Across every niche, the world of commerce is cut-throat and fast-moving. To get a leg up on the competition, most smaller players are quick to adopt new technologies and innovations. But large, global, multi-brand businesses must be more deliberate and thoughtful as they shed their siloed and inflexible organizational structures to become more modern, digital enterprises.
In the mad dash to digital, multi-brand businesses must keep an eye on the offline world, particularly since we’re entering an era in which offline commerce experiences and digital touchpoints are increasingly colliding. For multi-brand businesses to succeed in this evolving commerce terrain, they need flexible operational structures and technology strategies that enable them to quickly adapt to changing market conditions and consumer preferences. D2C commerce is paving them a path.
D2C commerce – straddling the physical and digital realms
The growing trend of D2C (direct to consumer) commerce is fanning the flames of the already fiercely competitive commerce landscape, where brand differentiation and consumer loyalty is no longer a nice-to-have but a necessity for survival. Importantly, brand differentiation must transcend offline and online channels to create a cohesive, satisfying omnichannel experience for all end consumers. Loyalty must be consistently recognized, regardless of where the consumer interacts.
Creating such omnichannel experiences requires businesses to diversify their commerce business models and GTM strategies. This is a particular challenge for multi-brand businesses that must manage the evolution of commerce for a plethora of brands, markets, channels, and audiences.
To overcome this challenge and create both offline and online experiences that set the stage for strong consumer-brand relationships, brands around the world are looking to transition to D2C commerce. With the D2C commerce business model, businesses deliver digitally-enabled, differentiating offerings directly to the end consumer via their own web or brick-and-mortar store, thus bypassing traditional distribution links. For businesses hesitant to transition to this model, they can rest assured that the D2C stampede is no fleeting trend: In 2022, D2C e-commerce sales in the US jumped by over 36% from 2020, per a report from Omnia Retail. The global picture is similar, with a 2022 survey revealing that 68% of multinational companies said they were significantly or moderately investing in D2C sales channels. Only 1% pledged no investment.
The upside of D2C
As consumers seek more convenience and flexibility in shopping experiences, the D2C model reveals itself as the best way for brands to meet end consumers’ needs and retain customers. By adopting a D2C strategy, businesses are free to create:
- More personalized customer experiences
- Tailor-made digitally-enabled services complementing core products
- Closer relationships with customers
- Richer data to improve operations and services
Getting Up Close and Personal
Crafting a memorable customer experience and building strong customer-brand relationships has never been more important. In fact, 88% of customers say that experience is as important as a company’s products or services, according to the Salesforce State of the Connected Customer 2022 Report.
And brands are paying attention.
As businesses prioritize the customer experience and their customer-brand relationships, they’re discovering how the D2C model adds new levels of personalization to the customer journey.
Importantly, D2C frees businesses from reliance on traditional distribution models, empowering them to take back ownership of the customer journey (and, consequently, their brand). With the middleman removed, businesses can directly interact with end consumers, collect data, and foster deeper customer-brand relationships.
Closing the gap between the end consumer and the brand further empowers businesses by giving them complete visibility into the different stages of the customer journey. This enables them to better understand exactly who their customers are and what they’re looking for. In turn, they can create strategies and innovate to provide customers with the more personalized products and services they seek.
For multi-brand businesses, the D2C model helps ensure all their individual brands can keep pace with customer expectations, both offline and online.
Leveraging data and consumer insights
The D2C model also supports businesses in integrating their offline and online strategies by unlocking new levels of consumer insights.
A D2C strategy enables businesses to collect relevant market information about consumers’ needs from a vast swath of data points. This is due in part to the fact that D2C commerce makes brands less reliant on retail giants like Amazon, allowing them to capture a larger share of the growing online marketplace and increase their touchpoints with end consumers.
Moreover, as businesses work across offline and online channels, they can collect real-time, customer-level data to analyze and complete other survey-based insights. For example, businesses can learn what consumers expect from brands’ experiences, services, delivery, etc., as well as what can change consumers’ minds or prevent them from making a purchase.
As businesses deploy new D2C strategies to differentiate their brands across diverse channels, they can leverage such data and insights to answer consumers’ needs directly, improve the customer experience, optimize value for consumers, and, ultimately, build brand loyalty .
Transition to D2C with a composable commerce solution
To unlock the full benefits of the D2C model, businesses must create a completely frictionless customer experience. This is a difficult transition for many, especially multi-brand businesses that must battle channel misalignment, where their individual brands have different marketing messages across different channels that are managed by different teams.
One path to D2C is through composable commerce. Each part of a composable commerce solution represents a core, reconfigurable digital ability. This enables businesses to build a completely personalized commerce solution and a unified IT landscape across multiple brands. It’s an approach that’s being tested by an increasing number of global organizations.
For instance, multi-brand FMCG enterprise Mars recently collaborated with global business transformation agency Valtech to create a composable commerce solution to support its D2C strategy. The solution gives Mars the ability to compose, manage, and scale desired digital capabilities as it seeks to differentiate customer experiences across all its brands and channels. With one unified system for its D2C commerce strategy, Mars has seen an incremental in-year revenue boost of 20%.
Mars isn’t alone. A Gartner study concluded that businesses that add an intelligent, composable approach to their tech stack could outpace the competition by 80% in the next year.
The bottom line
As commerce competition intensifies, dividing the offline and online worlds no longer makes sense for businesses that are prioritizing brand differentiation and omnichannel experiences. Instead, they should look to the D2C model to leverage new data and consumer insights, strengthen customer-brand relationships, create more personalized customer experiences, and position themselves for flexible, profitable growth.