Until recently, D2C strategies were complementary to the retail business, but in light of such momentous problems as the pandemic and global crisis, e-commerce has become the best channel for companies to interact with their consumers, stakeholders, and influencers. Quarantine measures and avoidance of crowds has become the new standard, and a significant drop of attendance at shops has forced brands to adapt their services to operate online.
The pandemic has suddenly changed the circumstances for doing business. eMarketer forecasts continued growth of the D2C category
by more than 24% this year, reaching almost $18 billion only in the US. The increasing role of direct communication between brands and consumers forces businesses to look for adequate technical solutions to offset potential losses and obtain the benefits of the new business model.
Individual Queries and Flexible Offers
Classic retail business schemes include different kinds of composite networks of manufacturers, suppliers, logisticians, distributors, warehouses, and retail outlets. The D2C model
eliminates intermediaries and third-party sales partners. The manufacturer receives direct contact with end consumers, their requests, and wishes.
That is a huge benefit: consumers now are more informed than ever before and want brands to respond to their requests.
Personalization comes to the fore in this model. It means the customization of each order based on consumer's wishes, a preferred method of delivery, frequency, and amount of purchases. Individualization becomes a plus for both consumers who can exactly get the desired product, and for the manufacturer, who can accurately use their resources. The personal order system saves costs on retailers, promotion, distribution, storage space, etc. Direct brand-consumer interaction is vital for brands to stay relevant and demand in a pandemic.
D2C Helps Brands Increase Its Customer Lifetime Value
The customer feels more valuable when the brand considers its individual needs. Long-term brand-to-customer relationships during the pandemic have changed: it is no longer a special atmosphere of stores and a community of fans of the brand. Companies are forced to take into account the real requests from customers instead of superficial respect. From the other side, the customer support is becoming more stable, diverse, and geographically broad, as well as more understandable. The D2C model provides insight into customer behavior and improves and speeds up communication. With a direct relationship with the consumer, the brand can quickly test new products and get a response.
Source: The D2C model eliminates intermediaries
Source: Individualization becomes a plus for consumers
Source: The D2C model provides insight customer behavior
Technology Base: What Brand Needs to Build D2C
The D2C approach is based on data collection and analysis. The technology base of the connection between brands and consumers, supports transactions, collaboration, communication and enables decision-making based on previous experience.
The technology that handles the dataflow on orders - Big Data
- can do detailed analysis and predictions of customer behavior. The database of buyers, the frequency of purchases, their location, and wishes form the process of the business, make the product more relevant and appropriate. Buyers' sites based on AI form recommendations and personalized offers. The more data is analyzed, the smarter the platforms become.
Transparent order accomplishment and timely logistics with tracking and control become not an advantage, but the main expectation of the customer. Tracing with the Internet of Things sensors will provide confidence in the origin and quality of the product.
The strategy of direct appeal to the consumer is not just a trend, but the only condition for the survival and growth of consumer brands. Improvements in services and products must directly meet customer needs, and this requires a sustainable technology base.
Data security at the proper level can be provided only by distributed ledger - the technology of decentralized storage and constant verification of data. Personal data, addresses, and preference lists should be protected from leaks and intrusions.
Consumers are changing their expectations and preferences in response to a global crisis and pandemic. To meet the demands of flexibility, security, and convenience, businesses need to apply combinations of technologies and integrate them correctly.
FCE Platform combines cutting-edge technology
to build harmonious two-way brand relationships with consumers. FCE digitizes and automates supply chain tracing, building trust in the brand, and protecting its reputation. The unique Internet of Things for Business system, combined with DLT and Big Data software, transforms a business into an Industry 4.0
that can remain competitive even in unstable periods.
The world is in a difficult transition now. Previously, companies had time to doubt and try, but now they need technology and their appropriate combinations to meet the realities of the market and grow.
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