B2B brands can benefit from opening D2C (direct-to-consumer) channels. A commitment to creating engaging experiences requires careful planning, a solid understanding of customers’ needs, and good data.
If this past year has taught us anything about the retail industry, it’s that eCommerce strategies and channels are constantly evolving to meet the needs of customers. As an example, the D2C model appears to belong exclusively to B2C companies.
Nevertheless, it can assist B2B brands in finding new revenue streams, developing new customer segments, and enhancing customer loyalty. D2C interactions can also provide data for B2B companies to improve their products, develop new ones, and create more immersive and personalized customer experiences when customers grant permission. As a result of D2C, B2B companies have greater control over their branding, messaging, and ownership of customer relationships.
There has been an increase in D2C sales in recent years, with an estimated $18 billion in U.S. sales. Because of their own D2C experiences, many business buyers desire the convenience and efficiency of D2C in the B2B environment. At the same time, B2B e-commerce is growing as well.
How Does the D2C Model Benefit B2B Brands?
It is possible for B2B brands to reach new customers by using a D2C approach. In order to be successful, you must be able to think creatively and formulate clear strategies. Before the pandemic, fitness equipment manufacturers relied on commercial gyms, schools and universities, and apartments and hotels for their revenue and needed to expand into the consumer market to meet rising demand.
Several of them have adopted Direct-to-Consumer (D2C) models in which they sell new and reconditioned fitness equipment directly to consumers. In addition, they offer subscriptions to on-demand fitness classes for customers to use with their equipment. Subscriptions generate a steady revenue stream and allow for continuous customer engagement, thereby strengthening the relationship between the brand and the customer.
A D2C channel can also be used to strengthen a B2B brand’s relationship with existing business customers by engaging them in their preferred method – whether through product demo videos, streaming content, or other online experiences. Due to the generational shift among business buyers, this capability is becoming increasingly important.
What Can B2B Businesses Do to Adopt the D2C Model?
The first step to a successful D2C implementation is evaluating your customer base. Ask yourself the following questions regarding each segment based on the segmentation you have already completed:
- How would your D2C billing and subscription process work?
- How often do they purchase what they are currently purchasing?
- In the last year or so, how have your current business customers had to pivot?
- How can you engage these customers with your brand through content? Would your customers be interested in product demonstrations, on-demand courses, or something else?
- Is there anything that your brand does not currently provide that they need?
Additionally, you may be able to identify consumer segments that you can directly reach. As a result, you will also need to ask the following questions:
- In what ways do consumers prefer to purchase this type of product?
- How can our brand meet the needs of these consumers?
- To reach these customers, what type of merchandise, content, and SEO is required?
- How are we different from existing consumer products in the same category?
At the beginning of the pandemic, dental and orthodontic practices drastically reduced their product orders to one dental supply manufacturer. The manufacturers’ customers were not seeing patients or were seeing fewer than usual, so their demand for consumable supplies decreased.
It was decided by the manufacturer to sell its teeth-whitening trays directly to consumers after reviewing its products and potential consumer segments. There was a strong demand for cosmetic services as people put off cosmetic appointments and sought ways to maintain their appearance at home.
Questions to Ask
As the brand plans its direct-to-consumer channel, it has to address the following questions:
- What is the best way to price our direct-to-consumer products while maintaining our distribution channel?
- In order to reach our D2C target customers, what digital advertising, television, and radio campaigns will we run?
- Where should we focus our D2C efforts, a branded commerce site, a marketplace, or social media? Are there any additional risks associated with not addressing all channels?
- What business and technical capabilities do we offer our customers through our direct-to-consumer channel? Examples include shipping types, payment methods, customer service channels, returns, account features, and personalization.
- Which countries should we start with, and what is the best way to ship to their customers?
- Are there any adjustments we need to make to our production lines, production schedule, and packaging in order to accommodate consumer quantities, branding, and labeling requirements?
- Are there any eCommerce platform resources we need in order to connect with consumers, such as product information pages, content, SEO, and the ability to sell in multiple languages and accept multiple currencies?
When all of these elements are considered, the manufacturer is in a position to launch a direct-to-consumer (D2C) channel in order to generate revenue and expand its customer base during a difficult economic environment.
Conclusion
The development of a direct-to-consumer channel requires careful planning, a clear understanding of customer needs, accurate data, and a commitment to creating engaging customer experiences. For B2B brands, D2C can be an increasingly valuable investment as the model gains popularity and more business buyers expect automated, curated purchasing experiences.
