Written by Ordering | Jun 30, 2022 8:18:27 PM
Direct-to-consumer services can be defined as a business model used by companies that provide their products and services directly to the end consumer, without intermediary platforms or retailers.
Before 2020, third-party platforms, such as large-scale retailers or on-demand food delivery apps, seemed like the way to go for small business owners. The partnership offered immediate access to an enormous scope of customers, and the financial risk of being involved in a commission-based platform was shallow.
However, in recent years, many small businesses and big franchises have been forced to get out of their comfort zone and approach new tactics to survive in an uncertain situation of the pandemic. Companies, who previously had not considered offering direct-to-consumer services online, had to quickly set up an online shop to make up for the lost in-store sales.
Why are the DTC services becoming more and more desirable for customers?
Approachable and personal service
There has been a significant shift from fast shopping and large-scale retailers towards more low-key and personal services. Nowadays, customers are overloaded with information and overstimulated by endless options, which causes the shopping experience to become very cold and impersonal.
They are looking for transparency and trust in the brand. When shopping, customers want to dive deeper and know more about the production process and where all their food ingredients come from. The story and purpose behind the brand, and its level of sustainability and involvement in global issues, have been of great importance for customers when making purchasing decisions.
Supporting small businesses
Customers, of all generations, are deviating from purchasing from large corporations and want to be more involved in investing their money in supporting local businesses.
They appreciate authenticity and a friendly, personal touch when looking for on-demand services. Choosing a direct website or app means being a part of a community and learning the story of how the brand was created, reading meaningful educational content on their website, or learning new recipes.
Enhanced customer service experience
It is one of the most important touchpoints when creating a relationship with new customers. Being able to directly get in touch with the team in case of questions or solving delivery issues. Being accessible to the customer at all times, and for them to have an actual interaction with a human team member rather than an FAQ page. Additionally, customers appreciate alternative communication options for ordering the product or service, such as through a WhatsApp chat or direct messages on social media channels.
What is the benefit for business owners to go D2C?
Full ownership and access to customers' data and being in touch with them regularly through channels such as social media, gives you a window into their lifestyle and helps you, as a business owner, to understand their buying patterns and habits better. Having complete visibility of sales patterns and purchases saves enormous costs, preventing business owners from purchasing too much or too little inventory.
Receiving feedback firsthand is going to give you a lot more profound perspective of what their needs and wants are regarding features, and the overall online shopping experience.
Direct revenue stream
Another factor determining why so many companies are starting to move towards direct to customer services is a commission-free revenue stream. Being a part of a third-party platform increases the level of dependency for smaller businesses.
Full dependency on third-party delivery apps and retailers means agreeing to commission fees that are frequently too high for what the business can realistically afford. On the other hand, going D2C provides direct access to revenue. It makes it possible for businesses to provide more affordable prices for their customers, attracting more attention and customer loyalty.
DTC model improves the company's overall financial health since the businesses are free from hidden fees or additional costs
In recent years, smaller businesses started to notice the opportunity of having their direct on-demand delivery platform and realized that they could survive independently. Combined with the consumer behavior shift, D2C turned out to be an excellent opportunity to save on commission costs and increase the net income and small businesses' financial health.
Increased conversion rates
Customer engagement and completing the sale do not always go hand-in-hand with the level of traffic on the website. Many business owners end up disappointed after investing money and hopes into advertising on third-party platforms.
In contrast, their conversion to sales remains at a low point. Customers who visit a specific direct-to-customer website are looking for a particular product or are already familiar with the brand's name before their visit. As a result, they are a lot more likely to complete their purchase.
Are you ready to start your direct-to-customer online service today, but you're still struggling with technology? Get in touch with Ordering, and set up your system in less than a week. You are not required to be an expert in coding or design, to set up your platform right away.