Key challenges of D2C activities

Written by Sven Van Hoorebeeck


The interface of the future is proactive, requires zero effort, is invisible, and especially personalized. In many cases, this personalization results in a filter on everything. Think about the Amazons in this world that suggest certain products or the Facebooks that show ‘personalized’ advertisements. It becomes more difficult for brands to reach their customers, as they are often filtered out from the platform. Therefore D2C offers a good alternative: Customers interact directly with the brand or company, and no external platform is needed.


D2C brings many opportunities for both customers and manufacturers, however, the challenges also need to be considered. There are four key challenges related to D2C for manufacturers:

1. Providing a unique value proposition


A direct-to-consumer channel must benefit the consumer that classic B2C and B2B channels do not offer. A D2C channel can deliver unique value in several ways:

  • Lowering prices, reflecting the decrease of intermediary costs

  • Easing the purchasing process by eliminating repetitive purchasing actions or taking out a specific burden of the process, such as transporting a mattress from the shop back home. Casper[1] and Emma[2] are two examples of D2C mattress sellers that fully focus on this value proposition.

  • Differentiating the offer or providing other benefits for the consumer such as personalization and customization

  • Increasing the brand experience through direct touchpoints with the consumer

Overall, a unique value will incentivize customers to change their purchasing habits. Too many companies have failed in D2C because they provided similar offers as in B2C.

2. Understanding the differences between B2B or B2C customers and D2C customers

A D2C channel has different implications than B2B and B2C. D2C customers expect a higher customer service, product/ service novelty, and a stronger brand connection than in retail.

  • It implies leveraging new capabilities for B2B manufacturers: Marketing capabilities to reach the direct end consumer

  • Customer support for a quality customer service

  • Community management for a wholesome brand experience

Manufacturers that fail to develop closer customer relationships will not succeed in D2C.


3. Adapting your business activities


A direct-to-consumer channel impacts all activities in a company: Finance, Production, Marketing, Logistics. Assessing how this new activity will impact your processes and adapting it on the way is essential. A few key challenges related to this:


  • Finance and Accounting: A payment process that allows customers to pay you directly through different payment means (credit card, online payment platforms, and soon perhaps digital currencies).

  • Production: A process that considers the packaging differences of D2C expectations, such as single unit boxes or welcome letters.

  • Marketing: A customer service process that connects the customer directly to the operators, by phone, mail, website, or other means.

  • Logistics: A logistics process that considers the extra flows of D2C services, such as return flows.

Failing to consider the changes D2C imply, harms the implementation and, in turn, your brand’s reputation to deliver promised services.


4. Offering a scalable and cost-effective solution


A fourth challenge is to keep a balance between, on the one hand, a generic solution to be cost-effective while scaling, while on the other hand offering a customer tailored-made solution to offer a product or service that fits a maximum of markets.


Here are some challenges to consider when creating a scalable D2C offer:



Conclusion

Direct-to-consumer channel implies challenges for any manufacturers. No challenge is unconquerable if they are considered early in the implementation phase, and solid D2C foundations are established. The players who tackle those challenges and successfully implement a D2C channel can ripple great benefits.


Ready to tackle the challenges? Reach out so we can support you in this!



[1] https://casper.com/ [2] https://www.emma-sleep.com/