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Kevin Murray, Managing Director at Greenlight Commerce offers his advice to D2C retailers.
As we witness the closures of high street stores and the changing dynamics of consumer behaviours, innovative brands who understand the changing industry, are realising that they are having to extend their digital presence to offer consumers a more personalised, seamless buying experience both in store and offline.
Driven by this adoption of online shopping and the shift in consumer demands, brands are increasingly looking to cut out the middleman and go direct-to-consumer by opening their own ecommerce offerings. In fact, a recent survey has found that 40% of consumers say that nearly half of their spending will go to D2C brands in the next five years.
There are several reasons behind the rise in D2C commerce, including ownership of the customer interaction and experience, learning about the behaviour of the customer through online channels and collecting customer data.
These grounds facilitate the chance for D2C retailers to quickly adapt and tailor their strategy to their customers. With consumer habits constantly evolving, shoppers are becoming increasingly invested in brands who can deliver a faster and more personalised shopping experience – and the D2C model enables retailers to do exactly that.
However, for D2C brands to fully reap the advantages of their offerings, decision makers need to ensure they have an ecommerce platform in place that can adapt to the evolving needs of consumers.
Customer experience as a focal point
This year, customer experience is expected to overtake both price and product as a brand differentiator with a recent survey finding that 86% of consumers are willing to pay more for a product if the brand is able to deliver an excellent customer experience.
In an attempt to keep up with evolving customer needs and expectations, D2C retailers are narrowing the gap between online and offline user experiences. Online sales are increasing while in-store sales diminish at a growing rate.
According to research by GlobalData, half of the UK’s consumers are now purchasing online. The increasing number of online
customers suggests that this is the preferred shopping channel. As such, it is imperative retailers adapt their offering to provide the best digital experience.
However, many D2C retailers are struggling to adjust to the changing face of retail in the age of digitalisation. According to a recent study jointly commissioned by Greenlight Commerce and BigCommerce, the majority of respondents (98%) are facing challenges when it comes to their ecommerce platform. The most common problems cited are customer retention (42%) and customer experience (34%). As a result, almost half (47%) of D2C ecommerce decision makers believe these challenges are leaving them lagging behind the competition.
Cost of missing metrics
The survey further discovered that in 2019, poor ecommerce planning and execution resulted in D2C retailers wasting £174k in 2019 and this problem is only expected to get worse. D2C operators expect to waste a total of £304k on failed ecommerce projects in 2020 which suggests that lessons are not being learnt.
A number of D2C organisations are failing to measure key metrics when it comes to their ecommerce offering. Three quarters of respondents are not measuring abandoned carts, 74% are failing to measure the return on investment of a project, and 71% do not evaluate site loading times. Yet these are necessary requirements for any D2C brand.
If D2C retailers are not measuring basic KPIs or collecting customer data, they won’t have the capacity to tailor personalised shopping experiences based on their previous activity. Senior executives within the D2C space must ensure projects are properly planned, executed and the right KPIs are measured. Selling directly gives D2C brands the opportunity to connect with their customers, forming a two-way conversation that inevitably boosts sales.
However, brands need to start making investments that are going to provide a superior customer experience and ultimately enhance the bottom line. To do this, retailers must ensure a measured and diligent approach is taken, ensuring projects are planned, implemented and measured in accordance to their loyal customers’ needs.
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