The retail landscape seems to be going through something of an existential crisis.
Everywhere you turn, you’re faced with news of doom and gloom for retail and the high-street. From the retailers struggling under mounting pressure to the stores folding under the strain, the future looks bleak for retailers who aren’t willing to move with the times.
But there is hope: A model breaking into the mainstream (with the likes for Dollar Shave Club and Under Armour leading the way) is direct-to-consumer or DTC.
For those unfamiliar with the term, a DTC business owns every part of their retail operation – from pre-purchase & sales to manufacturing & delivery to post-purchase & customer service.
Our partners Brightpearl has taken notice of the DTC model, releasing their report ‘Fast & Frictionless: The new reality for DTC brands’, in partnership with conversion rate optimisation specialists, Endless Gain, which you can download here, in which they state that:
“The direct-to-consumer model enables brands to control the entire end-to-end journey that a consumer experiences while interacting with the business”
In the hugely insightful and in-depth report, you can learn more about
- Consumer attitudes and expectations about the DTC model
- Expert analysis on why brands should embrace the DTC model
- Insight on the challenges of implementing a DTC model (and how brands can begin to overcome those challenges).
Why are retailers turning to the DTC model?
It is becoming increasingly difficult for brands to join the playing field in the ever-more-competitive world of eCommerce and retail, especially against distribution giants like Amazon.
By taking ownership of every aspect of the supply chain, smaller retailers are able to not only have direct control over aspects like manufacturing and pricing but also over the entire customer journey.
This allows brands to build much stronger relationships with customers by building trust and loyalty. Owning the entire journey allows retailers to offer convenient payment & delivery options and completely joined-up customer support, as well as enabling them to use extensive customer data to tweak their offering and delight consumers from start to finish.
What are the challenges of the DTC model?
The flip side to delighting your customers is, of course, that customer expectations are shifting.
While this needn’t be a problem per se, keeping up with the demand for a wide selection of always-in-stock products, 24/7 shopping with same-day or next-day out-of-hours delivery, and no-questions-asked returns can, without a doubt, be a challenge.
In order to grasp the opportunities that come with deploying a DTC model (like greater control over the supply chain and a closer relationship with customers), brands and retailers need to run a tight ship.
The risk of disappointing and alienating customers is high. Brands must fully embrace the ‘fast and frictionless’ philosophy throughout buying journey. Owning the entire supply chain gives you the opportunity to reduce friction at every customer interaction – and only brands who act quickly to implement the speed and ease-of-use associated with the DTC model will be the winners.
Delivery Management for DTC
The direct-to-consumer or DTC model enables brands & retailers to owns every part of their retail cycle – including their deliveries.
In fact, the report identified delivery as one of the major areas of potential friction. Today’s consumers demand fast, flexible and convenient delivery, and in order to fulfil the customer-centric promise of the DTC model, implementing systems for smooth delivery management is essential.
Ensuring your delivery operation matches the website, ordering, inventory management, multi / omni-channel experience retailers are working so hard to make frictionless is difficult enough when you use carriers, but what happens when you want to replicate the model, but have your own delivery fleet to fulfil orders?
On one hand, by managing deliveries and logistics in your own vehicles, you’re able to take control over another key aspect of the customer journey.
On the other, that very control and drive to make the whole process frictionless (and fast) can be even more difficult.
A customers actual delivery experience is just as important as the rest of the experience they have with your brand.
As the last point of contact, one could argue that this particular experience is even more important.
Using software to achieve Direct-To-Consumer for own fleet retailers
By using a delivery software application like Stream, retailers looking to operate a frictionless (and efficient) DTC model can do so more efficiently and more effectively by managing orders, drivers and vehicles to deliver an exceptional customer (and brand) experience.
Stream enables retailers to control and optimise vehicle utilisation and delivery routes (speeding up deliveries), track drivers and goods in real-time through the mobile App (giving you complete control and a smoother service) and automate communication with customers -ultimately improving customer service and giving you the fast and frictionless delivery you need to compete in the direct-to-consumer landscape.