Blog

Danielle Savin, Senior Director of Digital Marketing, Digital Customer Experience at Capgemini Americas

Kristina Burbich, Senior Manager Digital Strategy at Capgemini Americas

All eyes should be on the direct-to-consumer (D2C) e-commerce space. Brands can establish themselves through direct sales to customers

stronger relationships with those customers, gain more data to refine and develop new offerings, and add a revenue stream that complements existing B2C and/or B2B retail and marketplace channels.

As D2C appeals to customers with its emphasis on a direct connection, its growth continues upwards, reaching $129 billion in the US in 2021 and is projected to reach close to $175 billion by 2023. Consumer interest in D2C subscriptions also continues to rise, particularly among Millennials and Gen Z consumers.

As D2C companies gain traction with consumers, Forrester urges non-D2C marketers to examine how D2C brands are engaging with consumers. Here’s what we see.

B2C and B2B brands will continue to move into D2C

Throughout 2021, we’ve seen many companies start working on D2C initiatives, even in industries you might not expect, such as automotive. B. Packaging. There are three key lessons these companies must embrace to be successful in D2C:

• Know your goals. It’s important to set KPIs to know where you want to go in terms of sales, new customers, sales conversion, cart abandonment, and other key metrics.
• Treat your customers as unique. For example, a packaging company adding D2C can use its Customer Data Platform (CDP) to segment its customers by product type or order volume. This way they don’t market bulk orders of shipping boxes to customers who want small quantities of gift bags.
• Set a marketing budget. D2C may require your brand to operate in new marketing channels and speak to new customers. You need a team that can translate customer data into content that connects with your audience and helps you make progress towards your KPIs.

The D2C customer experience will continue to improve

D2C subscriptions score well in terms of functionality. However, brands could make some improvements in terms of personalizing the experience. For example, you can have customers say, “I don’t want this every month. I want it every other month or every six weeks.” They may want specific time slots for delivery or the ability to pause deliveries while they’re on vacation. Non-D2C brands can also offer these options.

D2C experiences will also continue to grow. For example, over the past year, companies like fitness equipment brands have had to make the switch from selling to gyms and fitness centers to reaching individual consumers with right-priced equipment and online classes. Now that we’re all used to doing more things at home, from cooking classes to yoga, these types of online offerings combined with at-home products remain an option for businesses looking to add another channel.

Social media marketing and marketplaces will help D2C brands grow

Social media marketing tailored to audiences and the voice of the brand will be critical in the year ahead. To run social effectively, brands need to understand where their prospects spend their time and what messages work best on those platforms. It also means that brands can and should focus their marketing efforts on these specific platforms, rather than generating content for each social platform. Brand social content needs to be authentic and based on data that reaches the audience at the right time with the right offer or message.

Marketplaces are another valuable channel for D2C brands as they capture search traffic. Even though marketplace orders have lower margins than D2C, these channels are essential to reach consumers and break new ground. Then you may be able to bring them to your website to do business with you directly as your customer relationship grows.

A strong technological foundation will still be important

D2C brands that are not yet using a Customer Data Platform (CDP) will need to adopt one in the coming year to be successful. It’s not enough to rely on an email marketing platform to get the relevant insights you need to connect with customers, understand their shopping habits, and effectively personalize their experiences. A CDP can provide all of these variables as it brings together data from your e-commerce platform, point-of-sale terminals, marketplaces, customer service, marketing and other sales channels for a clear, detailed customer profile.

With this information, brands can better understand the lifetime value of their customers, the cost of attracting and retaining them, what channels they are coming from and what products they are buying. By combining CDP data with AI and machine learning, brands can leverage real-time analytics to quickly switch to new channels when needed or desirable. Ultimately, the technology that successful D2C brands — and others — will adopt in 2022 will be tools that empower their ability to unify customer data and seamlessly personalize the end-to-end customer experience.

Planning remains the key to successful D2C deployments

Any company, even those that have already found success in the B2C space, must conduct careful planning and evaluation for a successful D2C adoption. That starts with assessing the technical stack to understand what it can do for D2C in its current state and where upgrades may be needed. Before companies invest in new technologies, they should calculate the expected total cost of ownership and ROI. Assessments usually don’t take as long as you might think. Organizations should allow between two and four weeks for an assessment.

Clarify your reasons for adding D2C and the goals for this expansion. For example, how quickly do you want to expand the D2C channel and in which markets do you want to start? Define what differentiates your D2C offering and customer experience from others.

Commit to creating marketing content that resonates with your audience and budget. Businesses need to ensure their branded content stands out and reaches their D2C customers at the right moment in their journey. Connect with seasoned experts who have helped other brands create and implement their D2C roadmap. Today, a company can launch a D2C channel in as little as 6 to 12 weeks.

D2C is now influencing marketing

Even if your company has no plans to enter the D2C space, it could compete with D2C brands in the coming year as more and more of them raise seed capital and enter new niches. Knowing what D2C marketers will be doing in 2022 can help any marketing team keep pace with innovation, strengthen customer relationships, and deepen loyalty.

Darling