With Black Friday and Cyber Monday on the horizon, brands are preparing to enter the busiest quarter of the year. But with economic uncertainty prompting cautious spending by consumers, what is it that makes a D2C sales strategy (via the e-commerce sales channel) truly effective?
Across the globe, but particularly in Europe, multiple economic factors are having a knock-on effect on consumer spending. The continuing energy crisis is one of those, with utility bills expected to hit record highs this winter. Alongside this, rising inflation is causing consumers to tighten their purse strings even further, with growing anxiety translating to limited spending. For retailers, this means fewer sales, resulting in stock sitting in warehouses for longer.
Having the right D2C supply chain setup can significantly increase online sales conversion and retention and support a brand’s NPS and customer satisfaction while reducing costs
During the Covid-19 pandemic, many brands moved towards a D2C strategy to sell to customers directly ‘from factory to sofa’, rather than going through third-party platforms, online retail or marketplaces. Since then, brands have continued to embrace D2C as a way of supercharging their growth, increasing their profitability and building their brand.
With this in mind, how can brands most successfully use their D2C strategy to support success during the peak season and accelerate future growth?
Taking back control to meet consumer demand
McKinsey’s latest European Consumer Pulse Survey, released in October, showed that consumer confidence remains low across the region. At the same time, many brands have reacted to recent supply chain disruptions and have been working to become more resilient, aiming to have warehouses full of stock to reach their customers quickly regardless of geographical location. This strategy has with the lower consumer confidence led to an abundance of inventory and is one of the reasons why many brands now face having excess stock in their supply chain.
Within a D2C strategy, brands can work to ease these supply chain challenges, creating revenue streams which are less dependent on third-party marketplaces and more focused on the end customer. During peak season, when consumers are actively seeking out discounted goods in the run-up to the holidays, brands have an opportunity to regain control.
While there are uncertainties in the market, growth is still expected within e-commerce. For brands, it is important to partner with a logistics partner that has the supply chain capabilities, geographical reach, and investment power to help find a way through uncertainties and support the scale-up needed.
We're seeing aggressive growth in D2C e-commerce, and we’re only just starting. Brands need to make sure that their D2C supply chain is ticking in terms of quality, scalability and certainly also cost – and that they have the right partner to support them on their journey.
Getting to know customers through data insights
By embracing a D2C strategy, brands can learn much more about the people buying their products and capitalise on the lifetime value of a customer. By acquiring data upon purchase, such as names, physical addresses and email addresses, brands can build more accurate customer profiles and begin to better understand their interests and spending habits.
This is crucial for increasing customer retention and webshop conversion. Learning more about their customers and their shopping habits will enable brands to retarget, reaching new customers with similar shopping behaviour.
Fundamentally, data insights from D2C e-commerce assist brands in building a customer base, attracting new customers, and driving product development by tailoring their goods to the needs of their current and future customers.
Omnichannel fulfilment to fuel agility and resilience
To effectively manage inventory and operate a streamlined D2C sales strategy, brands need to embrace omnichannel fulfilment to maintain agility and resilience within their entire end-to-end supply chain.
For brands transporting orders globally, having the right supply chain setup in destination countries and regions is crucial. But it’s a balancing act. Brands need to know how much inventory to hold, and where, to avoid high working capital constraints, while also enabling their inventory to flow faster and more accurately – and with more agility – through their destination supply chain.
Omnichannel fulfilment allows brands to set up multiple distribution centres across the supply chain, putting their products closer to market and allowing them to deliver orders to retailers, wholesalers or directly to their customers from one inventory holding position.
This approach, rather than operating separate fulfilment centres for B2B, B2C and D2C sales, allows brands to deliver faster, make decisions quickly about where stock needs to be, and serve multiple channels from one centralised inventory, thus mitigating the risk of overstocking and excessive working capital demand.
Finding a partner to go the distance
As we approach the retail sector’s peak season, against the backdrop of reduced overall consumer spending, brands need to embrace a sales strategy which will allow them to maximize inventory control while building closer relationships with their customers.
A robust D2C strategy requires a retailer to have brand awareness and brand value, but also the infrastructure to capture customer data and the right logistics partner to help them deliver on what they promise through streamlined and straightforward logistics.
For brands, finding a partner that allows them to split their inventory, placing popular products closer to market, is key to this, as well as one with the ability to upgrade quality and increase accuracy, delivering value to customers and building brand loyalty.
With Maersk, retailers can harness the power of D2C e-commerce, accelerating their growth strategies and bringing greater agility and resilience to their operations. In the current economic climate, very little is predictable, but retailers are being presented with an opportunity to drive their D2C strategies to meet the current needs of consumers.
It is through collaboration and real partnership with logistics partners that retailers can unlock the power of D2C, allowing them to better serve their customers through access to valuable data insights, omnichannel fulfilment solutions and streamlined inventory management.
With operations in more than 130 countries, Maersk’s global reach and expertise can support brands to enter new distribution markets, streamline their logistics, and fuel D2C growth, as well as manage their last-mile costs most effectively.
Maersk is about more than e-commerce. We help reduce complexity throughout the supply chain – providing a comprehensive, integrated and global solution for successful brands.
To learn more, visit E-Commerce Logistics & Order Fulfilment Services | Maersk.