Trend Report: Brands Move Towards Direct-to-Consumer Model
“Direct to consumer interaction is growing, as evidenced by the research, and it is critical in today’s highly-competitive global economy that consumer goods companies take advantage of every touch point with the consumer.” – Oracle
The report by Oracle and Economist Intelligence Unit Survey states that 71% of manufacturers will sell directly to consumers (DTC) over the next year. Brands are becoming more aware of the importance of direct consumer connections but must also think of their strategic objectives, current capabilities and desired level of investment to maximize their sales in the new model.
Benefits of Adopting Direct-to-Consumer Model:
- Less dependence on shelf space as unprecedented competition among brands means inadequate brand representation
- More control over price structures through own channels
- Better one-to-one customer experience to build brand advocates
- Capture valuable data to better target what core customers actually want
- Test new products and consumer reactions via direct channels such as ecommerce
Things to Ask Before Launching an Online Store
It might seem easy to start your own ecommerce store but there are many questions you should ask yourself.
- Who will be handling the channel conflicts when/if they arise? (I.e. who is in charge?)
- Can your IT department handle the additional responsibilities of maintaining the ecommerce portion of the website? (On-premise or cloud-based, cost of upgrades, etc.)
- Will the online store experience be like your corporate site or be unique and localized?
- What pricing and promotions will you offer?
- How will you track the success of your website? (Tools to track click-throughs, abandoned carts, average order values, conversion, traffic specs)
- What is your marketing strategy to best preserve the customer and brand relationship?
- What capabilities do you want to offer to your customer’s online experience? (UI, UX, translation, recommendation of personalized capabilities)
- How will you handle order management?
- What commerce management solutions will be used to run product information management (PIM), uses management, pricing/promotions?
- What payment options will be offered to clients? (International credit cards, wire transfers, online banking, mobile options)
Read more: Roadmap to taking your brand online
Currently In the “Age of the Customer”
The term, “Age of Customer” is coined by Forrester Research to describe the modern day consumer who has abundant access to technology – social media, smartphones, Internet access. As their needs continue evolving, the retail landscape is also changing. There are fewer front ends, smaller stores and technology creates a new way to buy. Recent trend in Southeast Asia is seeing brands going direct-to-consumer and choosing aCommerce to provide the entire end-to-end experience.