What does D2C mean?
Direct to consumer (D2C) refers to the sales channel where a brand will sell their products at retail cost directly to their customers.
D2C sales channels often utilise e-commerce platforms and market directly to the end customer instead of through intermediaries like wholesalers or retail outlets.
The Direct to Consumer model is becoming more and more frequent as the market experiences a shift away from traditional retail and department stores and brands finding consumers buying directly from them.
D2C brands will often sell through their websites and even on social media platforms to negate the cost of renting retail space. These brands are frequently opening brick and mortar flagship stores to generate sales. It allows brands to sell directly to their customers and utilise software to manage inventories for each retail space and online centrally.
Advantages of direct to consumer – D2C marketing
Direct marketing is a marketing strategy that focuses on promoting goods and services directly to customers. A good direct marketing campaign will:
- Create a better relationship with new and existing customers
- Get immediate feedback on your products and services
- Give you a better look into what marketing strategies work best for your campaign
- Create marketing content that resonates better with your customers
- Improve sale numbers
1. Better control over your marketing budget
Outsourcing your advertising campaigns require the use of a contract. It is done to protect both parties and give you some degree of control financially. In some cases, some of these often go over budget and leave you reeling from the spiralling costs of advertising.
Employing a direct to consumer strategy gives you full control over your marketing budget. You can start with a more conservative approach and quickly ramp up once you prove this is successful. Direct marketing involves targeting a specific customer base, which limits the market. By setting realistic goals, you can adjust your marketing budget accordingly.
2. Gives you direct access to marketing data
Direct to consumer marketing provides you access to real-time data. It is also a great way of measuring your customer’s reaction to your products and gives you a quick way of testing new goods or services.
This marketing approach allows you to test new markets, measure the effectiveness of your strategies and gives you the flexibility to adjust your campaigns. Gathering data is critical to making accurate assessments and improving the next round of the campaign.
But this is not just a question of collecting vast amounts of data. More importantly, the quality of the data should not be compromised.
When speaking of quality, this can be measured by where you get the data. It can be collected from a variety of marketing channels such as:
- Email marketing
- Interviews
- Questionnaires
- Social media
3. Helps you target ideal customers
The process of determining your perfect customer begins long before your first product rolls out of the manufacturing floor. During the product development process, the target customer is determined. Direct marketing provides you the chance to create a strategy that specifically targets this group of customers. It ensures that your plan is focused on the right market, giving you the best results.
A well-planned direct marketing strategy helps you understand how your target market is responding to your goods and services.
4. Improve customer loyalty and encourage repeat purchases
Marketing directly to your customers creates better, more personalised interactions. You can connect directly, giving you instant feedback into what a customer likes and does not like. Direct to consumer marketing helps build a personal relationship, which improves customer loyalty.
You can encourage repeat customers by improving your product according to your customer feedback. Direct marketing strategies can also help re-establish to previous customers. The key here is to keep a customer’s record that tracks both current and previous customers and spending habits.
5. Control over personal branding
Having full control over marketing gives you a unique voice or personal branding. By doing everything in-house, you are consistent with your marketing efforts. When you sell your products through a retail store or a third-party, you lose some control over your brand.
Stores can increase product prices regardless of the recommended retail price (RRP). It can send mixed signals to your customers. There is also an issue of marketing being done by a third-party. The store may not share the same marketing materials being employed by the company.
6. Maximise earning potential
Eliminating the different steps or processes that stand between you and your customer also helps increase your profit margin. Doing your marketing in-house gives you overall control of what strategy to use and how you spend your resources. It gives you the ability to increase or decrease your efforts based on its effectiveness and your current finances.
Your marketing strategy team, for example, could employ several tactics at first and determine what is the most efficient. One team can employ email marketing, which is free or use paid advertising over the radio. The bottom line is to select what marketing strategy works based on cost and effectiveness to maximise your company’s earning potential.
7. Create a better business model
Direct to consumer marketing enables you to communicate directly with your target market. By having a better interaction with your customers, you can modify your marketing strategy accordingly. Direct marketing helps you adapt to current market conditions. Using this strategy gives you the option to:
- Discontinue products
- Increase marketing for specific goods and services
- Identify poor performing strategies
- Follow-up on a promotion
Methods of direct to consumer selling
Direct to Consumer marketing should not be confused with mass marketing. Direct marketing happens when the ‘manufacturer’ or ‘service provider’ connects with the customer. It can include an end-user or another business. In all these cases, there is no intermediary.
1. Internet Marketing
The internet makes it possible for companies to market their products regardless of location. Rather than focusing their marketing efforts in a single area, they can reach more people. The internet makes direct marketing easier, cheaper, and flexible.
Regardless of the business or marketing model, maintaining an online presence has become critical to a company’s success. Internet marketing does not only include businesses that maintain personal websites. It also includes social media marketing.
2. Telemarketing
Previously a popular choice for direct marketing, this has since been overtaken by online/ internet-based marketing strategies. However, this is mostly frowned upon by consumers who find these calls obtrusive. The secret to a successful telemarketing campaign is to have a good calling list and a compelling script.
3. Face-to-face selling
The most traditional method of direct to consumer marketing, face-to-face selling the use of an in-house trained selling force. It involves a sales team randomly selling products to individuals or visiting homes. Examples of this marketing model include Avon and Mary Kay.
4. Kiosk Marketing
It employs the use of a strategically placed vending machine (e.g., coca-cola vending machine, ATM) or a small booth in a mall with high foot traffic. Interactive kiosks are machines that give self-service access to products.
5. Catalogue
Still, remember those catalogues that are sent to your home over the mail? Catalogues contain a list of products that are sent to a target mailing list. Modern catalogues come in the form of electronic storage media (USB, CD-ROM) or emailed as an attachment.
Is Direct to Consumer (D2C) the right move for you?
Direct to consumer marketing has continued to grow in popularity even among major brands because of the many benefits that are simply hard to ignore. Businesses of any size can benefit by saving on costs, working directly with consumers, and eliminating middlemen.
Whatever your industry, direct to consumer (D2C) offers you the opportunity to improve business processes that are more attuned to your customer’s needs.
