Business-to-business and business-to-consumer used to be clearly different business models. The manufacturer sold to retailers in bulk (B2B), and the retailers added a markup and sold to consumers in smaller quantities (B2C). The rise of the direct-to-consumer trend is disrupting the traditional views on commerce.
The ability to sell online, directly-to-consumers via e-commerce stores or marketplaces like Amazon or Etsy is appealing to manufacturers. It enables them to bypass retailers, offer their products at lower costs, and have direct access to customers’ feedback. On top of that, it gives them complete control over the entire process from production to packaging and distribution. Personalization and customization, greater product variety, top-notch customer service, and data insights are a few more advantages of the D2C model.
Today, we see many manufacturers who adopt a multichannel sales strategy, being present in both traditional retail spaces and online via branded ecommerce sites and marketplaces.
In this article, we’ll discuss five key strategies for manufacturers looking to successfuly add D2C to their strategy.
- Align all stakeholders
Before making any strategic change, it’s important to discuss this with all stakeholders. Make sure you get the right people involved, listen to their concerns, plan resources together, set goals, and performance metrics. Having everyone aligned and objectives clearly defined will ensure the success of your D2C strategy implementation.
- Know your audience
This is a mandatory step in any sales strategy. Understand your customers’ needs and wishes, listen to their feedback, and adapt accordingly. Learn what motivates them to make a purchase and what devices they use. Find out what digital platforms or social channels they use and ensure a strong brand presence there.
- Make use of smart tech
Inventory management, material allocation, order prioritization, and optimized manufacturing processes are just a few of the challenges manufacturers face on a regular basis. When selling D2C these points gain even more importance. Smart manufacturing software is crucial in managing these areas effectively. It not only helps understand what materials are available or needed at specific times in the manufacturing process, but it also offers data necessary to make informed decisions, cut costs, reduce lead times, and mitigate waste.
- Offer personalization options
Nowadays, people expect to be able to customize products according to their specific needs. A study by Deloitte claims that 20% of customers are willing to pay a premium for personalization options, and almost half are willing to wait longer for their customized product to be delivered.
Offering personalization options is a great way for smaller manufacturers to get market share from the larger corporations and keep customers happy.
- Optimize shipping and delivery
Even though many are willing to wait longer for customized products, in general, customers expect quick shipping and delivery. Same day or next day delivery are expected and don’t even qualify as a competitive advantage anymore. Failure to offer fast delivery is a sure way to disgruntled customers, so it is key to provide clear communication about your shipment options.
Although obviously appealing, the D2C model doesn’t come without challenges. First of all, many manufacturing businesses weren’t yet knowledgeable and capable of fully investing in their own ecommerce stores. Companies like Shopify or WordPress make it easier to launch a website with limited resources. Secondly, having influence over marketing, production, and distribution comes with its own responsibilities. And even more, tracking inventory, raw materials, gathering data, all across multiple sales channels can quickly become a struggle in this scenario.
Being aware of the potential pitfalls and having a plan in place on how to overcome them is crucial. Make sure to have all stakeholders aligned and on board. Understand and research your audience to respond to their expectations. Use manufacturing software and other digital tools to make informed decisions. Give your clients the option to customize their products and make sure they receive them in a timely manner.
These five tips will help you stay on top of your D2C strategy and gain a strong competitive advantage.