Direct-to-Consumer (D2C) is on the Rise
There’s been a massive shift in how businesses sell their products. The rise of Direct-to-Consumer (D2C) sales has become a significant trend.
What’s Driving the Rise of D2C?
The growth of e-commerce is clearly the primary factor in D2C (or sometimes; D2C) adoption, making it easier for businesses to reach and sell directly to consumers.
Technology advancements have also made it easier for businesses to track and analyze customer data, allowing them to better target, understand, and connect with their audience.
Many D2C brands prioritize providing their customers a personalized and convenient shopping experience.
The growth of social media and influencer marketing has made it easier for businesses to reach and engage with potential customers.
What are the benefits of D2C?
D2C is a great way to improve relationships with customers. For example, Direct-to-Consumer enables the business to personalize its service offerings and tap into consumer beliefs.
This often leads to higher spending and increased “stickiness” of the customer relationship.
In addition, D2C businesses have a lower cost structure; they don’t have to pay for retail markups or intermediaries. This can allow them to offer higher quality products at a lower price.
Finally, D2C businesses often have more control over their brand and the customer experience.
What are the challenges of D2C?
The biggest challenge to running a successful D2C program is not using a modern warehouse management system. This software is essential to controlling costs and ensuring a great experience across high volumes and fast-paced multichannel selling environments.
Businesses often rely on legacy or paper-based (ERP) inventory fulfillment processes that aren’t providing real-time visibility.
Retrofitting old or siloed systems to support the new D2C model causes many problems. As a result, businesses will experience:
- Higher shipping costs
- Human error
- Late, slow, or incorrect orders
- Higher labor costs
- Problems with non-compliance, as in international labeling regulations
- Greater stockouts and higher inventory carrying costs
Without modern solutions, businesses find it costly to pivot with market changes quickly. Older systems won’t integrate easily with third-party systems such as; drop ship partners, 3PLs, marketplaces, etc.
Changes usually require a long and expensive IT project, resulting in costly and delayed innovation, sales loss, and reduced profits.
D2C order fulfillment solutions
Modern warehouse management systems that are built to support D2C order fulfillment will deliver:
- real-time visibility into inventory and product syncing
- automated workflows for warehouses
- rich data analytics
- pre-built software integrations for third-party supply chain products
Warehouse management and order fulfillment solutions bring the speed, precision, customer insights, personalized services, and system-directed decision-making necessary to reap the full benefits of a Direct-to-Consumer business model.
Upgrading your business with D2C
D2C is a significant trend and is likely to continue to grow. There are challenges to the model, but the benefits of building a direct relationship, having a lower cost structure, and having more control over the customer experience are all major advantages for businesses.