Everything You Need To Know About D2C Marketing In E-Commerce (Guide)
Did you know that, in 2021, D2C e-commerce sales reached 128 billion U.S. dollars in the United States and that the market size is expected to grow to almost 213 billion dollars by 2024? (Statista, 2023).
Wondering what D2C marketing is?
D2C marketing stands for direct-to-consumer marketing. It is a business model that might be suitable for your eCommerce store.
We understand that deciding which business model to follow is a significant decision; therefore, we are here to help you with that.
In this article, we will discuss what D2C marketing is and how it works. We will also look at its advantages and the best marketing strategies to use. Finally, we will present some inspiring examples of eCommerce brands adopting the D2C model.
Table of contents:
- Increased Control Over Different Aspects of the Business.
- A Huge Amount of Customer Data.
- Stronger Relationships With Customers.
- Opportunities for Expansion.
- Increased Revenues.
- The Best D2C Marketing Strategies:
- Conduct Thorough Market Research.
- Diversify Your Marketing Techniques.
- Adopt an Omnichannel Approach.
- Embrace Social Proof.
- Focus on Successful Lead Generation.
- Collaborate With Customers.
What Is D2C Marketing?
Image source: dotdigital.com
D2C marketing, or Direct-to-Consumer marketing, is defined as an approach adopted by businesses that wish to eliminate the need for an intermediary and sell their products or services directly to consumers. The intermediaries referred to here include retailers, wholesalers, or distributors.
In other words, D2C is a strategy businesses use to stop relying on intermediaries, interact with their customers directly, and use their digital channels to have control over the entire process.
Bypassing intermediaries and selling products or services directly to consumers makes D2C marketing a comprehensive approach that requires eCommerce businesses to focus on several crucial elements, such as:
- E-Commerce Website. It is the primary channel for interacting with customers and directly selling them products or services. An eCommerce store that wishes to adopt D2C marketing needs to invest in its eCommerce website by making it secure, easy to understand and navigate, and mobile-friendly.
- Social Media Platforms. Today, social media is the best way for eCommerce brands that use D2C marketing to engage with their customers. Through social media platforms, D2C brands can capitalize on digital marketing, promote their products or services, leverage shopping features, announce news and updates, and provide customer support.
- Mobile Apps. An eCommerce brand deciding to follow the path of D2C marketing needs to invest in mobile commerce, which comprises 73% of the total eCommerce marketing (Zippia, 2022). Alongside an eCommerce website and social media accounts, a mobile application can provide more help to a D2C brand to engage more directly with its consumers.
- Consumer Data. For a D2C brand, interacting directly with consumers requires it to gather as much data as possible about them. Data helps you better understand your customers, which is crucial if you don’t have help from any intermediaries. So, to be able to manufacture, market, sell, and distribute your products or market, sell, and provide your services without any help, you will have to invest in generating valuable customer data and insights.
Top 5 Advantages/Benefits of the D2C Model
Now that you understand the meaning of D2C marketing, it is time to discover its many advantages. E-commerce businesses that choose to sell directly to their consumers enjoy many benefits that we will tackle in the following points.
1- Increased Control Over Different Aspects of the Business
As we mentioned earlier, adopting a D2C approach means that you’ll have a significant amount of control over many aspects of the business, such as:
- Brand Message. D2C brands have the freedom to convey the message they want along with their values, tone of voice, and even their desired visual elements. In other words, when you adopt a D2C marketing approach, you get to shape the identity of your eCommerce brand just the way you want.
- Products or Services. Having control over everything related to your products or services is an expected advantage of D2C. To better illustrate, D2C brands can choose how they want to develop, innovate, or promote their products or services without external interference from any intermediaries.
- Pricing Strategy. Another benefit of D2C is the freedom to adapt your pricing strategy according to your needs and not the needs of intermediaries.
- Customer Data. As mentioned, working with a D2C approach requires a lot of customer data. Even though this may require resources, such as effort and money, the benefit you get here is complete control over every little piece of customer data.
- Marketing and Sales Strategies and Channels. D2C brands are free to choose where and how to market and sell their products or services.
- Inventory. This benefit is mainly for D2C brands selling products. This approach allows eCommerce brands to manage their inventory and stock according to demand. This type of control minimizes the risk of overstocking or understocking.
- Logistical Decisions. D2C allows eCommerce brands to control all distribution and delivery-related decisions.
- Business Policies. When using a D2C approach, you are the only one with the power to set your business’ policies, such as returns and exchange policies.
2- A Huge Amount of Customer Data
Image source: acquire.io
Don’t get bored of reading about customer data in D2C just yet!
We’ve already covered that a D2C brand needs to depend on a rich database, that gathering all that customer data requires a lot of effort, but that the brand gets complete control over that data.
With such control over such an amount of data, an eCommerce brand can enjoy so many benefits:
- Personalization Opportunities. The more customer data you have, the better you can implement personalization. With the data that a D2C approach offers, you can offer meticulously personalized product recommendations, provide targeted content and marketing messages, and identify cross-selling and up-selling opportunities.
- Better Segmentation and Customer Targeting. Having insights into customers’ interests, preferences, needs, wants, behaviors, and buying patterns allows D2C eCommerce brands to conduct better customer segmentation and implement more targeted marketing campaigns.
- Increased Customer Retention and Reduced Customer Acquisition Cost (CAC). A positive result of having a lot of customer data and acting upon that data is an enhanced customer experience, which makes customers more loyal to the brand. More loyal customers automatically means a higher retention rate and a lower customer acquisition cost.
Speaking of segmentation and customer data, Converted.in offers a marketing automation tool that can automate the customer segmentation process and gather all your customer data in one place with a 360-degree customer view.
3- Stronger Relationships With Customers
Having direct interaction with customers helps build stronger relationships with them. Customers like to feel they can directly communicate with an eCommerce brand without going through someone in the middle. That spreads the idea that you are reachable and accessible to your customers, which makes them trust you even more. Trust is the key to the success of relationships with your customers.
Moreover, a D2C brand is in charge of the entire customer experience, which means it is the only party responsible for responding to customers at all touchpoints. If managed correctly, it can help the eCommerce brand develop a stronger relationship with its customers.
4- Opportunities For Expansion
As an eCommerce brand with a D2C business model, you are responsible for your own destiny. That means you can work on a national level or expand internationally. The advantage that the D2C approach offers is that when you decide to leverage the available expansion opportunities, you are not committed to nor constrained by intermediaries. You can choose to expand whenever, wherever, and however you want.
5- Increased Revenues
Having zero intermediaries means you don’t have to share your profits with anyone, which means more revenues for your eCommerce store. In other words, one of the advantages of a D2C business model is that you capture the total retail price of your products or services.
The Best D2C Marketing Strategies
After discussing the advantages of D2C marketing, it is time you get to know the best marketing strategies that ensure the success of this business model, which is what we will be tackling in the following points.
1- Conduct thorough market research
D2C marketing is all about connecting with your customers on a deeper level. For an eCommerce business to do that without the help of any intermediaries, it must understand the market very well.
Understanding the market entails:
- Being aware of customers’ problems, pain points, wants, and needs.
- Identifying gaps in the market.
- Identifying opportunities, risks, and challenges.
- Determining your competitors’ strengths and weaknesses.
- Comparing your pricing strategy to that of others in the market.
- Researching the best channels to reach your customers.
The previously mentioned points are essential for any eCommerce business to have a successful D2C business model, and the way to reach them is through a proper understanding of the market.
2- Diversify your marketing techniques
With a D2C business model, you need all the marketing and advertising help you can get. Therefore, we advise you to diversify your marketing techniques and your advertising channels.
By diversifying your marketing techniques, for example, you can use a mix of FOMO and scarcity marketing techniques, which have proven to be very effective in increasing conversion rates if used correctly and moderately. However, real diversification will appear when you combine such marketing techniques with others, such as cross-selling and up-selling. So, choose the marketing techniques suitable for your business, but try to employ some diversification for better results.
As for diversifying your advertising channels, for example, you can use a mix of:
- Social Media Marketing: Social media platforms represent powerful channels for marketing and advertising, especially for D2C brands trying to engage closely with their customers. Within social media marketing, you can leverage the power of influencer marketing and capitalize on it to better reach your target audience.
- Search Engine Marketing: Whether you are leveraging search engine marketing organically through a strong SEO and content marketing strategy or pay-per-click ads, search engines are another effective way to promote your business.
- Email Marketing: Email marketing should always be your friend. Research shows that around 99% of email users check their inboxes daily, and 58% do it first thing in the morning (Mailbutler, 2023). Therefore, you should take advantage of the chance for your D2C eCommerce brand to be the first thing a customer reads about in the morning.
Speaking of email marketing, the tool offered by Converted.in can create, personalize, launch, and automate all your email marketing campaigns.
3- Adopt an omnichannel approach
We can’t advise you to diversify your marketing channels without telling you to adopt an omnichannel approach. It aims at engaging customers and keeping them loyal to the brand.
It entails offering products or services to customers simultaneously across all channels, platforms, and devices while ensuring that the message transmitted is the same everywhere.
The goal is to create a strong connection between the online store, social media platforms, mobile application, physical store (if applicable), and other channels to reach customers wherever they are and offer them a connected, seamless shopping experience.
** Check out these 10 omnichannel marketing examples for inspiration.
4- Embrace Social Proof
As a direct-to-consumer eCommerce brand, you are on your own when it comes to giving your customers social proof. In other words, your online store, social media platforms, emails, and other channels are the only sources where customers can get social proof.
In addition to influencer marketing, which we mentioned previously, customer testimonials can be a great way to give customers the social proof they need to trust your D2C brand.
5- Focus on successful lead generation
Lead generation is of high importance to any direct-to-consumer brand. D2C brands should leverage all possible lead-generation techniques to build their customer base and, in turn, increase sales and customer retention.
One of the most effective lead generation techniques a D2C brand can benefit from is relying on lead magnets. Lead magnets are incentives offered to potential customers in exchange for their contact information, usually their email addresses or phone numbers.
However, generating leads isn’t enough. You have to work on nurturing these leads by developing your relationship with potential customers throughout each step of their buying journey.
** Check out this article to learn the best eCommerce lead magnet ideas to generate more sales.
6- Collaborate with customers
Another way you can build stronger relationships with customers as a D2C brand is by collaborating with them. In other words, make your customers participate in developing your products or services.
When you make your customers a part of the process, you gain a lot of benefits:
- You create a sense of community around your eCommerce brand.
- You guarantee that your products or services will be well-received.
- You make your customers feel engaged and a part of something.
Examples of E-Commerce Businesses Adopting D2C Marketing
If you plan on switching your eCommerce business to the D2C business model, you need to follow the lead of others who did. In other words, you need to look up other eCommerce brands that successfully implement D2C marketing to learn from them and get inspired.
- Dollar Shave Club
Dollar Shave Club is an American company that delivers razors and other personal grooming products to customers by mail. It has an online store where customers can subscribe to the service. It is one of the best examples of a direct-to-consumer eCommerce brand.
This brand sells and delivers these razors and grooming products directly to consumers without the involvement of any intermediary retailers to distributors.
Glossier is another inspiring example of an eCommerce brand adopting the D2C business model and not relying on intermediaries.
It is a beauty and skincare brand that has managed to gain a lot of success by leveraging social media, influencer marketing, and user-generated content. However, instead of collaborating with mega influencers and celebrities, Glossier considers all regular women to be their influencers, which is why it is considered a community-driven beauty brand.