Until the rise of e-commerce, the shopping experience relied solely on retailers and distributors. However, more manufacturers are turning to a more direct customer journey. Direct-to-consumer (D2C) selling allows manufacturers to forego distributors and gain several benefits, like a deeper relationship with consumers.
Direct-to-consumer selling can seem daunting for manufacturers that depend on retailers to get their products to market. Manufacturers across industries can successfully adopt direct-to-consumer channels or transition away from a wholesale model, as long as they have an efficient D2C strategy and a thorough understanding of their customer base.
What Is Direct-to-Consumer Selling?
Direct-to-consumer selling is when manufacturers sell their products to end users rather than distributors. This approach departs from the traditional wholesale strategy, which involves manufacturers selling products in bulk to retailers at a lower price. Selling through distributors requires manufacturers to coordinate putting the right amount of product in the right place.
In direct-to-consumer sales, manufacturers or producers sell directly to customers, connecting companies with their biggest supporters and cutting out the go-betweens. Any manufacturer in any industry can utilize direct-to-consumer selling through various channels, including:
- E-commerce websites
- Direct sales over the phone or in a physical location
Selling directly to consumers is only possible because of increased direct-to-consumer channels, most notably e-commerce. E-commerce allows customers to select a retailer they want to purchase a product from and go directly to the manufacturer. Today’s customers are more willing to buy online than ever before. As a result, direct-to-consumer sales are growing in popularity in the United States, with sales projected to top $174 billion in 2023.
Manufacturers have plenty of opportunities to leverage a D2C strategy, which may revolutionize their sales. Businesses using D2C channels can control the entire selling process, from production to inventory management, order fulfillment and shipping. Direct-to-consumer selling signals increased responsibilities for manufacturers, yet the rewards can be high. Selling directly to customers allows companies to develop greater brand loyalty and better control their profitability.
The Benefits of Selling Directly to Consumers
Businesses can experience real advantages by putting their products directly in front of customers online. Consider some of the benefits of direct-to-consumer sales:
Closer Relationship With Customers
With direct-to-consumer selling, manufacturers can create relationships with their customers instead of interacting strictly through retailers. Many companies utilizing D2C channels leverage social media marketing to build a community around their brand, deepening the connection with their customers. Social media gets brands directly in front of potential customers and provides an opportunity for user-generated content and word of mouth. Manufacturers can use these benefits to build a better experience for customers.
Because D2C selling removes retailers, brands have more control over how consumers perceive them. With a D2C strategy, companies have a more significant influence on their branding and interactions with customers. For example, manufacturers can create branded websites and email newsletters and use other forms of online marketing like social media content to create a brand personality that resonates with their target audience.
Improved Customer Experience
Manufacturers can control the customer experience and take command of their branding strategy. One way e-commerce businesses can improve the D2C experience is by leveraging data analytics. Collecting customer data allows businesses to deepen the feedback loop and get in touch with customer insights. Manufacturers can gather information such as:
- Customer emails
- How customers interact with their website
- How often customers view the website
- Customer demographics
- Customer reviews
Faster Product Launches
A company using a D2C strategy can also test and launch new products faster and with greater insight into its target market. There’s no need to wait for retailers, distributors or other supply chain members. Manufacturers can test products, gather customer feedback and quickly develop new versions. Then the company can launch the product directly through its e-commerce channels.
7 Direct-to-Consumer Sales Strategies
Selling directly to consumers comes with considerations, such as the increased need to handle every aspect of business operations as a manufacturer. Companies opening D2C channels must be agile and adapt to new opportunities. Here are seven strategies for successfully navigating direct-to-consumer sales:
1. Create an Effective Website
A branded website is essential for creating a D2C digital shopping experience. Manufacturers should craft unique websites that resonate with their target market to stand out. Whether you’re selling personal care products or organic dog food, create an immersive experience on your website that immerses visitors in your site. Include content like a blog filled with informative articles, frequently asked questions and how-tos. Make customers feel like your website is a one-stop shop and that you give them a more rewarding experience.
2. Open Retail Stores
Even though D2C largely depends on e-commerce, you can still give your customers an in-person shopping experience. Opening retail locations creates an omnichannel approach to D2C sales that can increase your profits and give customers a complete experience with your brand.
3. Make Returns Easy
One of the pressures of direct-to-consumer sales is making digital shopping as seamless as possible. Although your customers can’t see or touch your products, you need to communicate their value. Some customers may not feel confident buying certain items such as apparel or home furnishings without the assurance of a hassle-free return policy. Offering easy returns assures people that they can take a risk on your product and return it if it doesn’t meet their expectations.
Collaboration is critical in D2C sales. Selling directly to consumers doesn’t mean businesses have to go completely alone. For example, a partnership many D2C companies have found highly profitable is with influencers. If a company’s audience is nonexistent or growing, partnering with influencers who align with its brand values expands its market reach.
Manufacturers can also collaborate with retailers while opening D2C channels. Fortunately, many companies have learned to navigate the challenges of this approach and still support their retail partners. Here are a few tips for avoiding conflict with other channels:
- Increase marketing investment, which can drive sales across every channel
- Tie retail channels into your D2C website
- Test new products through D2C channels and offer them to retailers so you can both profit
5. Invest in Creative Marketing
A powerful marketing strategy is vital for going direct-to-consumer. Telling your brand’s story creatively and clearly helps potential customers get to know what you’re all about. Manufacturers looking to go D2C should use several marketing platforms, including social media and email, to stay connected with customers. But your marketing strategy should be more about picking the channels that fit your brand, not creating a presence on every platform. Research to determine which marketing channels make sense for your business.
6. Encourage Reviews
People want to see that your product worked for others, and customer reviews are an excellent way to show them. Encourage reviews on your website and have customers submit photos of their purchase and describe why it did or didn’t work for them. This kind of content on your D2C website helps customers decide whether your products are for them. Make an effort to respond to reviews, too, as that shows your company is engaging with its customers.
7. Create a Brand Community
Creating community around a brand takes time, but it’s worth the effort. If you can design a brand identity that loyal customers resonate with and build a community around it, you’re well on your way to lasting success.
Master E-Commerce With Finale Inventory’s Inventory Management Software
Selling directly to consumers can give your business advantages like greater control over the sale process and a deeper relationship with customers. Arming yourself with strategies for success helps your company tackle the challenges of going D2C.
As you take your business D2C, an inventory management system can be a powerful tool for organizing your operation. Finale Inventory is a highly adaptable inventory management system for growing e-commerce businesses. Designed to scale with your business, Finale Inventory enables multichannel sales and centralizes all your sale information in one place, making it easier to streamline your processes. Finale Inventory helps you keep track of your inventory stock, whether you sell through your website or other online marketplaces.
Schedule a demo today and see how our platform can help your business.