Many businesses are now looking hard at how their brands can be reshaped to accommodate a direct-to-consumer (D2C) approach. This move will give them control over how they approach their customers and the data that they are able to collect about their customers' purchase habits and behaviour.
McKinsey highlighted six business archetypes that will emerge during the post-COVID-19 era. Of the six, there are four that deal on a direct-to-consumer basis.
The first being the remote services provider. For example, medical consultations (Teledoc, JD Health, Speedoc, etc) and online education (TAL Education). Today, with the various platforms that our agency, SYL+JAS, helps businesses set up, we see this playing out on a greater scale. Businesses that are traditionally on a B2B level now want their products/services down at the customer level.
Second, the collaboration platform. This includes training platforms and also businesses like Google Meet, Skype, Zoom and the various similar businesses that are attempting a piece of the video-conferencing pie. The overall experience however has to be closely managed as a brand can utilise other means to deliver collaboration as well.
Third, the dynamic talent deployer, which is an extension of the gig economy approach. This allows businesses to quickly acquire talent to meet short term demands. For example, the grocery businesses that offered short-term work to employees laid off from the airline industry during the lockdowns. This bypasses a secondary hiring platform that increases waiting time and costs.
The final one is that of the digital retailer, such as Mr Porter, MatchesFashion, and the upcoming Haute by SYL+JAS store. It involves creating a curated experience in retail without the physical presence, which is a big but achievable challenge.
How does it all work?
As the pace of D2C continues to accelerate, we foresee brands taking a more targeted tactical approach in spotting emerging opportunities, focusing capital and people quickly, cutting losses in areas that do not work. Brands will do well to leverage data-driven insights to test, learn, and correct course rapidly.
What is important for brands to note is that they have to adopt a flexible, nimble approach of innovation. Needs and wants of the ever-fickle customer are evolving. Perhaps it is also time for your brand to do away with the old metrics of trying to "win" market share at all costs. Fragmentation of the consumer base is now a norm and the past success indicators may not work as well as before. What may well work will be for brands to be "first-to-market" as it goes "direct-to-consumer".
Brands need to take a multi-pronged approach in looking at their outreach efforts to the consumer. In setting up their D2C platform, they will need to work on designing the customer journey to maximise conversions in moving customers down the marketing/sales funnel.
Execution of this is mission-critical as your strategy will now be "manifested" in the flesh. How should a brand continue to engage the customer and keep them coming back for purchases? Not all brands/businesses have the luxury of the subscription model as a starting point, but starting with attention grabbing will be an essential point to at least get some traction going forward.
How is your brand working on these areas?
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