What Is D2C Marketing?

Businesses use d2C marketing to improve customer relationships and tailor their marketing strategies to their consumers. D2C marketing connects customers to manufacturers directly, allowing them to purchase directly from the source of the product. Understanding D2C marketing can help you implement direct purchasing in your business and leverage the benefits of this type of marketing. 

D2C marketing, or direct-to-consumer marketing, is a marketing strategy that allows customers to make a purchase directly from the business who sells the product or directly from the manufacturer without having to go through a retailer. The consumer can purchase directly from the business's website and they can ship the item from an internal warehouse. This gives the company complete creative freedom on the packaging, design, logo, and branding of the item as they complete the shipping themselves. 

D2C draws millennials as it primarily take place online. This generation of consumers has the highest rates of internet fluency and prefers to complete tasks and transactions online. E-commerce platforms are frequently more cost-effective and streamlined, as they can remove the costs of having to use a retailer and having to ship items from multiple locations. 

D2C marketing allows businesses to have more creativity with packaging and their processes. For example, as millennials value environmentally conscious brands, D2C marketing can allow a company to choose eco-conscious packaging and shipping methods. If using an external retailer, the company may have not had leverage in choosing the type of shipping materials. The millennial demographic values brand transparency and they factor the values of a company into their purchasing behaviour. D2C marketing can help businesses communicate their values as social media pages often accompany online stores, in which they can share additional information. 

Consider the following benefits of using a D2C marketing strategy:

Production management 

A company that uses D2C marketing has complete control of their manufacturing process. They can directly oversee all aspects of a production and sales process. As a result, they can enforce company policies, standards, and branding of all aspects of their production, leading to a more cohesive business structure. 

Increased revenue

By removing a retailer from the distribution channel, the original seller of the product can save the percentage that would be allocated to the retailer. This results in a higher annual income for the business in which they can invest in their marketing. Through this strategy, many businesses find themselves with higher annual income than if they were using a retailer. 

Better customer management

When a customer makes purchases on a company's website, its marketing team can collect more important data about their demographics and buying habits. This information is valuable to marketing teams when understanding how to target their consumers. Customers also have a direct line of communication with the business manufacturing their goods, allowing for faster order processing, cancellations, and changes. 

Personalization

Having greater control of the manufacturing process can allow businesses to offer more personalized products. They can offer modifications and customizations directly to the customer, as they can change production. Businesses also have greater creative freedom in their packaging and manufacturing processes, allowing them to customize packaging to their branding and image. 

Here are some issues that D2C marketing might have:

Supply vs. demand

D2C marketing often requires a business to hold an inventory of their products. This involves the business of finding the correct balance between amount of inventory and amount of goods purchased. Having too low an inventory can cause products selling out quickly, while having too much inventory can cause business capital being held in inventory. Businesses need correct forecasting to establish how much inventory to have on hand. 

Production responsibility

A D2C company requires more departments for varied production-related tasks, meaning it may require more labor costs and a reduced budget for individual endeavours. When businesses oversee production of their products, they also absorb the risks and responsibilities associated with them. When delays and downtime occur, the bottom line of the business can be directly affected.

Competitive markets

As many modern companies now use a D2C strategy to increase revenue, a new business may have more competition within a particular market. Businesses can learn from their competitors on what works for D2C marketing and what doesn’t. Businesses can also have a more difficult time getting their products noticed, as they have to compete with others for consumer attention. 

Subscriber retention

Many D2C companies use subscription services in the marketing models. While effective at gaining new customer interest, many consumers require a free trial of the subscription before purchasing. Free trails can delay the purchasing decision and it's difficult to forecast it will convert how many trial users into fully subscribed users. 

Here are some tips for using a D2C marketing strategy:

Create a subscription service

Consider establishing a membership service that offers discounts and early access to new products or services. It may be helpful to offer a community forum as well that allows subscribers to discuss a company's merchandise, bond with each other and ask sales representatives questions directly. Customers often appreciate a company that offers an opportunity to socialize, which may cause them to buy more products and services in the future. You can also offer more benefits to long-term subscribers to inspire positive emotions about a company and its brand.

Streamline the shipping process

D2C companies can benefit from creating an accessible and efficient shipping process for a company's products. For example, you can create a shipping service that delivers a product directly to a customer's house, which gives them an opportunity to interact with a sales representative. Consider hiring website designers who can optimize a website's shipping portal, better ensuring that diverse groups of customers can navigate it easily. You can also offer free returns, which may motivate potential customers to purchase a new product from a company's website, as they know they can recover their funds if necessary.

Research SEO keywords

SEO keywords are specific terms or phrases that an individual adds to online content to improve its ranking on a search engine. Researching SEO keywords can help a company increase brand awareness and promote products or services. First, discover which phrases are trending on search engines and social media websites. Then, implement these terms in the content on a website's home page, particularly in headers and topic sentences. You can also create blog content that uses SEO keywords, which can also help a company convey its mission statement to prospective customers browsing the internet.

Partner with celebrity influencers

Celebrity influencers are individuals who became famous through mainstream media, then amassed a lot of followers on a social media account. If a company partners with an influencer, it can promote its brand and merchandise via sharing posts and photos on its profiles. It may be helpful to research influencers who share a value system with a company, then have a marketing team craft a carefully worded email to their public relations team. You can partner with influencers who grew a follower base solely through a social media, video-streaming or podcasting platform.

Encourage customers to promote a brand

Consider motivating current customers to promote a product or service, as prospective customers may trust their opinion. To incentivize them, you can offer a discount or reward based on how many times they refer a company to a peer or family member. For example, you can provide a specific referral code. They can give that tallies how many times other people use it on a sign-up page. You can also host a contest via social media that offers a discount for people who share a company's post or make their own promotional content a certain number of times.

Find customers through blog posts

Before establishing a new D2C company, it may be helpful to advertise its mission statement and value system through blog posts. Consider posting about relevant topics to the products or services a company sells or its industry. For example, a retail company can generate content about popular fashion trends or style advice, then implement a portal for individuals to leave comments. If a company launches its primary products or services on its website after amassing followers on a blog, the executives may increase the number of initial customers they receive.

Create a popular advertisement

Develop a video advertisement that multiple individuals share across different websites, as this can inspire prospective customers to learn more information about a company's brand and increase its overall sales. To create a popular advertisement, it's important to research popular trends among your target audience. For example, if prospective customers respond more positively to videos that have a story with a narrative arc, you can adapt that format using a company's signature style. You can also use a trend to help develop a brand's attributes.