Need for a direct consumer strategy (D2C) for brands and manufacturers

For many brands and manufacturers, the relationship with the market has historically been built through distributors, wholesalers and retailers. This model may remain essential, but leaves part of the consumer’s experience and knowledge out of the direct reach of the company.

A direct consumer-to-consumer strategy - Direct to Consumer or D2C - opens a channel of its own to present the brand, sell, care and learn. It is not just to publish an online store: it involves incorporating commercial, technological and operational capacities that could previously be in the hands of third parties.

The real challenge is to decide what role D2C should play within the business and how to make it live with existing channels.

What it really means to sell D2C

D2C is a model in which the brand or manufacturer establishes a direct commercial relationship with the final consumer. It can do so through its ecommerce, own shops, subscriptions, social commerce or other contact points managed by the organization.

The absence of an intermediary in a transaction is not what defines a solid strategy in itself. The decisive thing is that the company assumes responsibility over the whole course: discovery, information, purchase, payment, delivery, care, return and subsequent relationship.

Therefore, the D2C channel should be understood as a business system and not as an isolated web project.

Benefits of a D2C strategy for brands and manufacturers

Greater control of the brand and experience

The own channel allows you to decide how the catalogue is presented, what stories are told and what experience the customer receives. The brand can better explain the innovation, materials, origin, use or differences between products without fully depending on the space and rules of a third party.

This control extends to the service: prior information, order communications, packaging, support, returns and post-purchase actions.

Direct access to the consumer

The direct relationship brings questions, objections and behaviors that hardly appear in an added sales report. The conversations of the care team, internal searches, reviews and navigation behavior help to understand how the proposal interprets the market.

This knowledge can be used to improve not only ecommerce, but also the product, communication and distribution strategy.

Own data for decision-making

A well-instrumented D2C channel generates first-hand data on customer acquisition, navigation, conversion, recurrence and value. To be useful, they must be collected with consent, maintained with quality and connected with specific decisions.

It is not about gathering information. It is about answering relevant questions: which products work, what segments repeat, where conversion is lost, what campaigns attract profitable customers and what problems generate more contacts or returns.

The direct relationship makes visible what the client asks, needs and values throughout the tour.

D2C and loyalty: building a relationship, not just a sale

More relevant experiences

The accumulated knowledge allows to adapt content, recommendations, services and communications. Personalization must be useful and respect the user’s preferences; it is not simply to increase commercial pressure.

A brand can, for example, better guide the choice, remember a useful replacement, offer content linked to the product acquired or adapt the experience according to the market and the customer’s time.

Direct and coherent communication

Email, customer service, private area, social networks and content are part of the same relationship. When the information is connected, the brand can avoid contradictory messages and respond with more context.

The quality of this communication influences as much as the design of the store. A misexplained delay or complex return can quickly damage the confidence gained during the purchase.

Recurrence and membership programmes

Fidealization programs, subscriptions or early access can favour repetition, but they must be built around a real value. Constant discounts without differentiation can increase the volume in the short term and damage the margin or brand perception.

The aim is to design legitimate reasons for the customer to want to maintain the relationship.

The economic impact: margin, costs and profitability

Direct sales allow to retain a greater part of the final price, but also to transfer to the brand costs and responsibilities that other actors previously assumed: collection, platform, payments, order preparation, transport, care, returns and fraud, among others.

Therefore, D2C does not automatically amount to a higher margin. The profitability must be calculated with a full account per order, customer, product and channel.

The indicators to be monitored include:

• The contribution margin after the variable costs.
• Cost of customer acquisition.
• Conversion rate and average order value.
• Purchase frequency and customer value over time.
• Cost of preparation, shipping, care and return.
• Promotional and means unit paid.

This reading allows for a distinction between billing and cost-effective growth.

Operations and supply chain

A manufacturer used to serving large orders to distributors should prepare for a different logic: individual units, demand peaks, detailed monitoring, last-mile incidents and consumer returns.

The D2C channel needs coordination between business, technology, logistics, marketing and customer service.

The planning should cover at least:

1. Catalogue, prices, promotions and availability by channel.
2. Stock management and inventory reserve.
3. Preparation, transport, monitoring and return.
4. Attention before and after the purchase.
5. Integration with ERP, CRM, ecommerce, operators and analytical systems.
6. Responsible, service levels and procedures for incidents.

When these pieces are not aligned, commercial growth amplifies problems rather than solves them.

How to live with distributors and retagers

A D2C strategy does not have to be considered as a break with distribution. It can perform complementary functions: present the full catalogue, launch new products, test products, attend areas without coverage, offer special configurations or build services that strengthen the value of the brand.

To reduce conflicts, it is necessary to define clearly:

• The role of the direct channel within the trade strategy.
• The policy of prices and promotions.
• The assortment, exclusivity or differential services.
• The allocation of clients and territories where appropriate.
• The way to share learning that benefits the whole market.

The design must be based on the reality of each manufacturer, not on a universal formula.

Marketing for a D2C model

The channel itself needs to generate demand and build audiences. SEO, content, social networks, advertising, email and collaboration with creators can perform different functions within the route.

The collection must be connected with conversion, recurrence and margin to assess its actual contribution.

Content and social networks

The networks allow you to explain the product, show its use, listen to the market and develop a community. The content must respond to the identity of the brand and to real questions, not just replicate promotions.

Results-oriented advertising

The means paid can accelerate the scope and the uptake, but they must be evaluated together with the conversion, the margin and the recurrence. An apparently positive advertising return can hide discounts, returns or high operating costs.

Email and automation

Automation allows to accompany the user during consideration, recover opportunities, inform about the order and develop the subsequent relationship. Each flow must have a clear purpose, use reliable data and respect consent.

A road map to launch the channel

The key decisions should be resolved before choosing technology:

1. Define objectives and strategic function of D2C.
2. Select markets, audiences, assortment and value proposal.
3. Build the economic model and success indicators.
4. Design operational processes and internal responsibilities.
5. Choose architecture, platform and integration.
6. Prepare acquisition, content, care and analysis.
7. Launch in a controlled way, learn and evolve.

Starting with a narrow range can reduce the risk, provided that architecture and processes allow to grow later.

How Sitelicon can help you

In Sitelicon we have been working on technology and e-commerce projects since 2005. We have a particularly relevant experience with traditional manufacturers in their evolution from B2B to B2C.

We can participate from strategic definition to construction and operation: channel model, ecommerce, integrations, marketing, analytics, care and continuous improvement. The objective is that the D2C function as a real business capacity and not as a shop disconnected from the rest of the organization.