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Is it time to go direct-to-consumer? The benefits of D2C & what businesses need to consider

Ecommerce continues to boom, as year-on-year online sales in Australia were up over 40 percent in January alone when compared to the same time in early 2020. Many product categories, including variety stores, fashion, home and garden, health and beauty, recreation, media and food and liquor, experienced growth as part of this online shopping boom. So, it should come as little surprise that many B2B companies are looking for new opportunities to take advantage of increased ecommerce spending.

Creating a direct-to-consumer (D2C) channel is a way B2B businesses can expand their existing operations. Here are some of the benefits of selling D2C, some factors to consider before implementing a new D2C strategy, and how the right technology can make the whole process more efficient. 

Benefits of D2C

Brick-and-mortar retail has come under immense pressure in the past years, with many large chains downsizing or closing up shop completely. This does not mean that the retail experience is dead, but it has led traditional B2B businesses to explore other channels to diversify sales opportunities.

Here are a few reasons why D2C has become so attractive:

  • The experience is in your hands – by having your own ecommerce channel, you control the consumer experience, including how products are described and displayed.
  • Additional touchpoints – when selling directly, your business owns the interaction and subsequent conversations, opening the way for more selling opportunities through tailored offerings and retargeting.
  • Greater flexibility – when selling directly, there can be greater control over what is for sale and when. It also allows businesses to sell niche products that may not be commercially viable in a brick-and-mortar environment where shelf space is limited.

ALSO READ – How to start an online store in 2021

D2C key considerations

It is clear that there are many benefits to D2C, however, there are also some ways that businesses will need to adapt from an operational point of view to support this new channel, including:

  • Logistics – B2B businesses usually rely on a steady flow of orders from retailers in predictable cycles. Transit is also relatively straightforward, with most B2B sellers using less-than-truckload shipping. When going D2C though order quantities are far smaller and often spike during peak shopping seasons, meaning logistics must adapt for customers ordering a few items, so businesses need to rely on couriers and the mail system. This can create a logistical challenge to coordinate orders if the business does not have the right business management solutions in place.
  • Customer expectations – selling D2C can create much stronger brand loyalty, but the inverse is also true, as expectations are higher. Businesses need to be ready to handle inquiries about missing or damaged orders and much more. Inquiries can quickly stack up and become overwhelming for teams if they don’t have the right processes and business management technology in place to respond to inbound messages in a timely manner.

These considerations may sound daunting at first, but they can be easily navigated with the use of the right technology.

Select the best tools for the job

While it may be tempting to knock together a quick webpage coupled with a basic inventory management system, this is hardly a long-term, scalable solution. Business owners are encouraged to consider working with experienced supply chain, sales, procurement and distribution teams to implement a solution that:

  1. Supports both B2B and D2C channels, including the requirements of each channel such as varied shipping methods.
  2. Allows for separate B2B/D2C order processing to streamline warehousing, while ensure orders are allocated to the most applicable fulfilment method.
  3. Provides a single view of both channels so that data is easily comparable across all operations, making finetuning simple.
  4. Integrates ecommerce and marketing functions to unify the customer experience.

Investing in infrastructure that helps teams manage D2C and B2B with visibility over all aspects of operations will help provide a platform for future growth. It also helps mitigates business risks, such as challenges with shipping, that could hurt brand loyalty through unfulfilled or undelivered orders.

It is easy to see why adopting a D2C channel has grown in popularity with B2B companies – businesses have greater control, flexibility and potentially untapped growth opportunities.

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Jason Toshack

Jason Toshack

Jason Toshack is the General Manager ANZ at Oracle NetSuite. With extensive experience leading high-performing teams across APAC, Jason brings valuable insights to customers to help their businesses succeed and grow.

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