Direct to Consumer

I have ordered facewashes and shaving cream from ‘Mamaearth’ and ‘Bombay Shaving Company’ respectively. It was delivered to my doorstep within two working days. I was a bit surprised by the customer service of these companies because many other websites deliver the product after 4 to 5 days, sometimes even more than that. After learning that these companies deliver directly to the customer without any middleman, my interest peaked and I want to know how these companies work. “What are the benefits of direct delivery?”

After some research I learnt that Direct-to-Consumer or D2C marketing has become wildly successful for many manufacturers of consumer goods in the last decade. Though it’s not an easy path, with a strong strategy and a hardy constitution, the rewards can be significant. Today’s consumer industries are marked by rapid change and constant disruption in global consumer, retail, and supply markets.

The rise of the digital consumer, direct-to-consumer (D2C) subscription services, and new digital touchpoints and channels in the purchase journey is bringing new moments of opportunity to augment established business models and marketing approaches. They offer the potential for huge rewards through sales growth, insight, and customer lifetime value to those that succeed in directly engaging and retaining consumers’ trust and loyalty. They sell products from their websites and apps directly to the consumer which leads to increased profit margins, deeper customer relationships, and creating customer databases but it also has certain disadvantages like occasional supply chain issues and greater responsibility.

 Businesses have four levels of customer engagement:

The Egg Stage: 0-3 Years – The starting period of any D2C business, either online or offline. They use feasible marketing techniques to acquire customers such as E-mail or SMS.

The Caterpillar Stage: 2-5 Years – Understanding user behavior becomes key to engaging with them more efficiently in this stage. Any user data, gender, age group, location, etc, can be leveraged to build better communication and improve retention and conversion.

The Butterfly Stage: 3-7 Years – The company sees the first flush of effective customer engagement. Companies in this stage usually have a comprehensive marketing automation system in place and experience lower CAC due to referrals and word-of-mouth promotion.

The Nirvana Stage – A business that has attained ‘nirvana’ may leverage in-house MarTech solutions executed by a team of experts who make sure that marketing, engagement, and analytics work in synergy.

Consumers cite many reasons for their love of D2C brands:

·          The enticement of free shipping and fast delivery

·          The convenience of subscription services

·          Convenience

·          Better brand engagement

The start-ups become unicorns after an investor’s valuation reaches $1 billion or more. This is why they also require a succession planning strategy which requires 5-10 years to successfully be on track. To learn more, stay connected with Master Insiders and let your successor make your company worth billions.

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