4 Levers to Scale Your Direct-to-Consumer (D2C) Channel

February 6, 2023

Direct-to-Consumer (D2C) is fast becoming a popular channel for manufacturers and Consumer Packaged Goods (CPG) brands to skip the middle-man or the intermediary service and compete directly with the Digitally Native Brands. The major benefit of D2C is to give full control to the brand of its brand reputation, marketing, pricing and engage directly with customers. It has also provided resilience, if not further growth to D2C businesses during the COVID-19 pandemic.

While the barriers to entry are relatively low, you will compete against many other D2C but especially major marketplaces in EMEA such as Amazon, e-Bay, Bol, Allegro, Cdiscount, Noon, Jumia or Hepsiburada, who have already established a massive customer base and top-of-mind awareness.

This is why it is crucial for you to have a strategy in place that will help you scale your D2C channel and fuel your own flywheel. We have summarised below the key areas you should focus on to offer the best customer experience (CX) at / after launch.

Important: We will publish in the coming weeks articles addressing in detail the growth levers below (we will cover the respective KPIs to monitor, IT tools to leverage, SOPs to put in place, etc.).

1. Products Catalogue & Pricing

- Selection count: Launch with a minimum number of products and categories you believe are critical to drive conversion. We usually recommend starting with your top selling products. Do not forget to update your stock everyday and remove products that you no longer sell.

- Content quality: Product attributes are important to manage your customers’ expectations prior to delivery and drop the share of your returns. It is also very important for your data analytics (e.g. forecast at child SKU level) and filtering (e.g. run promotions on a specific set of products). The most important attributes are: SKU number, title, picture, colour, size, pricing and description.

- Pricing: You should price match your direct competitors to ensure a good CX while protecting your margins. We recommend you to integrate your e-commerce platform or CMS with a price scraping tool (example : Shopify Scraper) and add your automated pricing rules (e.g. setting a floor).

2. Convenience

- Payments: Make sure you offer the most commonly used payment methods in your target countries (e.g. Credit Cards, Debit Cards, Banks transfer, BLIK, Pay-By-Invoice, Cash on Delivery, etc. ). If you are using Shopify, you have 2 options : Shopify Payments or 3rd party payments.

- Customer Returns: Offer frictionless returns’ process. Integrate your e-commerce platform to your returns processing tool and dashboard. Ideally, you’d allow your customers to enter their return request directly on your site and automatically send an alert to your 3PL, following your approval. If you use Shopify, we recommend you to use the Aftership Returns Center. Do not forget to link every return step to your CRM and keep your customer updated till refund. Also, your Return Policy should be updated and covered in your FAQs’ page.

3. Branding and Marketing

- Awareness: You should work on your brand reputation and awareness. You must have an exhaustive branding guide reflecting your story, this will help you produce your marketing visuals and onsite banners much faster. You have many choices on how (format) and where (channel) to run your awareness campaigns, such as: Instagram story, Facebook bumper, In-stream video, Facebook/Instagram Post, Google Display Network, Google skippable in-stream, etc. The objective of your campaigns should be traffic/visits as opposed to conversions/purchases.

- Performance: You should obviously run several performance campaigns to drive purchases such as Facebook/Instagram carousels, stories or Search Engine Marketing (SEM) campaigns. This is a very tricky one and requires a lot of experience and optimization. Facebook/Instagram has also lately limited the performance of its ads as the size of your saved audiences may decrease because it does not include people who have opted out of tracking on iOS 14 and above (more details here). Reach out to us to tell you how to overcome this limitation and optimise your ad targeting.

4. Delivery Experience

Your delivery promise should be very competitive (matching your competitors) and clearly displayed onsite. This will significantly drive your conversion rate (also depends on your type of products, whether your customers can wait 1 week to get it or no more than 2 days). Setting a competitive promise is definitely easy, however you must ensure that your deliveries are within your promise, otherwise you will lose your customers and might pay higher delivery costs because of failed delivery returns. You should add the delivery promise misses as a key metric in your delivery performance dashboard.

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