by Ordering on Jun 30, 2022 3:09:53 PM
D2C is a term that stands for direct-to-consumer. A company produces a given product or service independently, as well as distributes it within its own channels.
The D2C business model is currently experiencing a revolution and shaping the future of small businesses, as well as bigger chains. The model which involved the middle man, like large retailers, seemed like the way to go before the pandemic.
Retailers were often afraid to branch out on their own, due to the fear of losing a stable revenue stream and a large pool of new customers.
However, in 2020, as many small businesses shut down completely and customers were not interested in direct in-store purchases, online D2C platforms turned out to be the only way for those businesses to survive. In a lot of cases, business owners realised that it is a great solution for saving costs, increasing revenue, and building stronger relationships with customers.
Why is D2C becoming more and more appealing to customers?
Personalized shopping experience
Customers are shifting from cold and impersonal, fast shopping to platforms that are more low-key and customer experience-oriented. They want to receive personalized offers and have quicker access to their favorites, rather than spending hours browsing through thousands of options.
Connection with the brand
Customers are becoming more conscious than ever, digging deeper into the story behind the brands and their suppliers. Shoppers are a lot more concerned with sustainability and they want information on where their food ingredients are coming from, where their clothes are being made, and are willing to pay extra for supporting a good cause.
Transparency
The 2021 Label Insight Food Revolution Study revealed that about 94% of customers consider how much information a brand reveals and consider it to be a factor when purchasing a product.
Having a D2C platform, as a small business owner, creates a bridge between you and the customer. Having a direct website or application, for example, as a restaurateur, gives you an outlet to share the story behind your brand. This includes the story of your suppliers, interviews with the chefs, and reasons for picking sustainable ingredients. Giving the customer a peek behind the curtain and creating value through integrity.
How can D2C benefit the company?
Control over customer data
Being a part of the eCommerce and on-demand delivery business means that you need to have data analysis skills, in order to fully understand customer data. For business owners, access to data provides full control of their position among the competitors online.
Unfortunately, many new, small business owners do not have a full awareness of the importance of customer data and give it away to third-party platforms. Large intermediaries often take advantage of possessing data and only give their partners a glimpse of their customer’s statistical data.
Having a D2C online business provides full ownership and access to customer data. This factor is critical when making any strategic decisions, regarding marketing campaigns, investment, and inventory planning.
Having full visibility of sales patterns, times of purchases, saves huge costs, as it prevents business owners from purchasing too much or too little inventory. Seeing spending patterns of your customer
Commission-free revenue stream
Another reason for D2C being on the rise is the increasing percentages of commissions. Large third-party platforms have established a level of dependency for smaller brands and restaurants, which led them to agree to the high commission rates. However, lately, smaller businesses started to notice the opportunity in having their own on-demand delivery platform and realized that they can indeed survive independently.
Combined with the consumer behavior shift, D2C turned out to be a great opportunity to save on commission costs and highly increase the net income and small business’s financial health.
Increased conversion rates
The paradox of being a part of a large third-party provider platform is that the high traffic does not guarantee higher conversion and customer engagement. A lot of times, small business owners remain disappointed, because they invested money in advertising and driving traffic to their profile, which did not end up converting into sales.
D2C is more likely to drive conversions, since customers who do enter those direct apps or websites, are likely either already familiar with the brand or look for a very specific product and service. Although the initial traffic might be smaller, the number of ‘quality’ visitors is a lot higher in the long run for businesses that have taken the step to start their own D2C.
Do you think that the D2C model is for you?
If you want to take your business to the next level and switch to a D2C model, platforms, such as Ordering, can help you to set up a seamless custom-featured application or website, which is going to be a gateway for you to effortlessly switch to D2C. The platform does not require any initial coding or design skills and can be completed in less than a week.
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