The term D2C is currently the subject of much discussion among manufacturers, especially in the context of e-commerce. This refers to the web store activities currently being initiated in many places by manufacturers who previously sold in multiple channels and are now establishing a direct sales channel to the customer.
However, we recommend a broader understanding of this term, which extends to all of the manufacturer’s marketing and sales activities. It is critical for manufacturers to holistically relate their D2C strategy to their entire omnichannel activities. Of course, this includes the customer journeys that building a manufacturer’s web store can initially cover, specifically for product selection and the purchase and transaction process. But the spectrum of value for their customers that manufacturers can cover through their D2C activities is much broader: no one, not even a specialized retailer, can provide such comprehensive information and advice on their own products as the manufacturer. In addition no one can communicate the company’s philosophy and values or the correct use of the products as the producer. All these possibilities enable the manufacturer to support the customer at all moments of the customer lifetime cycle. This support can best be provided in direct contact with the customer – and that is exactly what D2C is all about, direct contact with the customer. That’s why it’s conclusive to build D2C strategies holistically around all of the customer’s needs.
“No one, not even a retailer, can provide such comprehensive information and advice on their own products as the manufacturer. No one can communicate the company’s philosophy and values as well. No one knows as much about the proper use of the products. All these possibilities enable the manufacturer to support the customer at all moments of the customer lifetime cycle.”
This also indicates that many manufacturers are already active on many D2C levels, for example via their websites, apps, newsletters and social media channels. The retailer is often only left to handle the purchase and transaction. The D2C web stores that are currently frequently set up by manufacturers are therefore often not actually the start of a D2C strategy, but merely the addition of the option to buy directly from the manufacturer.
Despite this, such a webshop can be a strong catalyst for the further development and added value of manufacturers’ D2C strategies. The main reason for this is the increased importance of the customer account, which was also offered by many manufacturers before or without the launch of their own webshop, but is now becoming essential for order processing. The web store will lead to a larger number of customer accounts being opened and to the data and information about the customer available there being enriched – for example, by the products in their possession. Better knowledge about the customer can in turn be used for better dialog with the customer, for example through personalized communication or even through individual offers and prices based on customer value.
Hence, it can also be deduced what D2C strategies of manufacturers should actually be about:
The ambition of manufacturers to initiate, develop, monetize, and sustain long-term, valuable, and loyal relationships with their leads and customers – e.g., through support in the event of problems.
Three mutually related reasons are crucial for customer centricity to play a key role in successful D2C strategies:
- Increased customer expectations of the manufacturer’s omnichannel experience
- Increased internal expectations of the manufacturer regarding the success of the D2C activities and thus overall regarding its own omnichannel marketing
- Increased complexity and budgets required for implementation
The overarching conclusion is: The potential for success is increasing, but at the same time the risk of failure is also rising – and the question of what needs to be done for success is becoming more open. Of course, the answer must start with the customer – the “user”.
Let’s take a closer look at the reasons mentioned above.
One question in particular is becoming more important and more complex: What are the right strategic decisions? What is the right thing to do and then how is it done correctly? This process must start with the potential or existing customer: What are their specific requirements of the manufacturer, what are their Pains & Gains, and what solutions have to be developed to meet them? Answering these questions correctly becomes the measure of success, because a strategy can make much sense for the manufacturer – but if it does not serve the needs of its customers, it will fail.
When applied correctly, these insights can not only be a selective aid in the initial setting of goals and requirements, but can also act as directional guide lines for overarching omnichannel programs.
This requires a series of steps, such as filtering out the most important customer requirements to be prioritized, overlaying the customer problems with the commercial value (“business value”) for the company, and deriving a synergetic, coherent structure for the necessary operational and technical infrastructure.
By building such Customer Centricity Management, manufacturers can strategically plan and implement the development of their omnichannel D2C activities to achieve an optimal value proposition in the market with a successful long-term business case.