The trend for businesses to sell direct to consumer (D2C) has turned the traditional retail model on its head, as Ryan Foster of RFD explains.
Brands are looking to ecommerce tools to help them gather their own data, form closer relationship with customers, respond more quickly to demand, and cut costs.
Ecommerce industry experts eMarketer estimate that 2018 figures will hit £93.82 billion and account for 20% of all retail sales.
The trend is underpinned by tools such as cloud-based ecommerce platform Shopify Plus, which enables brands to be agile and responsive to changing consumer behaviour, engage with their customers offering personalised experiences and scale rapidly without the concern of technology infrastructure.
Brands using Shopify Plus have achieved some phenomenal results and it now powers some of the world’s fastest growing fashion and lifestyle brands.
Our client active wear brand Gymshark went from £12.5 to £41m turnover last year thanks to 11 international webstores; and Australian swimwear brand Triangl grew revenues from zero to $60m in its first three years of business, and now sells 1,500 bikinis a day.
Both clients are typical of very successful D2C brands that own all their customer data and have never had physical shops or traded on big platforms such as Amazon. The only place you can buy their products is from their own websites, so the customer experience needs to be personalised and exceptional.
Key benefits of D2C include:
Level playing field: startups can compete with big established brands, and niche brands with a devoted fan base can create exclusive releases, new collections and surprise promotions quickly and easily.
Quality data: Selling D2C via your own ecommerce store means you, rather than the retailer, own your customer data and can control the customer experience.
Bigger margins: by avoiding the traditional B2B or wholesale model you can simplify your cash flow. You are not waiting on orders and payments, often with long terms, from retail partners.
Independence: you are not dependent on retail partners. If you sell on Amazon for instance, you have little say in how your product is sold and it is difficult to gain visibility alongside your competitors, because the retail partner and their platform control the customer experience, rather than you.
Wider reach: you have direct contact with customers all over the world, thanks to widely available international payment solutions, website translation software and services, and third party fulfilment services that handle customs, duties and taxes.
Modern ecommerce platforms such as Shopify Plus mean all of these can be integrated at a fraction of the time and cost of traditional enterprise ecommerce platforms. This allows you to spin out new stores for new markets quickly and cost effectively.
Customer engagement: social media-friendly brands can use social media channels and social influencers to raise awareness through brand storytelling, driving traffic directly to their stores and letting new brands scale up quickly.
In our role as one of only a handful of UK specialist Shopify Plus partner agencies capable of designing, building and optimising websites for the platform, we work with new and established brands alike that are disrupting the traditional retail model to significantly boost the bottom line.
D2C allows them to focus time and effort on sales, marketing and product development rather than their ecommerce platform, and build better and more profitable customer relationships into the bargain. And who wouldn’t want some of that?
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