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    Direct To Consumer (D2C)

    What is Direct-to-Consumer (D2C)

    For decades, retailers and wholesalers were middlemen between consumers and manufacturers. The d2c model would follow a routine whereby items were purchased in bulk from makers at set prices and sold to consumers at higher prices, often doubling or even trebling the output. These manufacturers to retailer to consumer examples abound. D2C business model is undergoing a change now, as new and innovative ways of getting products to the customer have emerged because of d2c consulting services. Technologies and strategic knowledge are changing the way manufacturers approach the retail process, as retail strategy consulting gains ground. Wholesalers and distributors used to provide the infrastructure, space and manpower manufacturers needed to depend on. With the rise of new technologies, the internet and businesses leveraging the websites, this business model is rapidly evolving. Manufacturers & major distributors are entering the retail process, selling directly to consumers.

     
     

    Benefits of D2C Model

    In earlier business models, manufacturers earned fewer profits as direct sales were the only options. With the internet and technology offering a way to connect consumers directly with manufacturers, this is changing. Companies earlier sought wholesalers to be viewed as legitimate companies. But now, as customers seek to meet specific requirements, companies are selling services and products online, offering bespoke solutions that meet the needs of demanding clients. A manufacturer now has the option to opt for direct retail channels. Customers and clients alike are end users who benefit from the direct to retail route taken.

    There are a lot of other benefits of taking the d2c route for consumers and manufacturers. Here are the key advantages of going for this innovative retail strategy:

    Time to Market is Reduced

    Time to market significantly decreases. Rather than a long traditional retail sales cycle requiring locked in product development in advance of orders and deliveries, individual brands can prototype, test and move to market fast. This holds immense value as agility is the competitive differentiator to modern industries.

    Complete Brand Control

    Additionally, there is a complete brand control. Brand images are not subjected to dilution or distortion by third parties. Consumers seek powerful brands they can interact with directly. Customers or clients in the corporate ecosystem thrive on brands that build the right perception.

    Price Control

    Along with control over brand perception, manufacturers can control the prices as well. Directly routing the products or services to end users leads to direct communication with customers or clients regarding price points. Selling directly allows the accumulation of a data mine. Better customer data leads to effective promotional strategies, more customized products, higher sales, and better brand associations.

    Assessing and Mitigation of Risks

    Along with the emergence of e-commerce as a catalyst for accelerating strategic change, manufacturing to retail also leads to effective risk mitigation associated with direct selling to customers.

    Transparency is the reason why D2C is the right path to take, whether you’re an established brand or one just starting out. This also makes it easy to solve the issue of customer satisfaction. By directly interacting with the end user, this offers incredible value for the manufacturer or company, when it comes to providing exclusive products to retail wholesale channels.

    Manufacturers selling directly need to have an understanding of customer expectations and retail sales. Manufacturers that step into the direct market need to work on their brand. Shipping and customer infrastructure must be in place as well. Incorporating features such as chat and click enable corporate brands to connect and listen as well as interact with customers and clients.

    Better Margins

    D2C model offers real-time visibility as one comes closer to consumers. Along with quantitative demand for products, there is a greater insight into the quality of customer interactions. By interacting with customers and engaging in communication, it becomes clear what the customer wants. Products or services by B2B or B2C companies can be tailored to the client’s needs, therefore.

    D2C offers total control over the business, right from the beginning of the supply chain to the consumer. Unique comprehension of customer requirements emerges from taking this retail route. The Direct to Consumer process highlights how to go beyond focus groups and market research. Direct contact with the customer through every stage of sales ensures your customers are in direct communication with you.

    Faster Product Launches

    A reason why legacy brands need to embrace this innovation is the faster speed to market and more rapid product launches.

    With D2C model, corporate brands can even mitigate risk by launching innovative products on smaller scales. Manufacturers develop specific products, test it with demographics and then achieve feedback. This enables firms to understand how to make the required adjustments.

    Increased Control over Market Reputation

    In traditional manufacturer-retailer-distributor cycles, manufacturers can only control their marketing and packaging. Once the product hits the shelves, it’s all about retail prowess.

    Though large brands can advertise, the sales process rests in the hands of the retailer who may offer other alternative brands and detract from customer loyalty. In today’s hyper-competitive e-commerce world, customers need a quality product and a perfect experience.

    Controlling the customer experience from start to finish is more appealing than trusting retail partners and distributors. Brands are able to control the experience right from the point the customer makes the engagement to the point where the product is purchased.

    Omnichannel Commerce

    Another strength of Direct to Retail is the reliance on omnichannel platforms. This assures customers experience an integrated retail session, where they can browse across various channels, choose a wide range of delivery options and return in the ways irrespective of which channel brought the products in.

     
     

    Reaching End Consumers

    Direct-to-consumer (D2C) offers a new way for manufacturers to reach end users, whether the route is taken by e-commerce, brick, and mortar or click and mortar platforms. Once your brand is ready to take D2C route, you can pick or choose the sales channels, wherein customers or end users can interact directly with your brand.

    Long established retail or distributor networks cannot match the efficacy and ease with which manufacturers can reach customers or end users directly.

     
     

    Advantages to Dealers and Distributors?

    One of the factors deterring legacy brands taking D2C or Direct-to-Retail route is the impact on current retail relations. But the manufacturer versus the distributor vs the retailer comparison is not required, because this form of retail expansion is a win-win outcome for distributors and retail channels as well. A B2C or B2B company that has gained a foothold with retailers and secured shelf space which assures domination in the markets can easily establish distribution channel partnerships. There’s no need for risking market positions or alienating retail partners.

    But, thanks to franchises and retail distribution channels, the very opposite effect takes place. A Forrester Research study has confirmed over 54 percent of manufacturers selling directly to consumers have seen growth via channel partners. Redirecting the end user to retail partners for order fulfillment ensures manufacturers don’t lose out on profitable retail partnerships.

    The research also revealed 50% of manufacturers indicated sales helped to improve brand awareness and boost sales and lead for channel partners. A further 14 percent of manufacturers reported D2C strategy enabled easier testing of new, innovative products before these were pitched to the market.

     
     

    Case Studies

    As more consumers turn online to research and fulfill buying decision, brands need to embrace customer preferences and innovate models. Manufacturers ahead of the curve sell directly on websites and through marketplaces.

    Top players like Nike and Tesla Motors are choosing to go direct. D2C business management consultants like Your Retail Coach (YRC) has worked with a number of leading corporate brands to facilitate the direct-to-consumer process.

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    We work only for Visionaries.

    PROCESS AUTOMATION

    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

    VIDEOGRAPHY & PHOTOGRAPHY

    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)

    DIGITAL MARKETING

    Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

    These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

    IT INTEGRATION

    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

    WAREHOUSE & LOGISTICS PLANNING

    • How many cities or countries you wish to sell in?
    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
    • How should the goods be stored and barcoded?
    • How much space do I require for warehouse?
    • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

     

    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

    UI & UX DESIGNING

    This Step involves 03 distinct parts:

    Part 1: Choosing the right Platform:

    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

    “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

    UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

    SAMPLING & PRODUCTION

    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.

    PRODUCT DESIGNING / SOURCING

    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

    These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

    BRANDING

    Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

    Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

    It is an integral part to attract the target audience.

    ORGANOGRAMS & SOP’s

    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

    CRITICAL PATHWAY

    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

    BUSINESS STRATEGY & BUSINESS PLAN

    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

    MARKET RESEARCH

    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.