Understanding the D2C (direct to consumer) sales channel has always been a big part of building a successful digital strategy, once upon a time it was an option alongside other models (B2C, B2B, and P2P) for most brands and retailers but it is now becoming a matter of doing it to strengthen your business and its long-term continued success, but its worth making note that it’s going to be disruptive.
Retail is changing and it’s changing faster than you can imagine
The last 20 years have been very disruptive, we have seen the mobile life happen, the internet scale and-e-commerce become a norm, same day and same hour shopping and delivery have meant that the traditional way we shop for products, services and brands via retail is changing and it’s changing faster than you can imagine.
If for the last 20 years your inbox had emails in to read and then 1 day there were none, never going to happen right?
If you’re thinking your brand or retail business is going to come under some kind of disruption in the future then the chances are someone somewhere has a little startup VC funded building and there already on their way to your key customers. You need to shake things up and do it fast, waiting is going to simply be that waiting for the inevitable to arrive. Just think of it like this, if for the last 20 years your inbox had emails in to read and then 1 day there were none, well just imagine how that would feel odd right? Like whos been in my inbox? Well, that’s what it’s going to feel when someone new comes and take all your customers, “its never going to happen”?
But how do you evolve a D2C business channel when it has never been part of the business strategy, like who wants a disruptive day in the office (well we do!). The day to day jobs and processes just don’t show any signs of wanting to be changed – why? Because nothing is going wrong, right? Well, that’s where the right way has become the wrong way.
When a team has been so good at doing the same thing for years even decades and then they are asked to change what they are doing because “we’re building a new future”, it is going to be full of risk and doubt and why? This is an exciting challenge but one that goes against all the normal rules of a mature business. Well with that in mind its time to identify and support the entrepreneurs in the business, it’s their time to shine.
Here’s how we view the first few steps to getting the balance shifted from not doing anything to mixing it up in your own business and disrupting things at your pace.
Step 1 – Data and insights
No need to do any guesswork, If and If being the question, if you have data gathering tools in place you will need to take some advance thinking on what your future KPI’s should be assuming that they may well be different to the existing ones and look at how those would perform alongside what you can see in the data happening. This is not an easy job, understanding what will be happening in the future and linking it to what is happening today is part art and part science. You will need to engage your greatest entrepreneurial minds.
Step 2 – Market research
Take a look at your competitors and also take a look at other business models and industries that may have buyers with similar customer personas. You need to see where your customers are spending TIME as opposed to money, at the moment D2C is an option and one that most customers are not aware of, so you will need to gain an understanding of where the social currency is being best developed that you can leverage. Make good use of consultancies like Boxclever.
Step 3 – Senior Level commitment and agreement
When building D2C you may find that it is such disruptive thinking that It can not exist in the day to day operations of your business. No biggy that you have this in mind but the important task is to get the senior members of your business to see this. Once you have an agreement that it simply needs to happen now how you do it might simply mean you take the idea outside the business and build it from there, and once it has traction look at ways of building the existing business around it.
Step 4 – Plan and execute a number of small experiments
It has been famously been said by the founders at Airbnb that they built ideas that “couldn’t” be scaled. What these ideas give you is fast traction. Once you have done a few experiments around the idea of the D2C channel and you know how the customer might respond you can too. So build traction and scale to whatever level in order to get MPV and then build and invest in the direction of least friction.
Step 5 – Data and insights
Ha, so that’s it hey, nop, it’s at this point that you need to have another look at the data, once again compare what you planned to see happen against what did, and work out if you think the right thing is happening.
So, 5 steps, that’s it, well no that’s just the start. At this point, you are only just getting the idea of how fast and what resources it will take to not only build a D2C business, but you may well be gathering insight into what many operational challenges lie ahead, what politics you will have to deal with and how you scale up.