9 June 2020
The huge – and probably permanent – shift towards digital brought about by the Corona measures has resulted in a surge in e-commerce sales across categories. Businesses had to act fast to adapt to new customer preferences in order to recover their revenues. For example, PepsiCo quickly pivoted to a “direct-to-consumer”-business model by setting up two webshops for their U.S. snacks business within 30 days. Clearly, there is a big advantage for businesses that already have access to the digital technology and resources to launch such a platform. But even if that’s not the case, we would like to share why you should start thinking about going direct-to-consumer (D2C) – especially now.
Value is migrating to who owns the end-user relationship and data
Owning the end-user relationship and data can result in a fundamental profitability advantage through higher margins and better-tailored products and services. SparkOptimus has supported leading businesses in designing, building, and further accelerating D2C propositions. In these – usually longer-term – engagements we work shoulder-to-shoulder with our clients, empowering them with the right skills and tools to further accelerate.
For HEINEKEN, we jointly designed and launched their Beerwulf D2C proposition within nine months. To do so, we used a three-step approach:
- Establish the core team and select strategic partners
- Build a flexible technology platform
- Prepare for launch through rolling out a marketing- and operations plan
Read the full Heineken’s Beerwulf case here
For Jacobs Douwe Egberts (JDE), we jointly accelerated their D2C strategy in a one-year journey to:
- Identify immediate quick wins and structural proposition improvements
- Develop a turnaround plan and new way-of-working to set the business up for growth
- Roll out the plan, with as an example, a new brand webshop in 10+ markets that accompanied a companywide new product launch
Read the full JDE case here
Our four tips to start boosting D2C sales today
Imaginably, the current Corona-crisis shifted your business’s priorities. Although it remains important to take time to establish a longer-term vision on D2C to ensure all initiatives come together as a whole, there are ways to start benefiting from incremental sales through D2C in the short term. We have four tips to get you started:
- Build engagement
In case of limited online infrastructure, try to think of creative ways to establish a connection with end-users. Social media like Facebook Marketplace or WhatsApp offer easy ways to engage and investigate what consumers need. Additionally, social channels tend to aid word-of-mouth and help you build a community of ambassadors, that you can leverage when maturing digitally. Ensure that end-users stay connected to you for the long term, for example by piloting home delivery or online consults, or giving out vouchers.
- Advertise smartly
Leveraging (basic) online listings (on a proprietary platform or marketplace) enables you to benefit from smart advertising strategies in these times. Online advertising has taken a big hit due to cost cutting. Lower demand lowers the price per advertisement, potentially opening up new advertising channels that you would normally not use. Another strategy is adding your listings to consumer-friendly comparison platforms to generate traffic. Google Shopping even announced free listings to support businesses in attracting traffic without having to pay advertising costs.
- Sell through e-tailers
Starting or expanding sales through e-tailers like Amazon or Bol.com results in direct access to end-users without the necessity of a proprietary D2C infrastructure. However, you should carefully consider the strategic route you want to take in e-tailer collaboration. Decisions on in- or outsourcing fulfillment, price setting, and content creation will significantly affect your business case. As an example, Amazon halted their “Fulfillment by Amazon (FBA)” operations for non-essential products to compensate for increased demand due to COVID-19. This left “non-essential sellers” without business.
- Create partnerships
Partnering up with other players in the value chain, or even competitors, can decrease the financial and operational burden of launching a D2C channel. Are there creative ways for you to leverage the logistical operations of retailers for your products? Can you collaborate with competitors to launch an MVP digital platform, splitting the required resources and investments, and creating cross-promotions? Engage all relevant parties in this thought process from the beginning to develop a viable set-up as soon as possible.
We are here to help
For a decade, SparkOptimus has supported her clients to achieve concrete results in areas that are now more relevant than ever. This has resulted in our fourth #1 position in digital consultancy in the Netherlands. Especially in these days of turmoil, we are determined to help you navigate current- and post-Corona times, setting up your (online) business for success. Feel free to reach out, we are here to help.
This article is part of our series “Accelerating digitization & organization in times of Corona”. Also read:
- Article 1: “Why your ‘future’ online B2B platform is needed now: How to start, scale, and not miss out”
- Article 2: “How to virtualize your (B2B) sales engine to keep your salesforce working effectively from home”
- Article 3: “How the COVID-19 outbreak incubates disruptive thinking – three levels to design the future of your business”
- Article 5: “How to transform your organization for digital success in these times – leveraging the momentum of drastically changing routines“