Retail is at the crux of the most significant reinvention we’ve ever seen.
Mobile technology and social media are changing how consumers shop and influencing expectations across every aspect of their lives. In order to keep on top of these changes, retailers must evolve.
One of the most influential evolutions of late has been the increasingly popular direct-to-consumer (DTC) movement, which has seen digitally native brands such as Dollar Shave Club, Under Armour, Glossier and many more explode onto the scene.
What is the direct-to-consumer (DTC) movement?
For those of you who are new to hearing about DTC, it’s where wholesalers, manufacturers and brands are selling direct to consumers, as opposed to selling to them solely through retailers.
The single most important reason behind the wholesale shift to DTC is that savvy brands are now responding to the recent shifts in online consumer buying behavior, which indicate that shoppers are much more open to purchasing products directly from brand websites.
In fact, according to a recent survey, 59% of the respondents prefer to do research directly on brand sites and 55% want to buy from brands directly.
The pros and cons of DTC
Owning a rich brand experience from discovery to delivery is one of the most deeply ingrained benefits of this wholesale shift. DTC enables merchants to become more customer-centric, ultimately improving customer loyalty and customer lifetime value for their brand.
Other benefits include the opportunity to expand into new markets, improve profit margin, have complete ownership of the supply chain and gain a complete view of merchandising data such as fast and slow-moving inventory, lost opportunities and seasonal trends, ensuring businesses can be adaptable (especially in this rapidly changing retail climate).
But there is pushback to the process of integrating this type of business model.
Some brands are concerned about upsetting their retail partners, becoming B2C fulfillment ready or being able to compete with the same-next day delivery expectations being set by the likes of Amazon, while others have issues around investment, their technology capabilities or a lack of ‘know how’ around how to get started with the shift from a B2B to DTC model.
These concerns are understandable, but merchants can’t allow them to hold their business evolution back. Almost half (48%) of manufacturers are now racing to build DTC channels, while the number of brands selling direct to consumers is expected to grow by 71% this year alone.
The merchant / consumer disconnect
Despite a myriad of brands racing to launch their own DTC channels, we’ve found that there is a disconnect between how merchants and consumers feel the movement is going.
Unfortunately, many brands have simply set up an ecommerce site as a standalone channel. Often, in this case, not enough thought is being given to supporting the frictionless ecommerce experience that customers now expect, from an outstanding user experience, to same-next day delivery options, real-time shipping and delivery updates, or follow up recommendations and personalized offers.
Our latest survey of 4000 consumers and 200 brands has revealed that whilst the majority of brands believe they do offer a fast and frictionless buying experience for their customers, this isn’t supported by our research, with a surprising amount of shoppers telling us they’ve abandoned an online purchase in the last year due to avoidable issues.
The direct-to-consumer movement is all about making the complete buying experience fast and frictionless with efficiency and accuracy at the very core. This comes from having a seamless end-to-end experience, by taking into consideration your front and back office operations.
Join Brightpearl and Endless Gain’s Fast & Frictionless DTC Event!
Date: November 22nd 2018
Time: 8.30 – 11.30 am
Venue: The Covent Garden Hotel, 10 Monmouth St, London, WC2H 9HB
This breakfast seminar will explore the DTC disruption and how brands can implement a frictionless end-to-end shopping game plan.
This is your chance to hear from a whole host of DTC experts including the Head of Ecommerce at Hotter Shoes, as they share how they’ve built brands that are now providing fast and frictionless end-to-end buying experiences.
At the event, we’ll also be launching the first ever global consumer/retailer market and biometric research on the DTC disruption, as well as sharing best practice and strategies for a successful DTC model.
This is an event not to be missed! Find out how to up your DTC game, maximize conversions and drive customer loyalty.
Justine Cross is the Content Marketing Executive at Brightpearl – a cloud-based back office solution for retailers and wholesalers. Brightpearl enables you to provide a fast and frictionless experience for your customers by unifying all your sales channels, inventory, accounting, CRM, suppliers, fulfillment, warehouse management, reporting and POS in a single automated system.