Is your Business a Right Fit for Direct-to-Consumer Model?
Direct-to-consumer or D2C business has been in the limelight in the past few years as the model can serve the customer’s needs more efficiently. It is no secret that consumers prefer buying directly from brands rather than from the retail middleman and the increase in online shoppers has accelerated the process of businesses switching to the DTC model.
Direct to Consumer is a business where the companies manufacture the product and directly deliver it to the consumer without being dependent on wholesalers or retailers. Opting for a D2C business along with a delivery management system can help cut additional operational costs.
Today, almost all successful brands have shifted to the D2C model. Analysing whether your business is a right fit for the D2C business is important and can be introspective.
5 signs Whether your business is a right fit for the D2C model
Want to enhance profit margin- Direct-to-consumer business removes the involvement of third-party like wholesalers and retailers and facilitates direct sales. Removing them from the product flow allows manufacturers to save a bigger margin and contributes to significant growth in the market. Businesses can increase their profit margin by up to 30% to 40%. Opting for D2C can be beneficial for businesses that are looking forward to scaling their businesses by helping them save funds. The D2C business also allows the business to understand market trends and demands, giving them higher possibilities to expand.
Build brand loyalty- Customers feel safer while buying from the brand directly instead of buying from retail because of increasing cases of fake products available in the market. Also, D2C allow direct interaction between the brand and their consumers which builds a direct relationship. This increases transparency and adds value to the brand.
Get access to customers’ data- With the Direct to consumer model, businesses get direct control over the data and their orders. It gives businesses access to personalise experiences and allows them to understand their sentiments and expectations. Such analysis helps in improving the product and the service day-by-day.
Conduct digital-first marketing- Digital presence can help businesses to increase brand awareness, improves brand image and engagement and acquire new consumer by running a loyalty program. Digital marketing is the cheapest and doesn’t require much marketing effort. The D2C business allows businesses to market the product and acquire consumers online and interact with the customers directly increasing customer retention. SCORE’s research shows that 77% of small businesses utilize social media to enhance brand recognition, offer customer support, and boost sales.
Increase customer experience- D2C business helps in analysing and understanding customer sentiments and according to which businesses can offer personalised customer experience. The businesses can use sales promotions and offer certain discounts, flash sales or gift vouchers which help in increasing customer engagement and creating strong relationships with their consumers. At last, the model allows direct communication between the customers and the businesses. A better understanding of customers enhances their experience and increases customer retention rate while adding value to the brand.
Direct-to-customers allow businesses to directly manage the entire process from manufacturing to order fulfilment removing the need for an intermediary to sell their products in the market. Shifting to a B2C business model can be daunting without proper planning and resources. However, using appropriate delivery management system to operate and manage the business can streamline the operations and make it more productive, efficient and profitable.
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