D2C The Winning Retail Strategy of 2021
At Vserve, we see direct-to-consumer business models as the optimal way to build your brand in an increasingly socially interconnected world. We believe that in 2021, D2C eCommerce is proving to be the smartest choice, and we didn’t come to that conclusion lightly. Let’s take a look at some data:
Back in 2020, eMarketer forecasted that D2C sales would experience growth of 24.3% in regards to 2019, partly due to the pandemic. According to eMarketer’s estimates, D2C eCommerce is expected to grow another 15.9% in 2021, reaching $175 billion in sales by 2023.
The reason why the D2C Ecommerce model works is that it allows businesses and brands more flexibility and control. They have a direct line of communication with their customers and can use that power to position their brand messaging and strategy in a way that engages their audience. We know that being successful in this day and age is all about engaging the public in ways that are meaningful to them. An engaged audience is essential to your brand, as well as having a direct effect on your conversation rates.
But don’t take our word for it, just look at D2C brands like Casper and Allbirds. In 2014, Casper launched with 5 co-founders and only 1 mattress option and went on to reach $100M in sales in less than 2 years. Allbirds reached a 1.7B valuation by 2020. These are only a few out of a long list of examples of successful D2C eCommerce businesses. Even the big brands like Nike and L’Oréal are getting in on the action.
However, building a successful D2C eCommerce business is no walk in the park. There’s a lot of competition, and even after you’ve managed to carve yourself a space you might struggle with turning that into significant sales. Luckily for you, we have crafted a guide to help you transform your engagement into profit. Let us walk you through the pitfalls that you’ll need to watch out for, and the steps necessary to turn that attention into sales.
Key Challenges in Converting your D2C Audience
One of the main draws to building a D2C eCommerce brand is just how simple it is. Anybody can do it. However, this has turned from a benefit to a problem. Competition is growing every day and it’s fiercer than ever. This is why you need to pay close attention to the challenges and roadblocks you will face when establishing your brand to successfully navigate them.
Competition, Personalization, and Product Differentiation
One of the problems in D2C eCommerce is standing out from the rest. Even brands that might be considered niche could find themselves competing for attention. Not only that but there are also big players joining the game, like Amazon, which has over 80 private label brands.
Personalization is the name of the game. You must provide users with a unique proposition and value that they can’t find anywhere else. Special promotions, contests, and other community-building opportunities are great to build a brand that feels different, while leveraging the data you get from customers to personalize their experience will help you seal the deal.
Advertisement and Growth
To grow you must reach your audience and that costs money. For the longest time, social media channels have been the go-to for marketing purposes. We are not going to say this isn’t still the case, but what we can’t deny is that this is no longer as cost-effective as it used to be. According to a Forbes report, the advertising costs for platforms such as Facebook are rising at a rate of 90% per year. That’s insane! If you don’t have the budget to keep up with these rising costs, you will struggle to get customers on your site.
The key is connecting with customers in other ways. Content marketing is an excellent example of a way to attract new customers that is organic and more cost-effective on a long-term basis. It produces triple the leads for every dollar you put in while costing less than half what traditional marketing costs.
5 Proven Ways to Increase Conversions in Your D2C ECommerce Store
Now that we have gone over the roadblocks to a successful D2C enterprise, let’s take a look at how you can improve the conversion rate for your brand:
Focus on the content
Nowadays an effective content strategy is paramount to a successful business. You must engage people. Give them content that’s informative and helpful to their needs. It could come in the form of video tutorials, helpful tips, or thoughtful blog posts.
Highlight your product value
Show potential customers, old and new, why your product is good for them. Not just from a marketing perspective, but a social and practical point of view. Think about why they would be looking for it, and use that to craft better key points.
Manage your product data
You have to look at the data. Demographic and behavioral data will tell you a lot about how your community is engaging with your product. You can then turn around and use this information to your advantage to personalize their experiences and increase your sales. You can also get some expert support to manage and enhance your product data efficiently with Vserve product data management services.
Harness the power of your community
The power of brands comes from the people that adopt them. Building up a community will do wonders for your engagement. Online or even in-person events can help foster that sense of community, and by extension loyalty.
People want companies that they can feel comfortable with. You don’t want your brand to come off as pretentious or intimidating. Interact with your clients on social media channels, not to sell but to communicate. And, give them an opportunity to connect with you on various channels for queries, concerns and improvement with an effective omnichannel customer support service. .
After looking at all the data we can confidently, and objectively, state that the D2C eCommerce model is here to stay. The numbers don’t lie. If you have or are looking to start a business in 2021, you can’t ignore the potential we have shown you. After reading our guide, you should be prepared to start turning your engagement into a profitable business. Are you still not sure how to start? Don’t worry. You can always opt for our end-to-end eCommerce support services specific for D2C businesses that take your brand to the next level.