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Navigating the challenges of the D2C model
Operational complexity A direct-to-consumer model is not just about selling products directly to consumers , it ’ s about understanding how these changes will impact the operations of the organization . This means that the changes will reflect the complexity of dealing directly with customers , something that distributors and retailers in the traditional model usually take care of .
Customer service Direct interactions with customers involve the much higher expectation of delivering an experience to the consumer . This is an experience that retailers are aware of , but most manufacturers don ’ t have visibility into how to provide . This goes beyond a personal experience to also ensuring the presence of the brand in its associated market .
Marketing approach Companies are used to setting up marketing campaigns for their products and to enhancing brand recognition . In this case , it ’ s not about changing their campaigns but about letting customers know about the new ways they can access the products they know and love . Basically , they are evolving into making the brand more accessible .
Digital platform Having a robust e-commerce platform will be paramount . In most cases , customers will expect to be able to access the brand ’ s website and place orders directly with the manufacturer . Companies that use existing technologies to ease this type of operation will fare better than the ones that limit access to their products to physical stores .
Supply chain challenges It is estimated that currently more than 50 percent of all manufacturing supply chains can deliver directly to consumers . This should not be a surprise . With the way Amazon has impacted consumers ’ expectations to access products within two days , more and more manufacturers embracing the D2C model recognize that being able to support that demand is very different to what they were used to in a traditional model .
Legal landmines Selling directly to consumers opens a new arena in the legal sense . Having awareness of regulations that place a burden on the manufacturer to meet these laws can signify an additional cost they were not used to dealing with .
Benefits of shifting to a D2C model
Improved customer insights This is one of the best outcomes of a D2C model . Visibility into what the consumer base prefers or wants can be a goldmine of information that can be used to improve all the tracks within the organization from production and pricing to marketing , delivery , and new product development .
Increased brand awareness control One industry that has embraced the D2C model is wine and spirits . More and more wine producers will enable consumers to access the most premium brands within their portfolio through digital channels . This has allowed them to better control their premium brands while still working with distributors and retailers for their more common products and brands .
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