Direct-to-Consumer E-Commerce Transition – Best Practices & Case Studies

Best Practices

Developing detailed consumer persona profiles and applying them to the content marketing efforts of the D2C ecommerce strategy is one best practice that manufacturers should employ when transitioning into the D2C segment. Another best practice is to carefully consider what the needs and priorities of the D2C operations will be and align the development of the ecommerce platform with these elements in mind, through careful and intentional planning. A deep dive of these findings has been presented below.

1. Developing a Detailed Consumer Persona Profile

  • Because the DTC model is customer-centric, companies transitioning to this model need to develop a detailed understanding of their customer base. In doing so, a customer persona emerges. Such a profile should include things like customer demographics, average order value, typical buying journey, social media habits, and product/shopping preferences. The persona profile is important because it helps to guide a company’s DTC strategies to be in alignment with their customers’ needs.
  • One area where personas are highly needed for DTC brands is with regard to content marketing. According to Claudine Bianchi, CMO of Crescendo, “Buyer personas help marketers ignite genuine conversation with [customers].” For D2C brands, these conversations are happening on social media. A survey of 1,100 consumers who had relationships with the top 50 D2C brands found that social media content is the most welcomed form of content from these brands, with other formats such as articles, ebooks, and video series following in the line. This illustrates that any brand transitioning to the DTC model will need to find ways to successfully “converse” with the consumer through content marketing, the creation of which is something the persona profile can guide effectively.
  • Nike is one of the most-cited examples of a formerly traditional manufacturer that has successfully entered the ecommerce D2C space, as evidenced by the wealth of media articles, executive interviews, and case studies available that detail the company’s ongoing transition. The company often relies on the use of consumer personas to guide their strategies, which is exemplified by this digital campaign case study and this UX case study. Another example is evidenced here: When Nike “dove into the numbers behind its NikePlus loyalty program and app, it found that loyalty app users spend 40% more than other customers. Nike saw an opportunity to increase sales by boosting NikePlus membership and set out in 2018 to triple the number of members over the next five years. Part of this strategy was to clearly define who it was targeting and according to this interview with the company’s chief digital officer, Adam Sussman, Nike identified three market segments”: The Weekend Runner, The Style Shopper, Dedicated Sneakerhead. Details about each of these personas can be viewed here.
  • This is a best practice that is ideal for D2C brands because developing personas because it enables the use of target marketing initiatives, which are a critical component of DTC ecommerce advertising. Target marketing is critical for DTC brands as, for example, these brands largely make use of social media marketing to draw traffic to their ecommerce site. Using Nike as an example once more, the value of this can be seen: According to SimilarWeb, Nike’s website receives over 295 million visitors each month, of this, 2.98% are coming to the site directly from social media. Although this may seem like a small percentage, it represents nearly 8.8 million visitors per month.

2. Careful & Intentional E-Commerce Planning

  • Content manager and ecommerce expert, Hannah Leary, of the Swanky Agency notes that an ecommerce store is the “cornerstone” of D2C operations. As such the development of the store should revolve around “serious commercial planning.” Design, technology, and UX are all important things to consider.
  • First and foremost, the ecommerce platform a brand chooses is very important, because there are so many options available in the market. Brands should consider their commercial priorities and choose one that most closely aligns with them. Leary advises that brands take their time with this process; research everything fully, compare and contrast options, and especially take time to fully consider things like reliability, scalability, flexibility and value.
  • Next, companies should tailor their D2C site with their end-users in mind. On one hand, the site should be designed to “inspire buying action”; on the other hand, the site also needs to be easy to navigate and come across as trustworthy. Some important things to consider in this vein are: brand representation, clean and simple design, mobile-friendliness, intuitive navigation, advanced search options, high-quality imagery, accurate product information, calls-to-action, and an easy and efficient checkout experience.
  • DRINKS is a marketing technology company that operates a B2B and DTC line of operations. The company’s DTC ecommerce site is called ‘Wine Insiders‘. Company CEO, Zac Brandenberg stated in an interview that the brand’s ecommerce site has been so successful, they have done millions of online transactions with over 1.5 million households. When asked if there are any specific companies the strategies have employed that have led to this success, Brandenberg notes: “We have a technology infrastructure architected from the ground up that enables us to conduct all the compliance, manage the product curation, do the segmentation that allows us to make specific inventory available in specific states and identify customers who are legally allowed to purchase that inventory. Some states regulate on a county level, others statewide level. There are dry counties. There are volume limits where consumers can only buy X amount. Then there are different taxes and sales tax, all of which are incorporated into our platform. That fundamental technology layer powers both our DTC business unit as well as our platform partnerships through our [Wine-as-a-Service] offering.” Based on this it is clear that Wine Insiders’ ecommerce platform is aligned with their business priorities and operational needs and has been designed to streamline these operations automatically. These elements were a part of the brand’s careful ecommerce planning strategy.
  • Part of the ecommerce strategy for manufacturers looking to enter the D2C space is to ensure there is a lot of content available on the website that provides easily accessible product information. “More than half of consumers opt to visit brand websites (rather than retailer websites) because they offer more comprehensive information and guides. […] [And] 78% of shoppers trust manufacturers when researching products — over social media, news sites and even experts.”
  • Another aspect of the ecommerce strategy for D2C manufacturers is to leverage their abilities and capabilities to provide customized and personalized products and services. Data shows that 62% of customers are willing to spend more money for a customized shopping experience, and 57% are highly influenced by personalized experiences.

Case Studies

Compac Industries and Anheuser-Busch InBev are 2 manufacturers that have successfully incorporated a digital direct-to-consumer (DTC) e-commerce model to their business models. Compac Industries is an American-based company, while AB InBev is a Belgium beer manufacturer with a global presence, including the United States. Its DTC model has also shown impressive past and anticipated growth in its US market and research was able to identify an article on how AB InBev successfully set up a DTC channel in neighboring Mexico.

Compac Industries

  • Compac Industries is a Georgia-based consumer products manufacturer that deals in skin care, oral, home, and baby products.
  • In an interview, Compac’s CEO Dean-Paul Hart remarks that Compac’s business before was “all B2B“. The initial website, set up 10 years ago, catered strictly to businesses, but recently began selling DTC through 6 websites and several marketplaces, including Amazon.
  • Hart reports that the company then set up its own DTC website on the NetSuite platform provided by Oracle to facilitate easier integration with Compac’s existing systems. Hart also narrates that his company uses ChannelAdvisor to “syndicate its data” from all DTC avenues.
  • According to Hart, a few challenges the company faced in setting up DTC channels included developing traffic and content, growing its marketing efforts, as well as learning to advertise online. The company surmounted these challenges as Hart reports, “DTC has enabled us to connect with our customers more authentically. We’ve started to dig deeper into these experiences one brand at a time”.
  • According to the CEO, DTC has helped the company drummed up significant revenues. He reports that after introducing DTC, the company is processing anywhere between 8,000 to 10,000 orders a month, compared to 1,000-1,200 a year ago. This has helped the company cushion the decline in B2B sales brought on by the COVID-19 pandemic.
  • Additionally, Hart reports that DTC has also helped its B2B business. In his words, “We’re finding that as we do better marketing and selling DTC, our retailers do better because people tend to remember our brands more when shopping in-store”.

Anhueser-Busch InBev

  • Digiday estimates that sales attributed to AB InBev’s DTC channels stand at approximately $1 billion. AB InBev CEO Carlos Brito notes that the company has “relocated resources” to grow e-commerce channels.
  • Further, the company reports that it has established “DTC connections” with a full 250 million consumers annually. This, Brito posits, is growing at double-digit rates.
  • In 2016, AB InBev reported that its DTC channels contributed to about 8% of its e-commerce sales in the United States alone. In 2020, this figure is expected to reach 13% and sales to reach $696 million.
  • While research was unable to find any recent information on how AB InBev set up its DTC channel stateside, its operations in Mexico set up DTC channels in response to COVID-19 successfully. AB InBev helped Modelorama, a convenience store chain, set up websites and apps to organize for DTC sales, as well as set up local delivery systems using bikes. In three months, over 500,000 customers had signed up for the service.
  • The move to DTC in Mexico also dictated a shift in production methods. According to Bernado Santana, VP of retail sales, the company has begun producing larger packs of beer as they sell better online. He explains, “We are focused on guaranteeing a supply of large packs to our Modeloramas. During economic downturns, sales move to more affordable options, such as buying in bulk”.
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