What Benefits Direct to Customer (D2C) Business Model Offers to Brands
March 18, 2020In Direct to Consumer (D2C) business module, the seller is the one who directly sells and ships the product to the consumer, without any interference of a middleman.
This allows D2C companies to sell their products at a lower cost and enables them to have complete control over the manufacturing, marketing, and distribution of the product.
Unlike a traditional retail company, D2C companies have more flexibility over their marketing strategy as well as their product shipping. They can make use of multiple channels such as partnering with retailers, having their own pop-up shops, or building an e-commerce website.
Companies like Amazon, Casper, Harry’s, Dollar Shave Club, Soylent, The Honest Company, and many others have been thriving under the D2C business model and expanding their brand across the globe.
Let’s see some of the benefits of having a D2C Business model
- Launching your own product
Not so many years ago, retailers had to think about the shelf life of the product. This forced them to display their highest grossing items and keep a large stock of the same.
By doing this, they inevitably sold only a handful of products. The D2C companies have now picked up the same trend and are earning billions of dollars using the same trick.
Casper, one of the biggest mattress manufacturing companies in the world, came up with the bed-in-a-box concept back in 2014. It was based on the concept where the consumer did not have to go through the difficulty of choosing from multiple mattress options.
The goal of the company was:
- One model, no choice
- Affordable price
- Delivery at your doorstep
It was simple, there was only one Casper mattress and it was the best in the market. With this marketing trick, Casper made sales worth $1M in their first month and $100M within 2 years.
A similar formula was applied by Harry’s, an Americans having manufacturer and seller, which was built because the founder saw that there were unnecessary choices for razors. So he decided to build one great razor, which was affordable and delivered to the doorstep. The company made $170M in its first 2 years as they realized that consumers don’t really need a lot of choices always.
- Designing your own Marketing Strategy: Go Viral!
Without a middleman bickering, you can manipulate your marketing strategy according to your product.
The founders of Casper did not have just intend to sell mattresses, they wanted to establish a brand with a promise of a pleasant sleep at an affordable rate.
Thus, they established an image of an urban brand, by targeting the largest markets of NYC and LA by covering the subway stations with cheerful ads. Casper even got Hollywood stars, Instagram, and Twitter influencers to make their mattress the talk of the town. Soon, there were trending photos of their blue and white striped boxes all over the internet.
Harry’s created a different strategy, wherein they put people on the waitlist. The waitlisted people then received an offer wherein if they got their friends or family on-board, they would receive free prizes. With this strategy, within a few weeks of their launch, Harry’s had garnered over 100,000 people on their waitlist.
Bombas a sock company pitched its business by attaching a mission to it. They sold their products by marketing a good cause. They used the buy-one-get-one business model, wherein they donated the other pair of sock to the homeless shelter.
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- Building a Better Consumer Experience
The primary focus of a D2C company is the quality of their brand. With only a handful of products, the consumer expects consistency in the quality of the product and the overall experience of buying.
Casper was primarily built on this idea of making it easy to buy a mattress. Their bed-in-a-box concept helped the customers to buy what they wanted without a lot of hassle and at reduced shipping prices.
Casper also offered a free return policy, wherein within 100 days, if you don’t like the product you can return it free of cost.
Glasses just like mattresses are somewhat a dreadful experience for consumers. However, Warby Parker broke into the market by helping the consumers choose suitable eyewear from the comfort of their home. The company sent 5 pairs of glasses to new customers for them to try and decide. They also built features, wherein using a webcam you can choose a suitable pair of glasses. They made the experience ‘newer, better and faster’.
A Direct to Consumer business model offers a number of benefits in the marketplace. This business model helps you build a marketing strategy around the launch of your own product and allows you to get instant feedback on your product. The D2C business model helps save a lot of expenditure on inventory and ensures more sales than the usual retailer outlet. The consumer-business relationship needs to be maintained since most D2C businesses are now virtual, however, that’s where considerate policies play a major role.
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