Why should brands enable direct-to-consumer (DTC) commerce? DTC sales channels benefit both brands and consumers for various reasons. If brands understand all the benefits of selling direct to consumer and are able to create DTC sales channels that abide by the following nine reasons, they are likely see a boost in overall revenue, as well as an improvement in various intangibles like brand image and consumer confidence.
Meet Consumer Demands
Consumers now expect to shop and transact directly with their favorite brands, anytime and anywhere. Take for example, the DTC wine industry, which saw a 15 percent increase in revenue in 2014. For consumers, the ability to save money and cut out the middleman is valuable.
Capitalize on Organic Traffic
Brands collectively spend billions a year on awareness marketing, advertising and search engine optimization (SEO). Enabling DTC commerce presents a huge opportunity for brands to leverage this spending, and monetize consumer traffic right then and there. Many people believe that organic traffic is even more effective than paid search traffic at driving conversions—albeit with less volume. According to one study by Marketing Sherpa, organic traffic for e-commerce converts at a rate of 11 percent, which is very high compared to other mediums.
Maintain Complete Brand Control
DTC channels allow brands to best represent themselves and showcase their full product line, while clearly communicating the brand story and values. Maintaining complete control enables brands to deliver upon customer desires. On a brand-owned site, brands can align the e-commerce experience to current online shopping trends. Studies show that doing so can increase conversions. In one case, after a company reformatted an online form, there was a 68 percent increase in the number of customer quotes.
Build Direct Connections with Customers
DTC channels are an opportunity to build up the lifetime value of consumers because brands can garner information about their customers and tailor personalized shopping experiences to them. It’s important for brands to be able to deliver personalized experiences, not only to drive more sales but also because 75 percent of consumers prefer it.
The most effective content creator is the brand itself and there is no better place to deliver content than on a brand-owned website. Great content can boost conversion rates by building trust and consumer confidence in the brand. Curated content pulls from objective sources, aligns the brand with industry thought leaders and provides a highly engaging experience for consumers.
Engage Customers Earlier
Third-party retailers attempt to acquire customers in the late stages of buying, but brands should be engaging with consumers at all stages, even those who are not yet thinking of buying. A recent survey conducted by the Information Technology Services Marketing Association (ITSMA) found that 70 percent of customers want to engage during the earliest stages of the journey.
Brands can test different sales models, copy, images, products, markets, etc. and quickly see which performs best to optimize their sales processes. A/B testing is a simple, inexpensive option that all brands can enable with DTC shopping. In some cases, A/B testing can inform brands of processes that aren’t working or are hindering the sales process. In one instance, a company removed a single image from its website and saw a 400 percent jump in conversion. The company would not know that if not for testing it.
Focus on Loyalty, Not Margins
Third-party retailers are driven by margins, which are short-term goals. For brands, building long-term customer loyalty is much more important than immediate returns because it is nearly seven times costlier to attract a new customer than it is to retain an existing one. (White House Office of Consumer Affairs, whitehouse.gov)
Reuben S. Hendell is the CEO of BrandShop.