 incontinence pads delivered each month for £60
plus P&P of £2.99
Offer B – 180 incontinence pads delivered each quarter for
£144 (saving 20%) with free P&P
Disposable razors are the perfect example of a product that
needs to be replaced regularly. The Dollar Shave Club1 identified a
gap in the market for a low cost, a disposable razor to be ordered via
subscription – with the added benefit that the products are lightweight and
relatively small, allowing them to benefit from low-cost despatch options.
your product range:
As a general rule, if your product(s) are lightweight, small,
non-fragile, and can be easily packaged up for distribution, it is certainly
time to consider implementing a D2C strategy.
Yet, even if your product doesn’t fit all the above there are
many exceptions which can flourish with this strategy. Such as brands which
manufacture low value and large or bulky products may be put off with the
additional despatch costs in proportion to the product value. Although if this
item is bought on a regularly basis is may be suited to be bought in bulk.
For example, products such as toilet paper, that are overly
bulky yet purchased on a regular basis – are greatly suited to bulk
subscription offers. By doing this, a brand can optimise the quantity per
‘bundle’ to benefit from maximum weight and dimensions with their chosen
despatch provider and also keeping a customer’s loyalty to their brand.
questions to think about:
Optimising the quantity of items per outer carton in terms of
customer offer allows you to minimise your handling and packaging costs –
typically outer cartons are required to be robust, meaning minimal extra
packaging is needed to allow the items to be despatched via a carrier. The
exceptions to this rule are products that contain liquids or items classed as
‘hazardous’ by carriers, that require outer mailable polybags to ensure no
spillage can occur during the delivery cycle.
Do your customers regularly purchase your brand in store
because they have no options to purchase online? Take an overview look at your
market share and your competitors, have any tried to sell online? Also why not
take it a step further and take a quick look globally to see how your
compeitiors in other countries are doing? Although they may not currently be
targeting your customers the world is getting smaller with companies branching
out and extending their reach across the pond and they might surprise you with
their latest innovations.
the right time to implement a direct to consumer strategy?
With it being forecasted
that online sales are predicted to continue to grow world-wide2 it’s not too late to incorporate a D2C
consumer strategy. Not only can it create further customer loyalty, it can
assist in boosting your target reach and profits.
If you would like
support or advice on how to implement a direct to consumer strategy don’t
hesitate to get in touch with Mel at Melanie.Sheldon@mrm.co.uk or
call 01858 414 777.