As a manufacturer, you’re a master in your products and their production, but developing a digital go-to-market strategy to help your organization evolve is equally as important with getting your products out the door – especially if you’re considering going direct-to-customer (D2C). Targeting customers directly can provide many benefits to your business, such as building stronger customer relationships and expanding into new or underserved markets.
But going D2C isn’t as simple as it sounds. You need to assess your organization to ensure you’re truly ready to take on this transformation and confirm it will prove beneficial for your business.
Here are a few ways to determine if your business is ready to go D2C.
Looking at Your Business Internally
To successfully go D2C, you must determine if it will benefit your business overall. That means having a clear understanding of whom your audience is and if your organization’s infrastructure and technology can support this new approach.
Understanding the Customer
Going D2C means you can target your products’ end-users, bypassing third-party retailers, distributors, and any other intermediaries. Your business must think about and determine who your target audience is and what you know and don’t know about them. To help understand and confirm which audience is best to target, consider the following questions:
- What value are we going to bring to these specific customers by going direct?
- Is this a new target audience that is currently being underserved?
- Do we know what they need, want, and expect?
- How will we service them?
- What products and services would customers be interested in?
- What prices would we offer?
What will we offer them and why?
- Do we know how they want to interact with us? Do we want to enable one-time or ongoing purchases? Both?
- How do we manage this new channel and our relationships with our existing channels?
- What would the buying journey look like for both physical and digital channels?
- How would we handle returns, exchanges, and warranties?
Once you define what you want to do and how you plan to do it, it’s always a good idea to validate what you think you know with what the customer actually wants and needs. You can confirm this information by performing customer research and hearing first-hand from your target audience what is best for them.
Assessing Your Infrastructure
With your ideal target audience in mind, it’s also key to know if your organization’s internal processes can support a D2C approach. You should conduct a strength, weakness, opportunity, and threat (SWOT) analysis to understand where your business is as you formulate your D2C strategy. Some factors to evaluate are:
- Shipping and manufacturing: Do you have the infrastructure, technology stack, and business model to handle smaller shipments of product at an increased frequency?
- Product information and content: Do you have product information that is optimized for the digital experience? Do you have the means to enrich the product data to enable it as product content?
- Internal infrastructure: Do your internal processes, like returns and warranties, align with your D2C strategy?
- Inventory management: Do you have the ability to display existing inventory and availability? Are you able to serve your customers with multiple shipping and delivery options? If not, then consider utilizing a 360-degree order management system (OMS) to provide clear visibility of what products are available.
Something else you should consider when going D2C is your third-party channel partners. Do you risk affecting your relationship with these partners? How can you mitigate that risk? You may want to consider:
- Will you pay your channel a percentage of the orders that come in through direct channels?
- Could your channel fulfill the orders that you accept directly from your customers?
- Does your channel provide services that could be scheduled when you sell direct?
- Do your sell spare or replacement parts, is this an opportunity for a direct channel with less chance of channel conflict?
- Could you target a market this is currently not served or underserved?
Lastly, do you have all the right products to sell if you decide to target a specific industry? If not, investing in a marketplace strategy can help to sell your products as well as to bring in other vendors with complementary products to help you become a one-stop-shop for your customers.
Always Think About What’s Next
Answering these questions internally can be difficult, which is why bringing in a third-party advisor to help determine where your business currently stands in these areas, discuss any risks and how to mitigate them, and help figure out which technologies will best suit your strategy and business needs can be key to formulating a plan to go D2C successfully.
There are many different ways for your organization to target D2C, but understanding what it takes to do so for your unique business is what results in a successful, scalable plan. For more information on defining your D2C strategy, contact our commerce experts today.
