2020 was the year when Direct to Consumer (DTC) achieved mainstream status, with renowned brands like Adidas, Kraft, Heinz, and PepsiCo shifting to a DTC-first model. The appeal of DTC is not only that it puts control back in the hands of brands but it also allows brands to have a 360-degree view of the customer, at every touchpoint, offering more opportunities to connect through tailored and personalized customer experience. Powered by the rise of e-commerce platforms, social media, connected devices, and channels, digitally native brands now have multiple pathways to build customer loyalty.
According to GlobalData, the e-commerce market in Australia has been on a high growth curve for the past few years, and the COVID-19 outbreak is further set to boost e-commerce sales in the country with the e-commerce market value predicted to grow from $47B in 2020 to over $77B by 2024.
The rising appetite for online shopping is driving brands to increase their digital presence, and the increasing demands have also raised expectations when it comes to customer experience (CX). About 73 per cent of consumers expect brands to understand and cater to their individual needs.
If brands want to adopt a DTC strategy, and do it well, data-driven CX has to be at the core of their marketing strategies.
Achieving real impact through CX
In traditional retail, wholesale manufacturers sell through retail distributors with little control over how the product is sold – where exactly it is placed in the store, how much information salespeople share about the product, and whether the customer is satisfied with the overall shopping experience. The brand experience is no longer standalone but instead depends on the retail experience. If the latter is unpleasant, the customer’s frustration will likely get projected on the brand itself and may even prevent a sale.
In contrast, a DTC approach allows brands to have complete control over their product lifecycle, marketing, and every moment of engagement. Since they are so close to the process, they have first-party data to connect with prospects and customers on a one-to-one basis, at every touchpoint. Customers expect DTC brands to use that data to enhance and personalize CX, regardless of the channel that they are using at any given point in time.
Those touchpoints live in a vacuum, and marketers have the advantage of leveraging customer data to guide changes to their marketing strategies and create a frictionless experience for the customer. DTC players know when, where and how consumers engage with their brands and the effect of each touchpoint. In other words, they have the information necessary to power ultimate personalization.
Managing omnichannel transitions
However, DTC isn’t the be-all and end-all of success. Consumers are demanding a holistic omnichannel experience, and this includes traditional, bricks and mortar retail. The demand for an omnichannel experience fits with the nature of convoluted modern shopping and ever-changing consumer behavior as around 73 percent of people now demand the convenience of an omnichannel approach for their shopping journey.
Moreover, from a business and sales standpoint, giving the consumer more flexibility drives revenue growth and retention from the added convenience of a consistent omnichannel experience such as allowing customers to visit a retail location before purchasing online or giving them the option to buy online and collect in-store. According to research by V12, retailers with omnichannel strategies have a 91 percent greater annual customer retention rate.
If brands choose to go this route, it is imperative for every step of omnichannel journeys to contribute to a positive and seamless overall experience – including the physical ones. This can only be achieved when all systems and marketing programs are communicating with each other to ensure that each interaction informs, and is informed by, every other interaction in real-time.
However, brands won’t be able to create touchpoints that are deeply engaging, one that demonstrates attentiveness to customer needs and preferences, and one that rewards loyalty with increasingly compelling experiences, unless they invest in their data. Data holds the keys to defining customer journeys, discovering pain points, and optimizing and integrating experiences across channels, in real time, to better understand and serve customers.
As consumers globally continue to live with uncertainty amid the pandemic, their purchasing behavior becomes more unpredictable. Adopting or transitioning to a DTC model, while delivering consistent and exceptional data-driven CX will help brands and marketers accommodate unforeseen consumer behavioral changes and capture more market share.
Brands that want to capitalize on this eCommerce boom need to engage directly with their consumers to future proof their businesses against the evolving market, changing trends, and the impacts of the pandemic.