Mastering the Art of Customer Ownership: Why D2C is Your Next Big Move

September 4, 2024

In today’s digital marketplace, it’s crucial to understand the differences between Direct-to-Consumer (D2C) and Business-to-Consumer (B2C) commerce platforms, especially for manufacturing companies and brands considering a shift toward selling directly to consumers.

While both platforms facilitate transactions between businesses and end consumers, a true D2C platform offers a more comprehensive suite of tools, such as an ERP to manage more complex stock and warehousing requirements extending beyond what a standard B2C platform can provide.

In recent years, brand owners have increasingly sought to reclaim control over their customer relationships by “cutting out the middleman.” This trend, often referred to as “disintermediation,” is driving a significant shift in how businesses operate.

What is driving this shift?

In a fast-paced global economy, scaling a profitable business has become increasingly challenging as companies must now compete with similar businesses worldwide. While some markets may benefit from lower labor and production costs, these factors alone don’t fully explain the growing trend toward D2C.

The rise of massive online marketplaces like Amazon and Temu has also played a role. While these platforms offer a suite of attractive services for anyone starting an online business, they fall short in one critical area: customer visibility. Without knowing who your customers are, you’re thrust into a commodity market where understanding your audience and delivering a unique value proposition becomes significantly more difficult.

Compounding these challenges are inflation, rising interest rates, and increasing labor costs in many markets. At the same time, consumers are tightening their belts due to cost-of-living pressures, leading brand owners to reconsider their strategies. Setting up their own eCommerce platforms allows businesses to regain control over their margins and customer relationships.

Transitioning to a D2C model can seem daunting, but with the right strategies in place, it’s a move that can pay off significantly.

So What’s the Difference?

But what exactly does it mean to be a truly direct-to-consumer (D2C) operation, and how does it differ from the more familiar Business-to-Consumer (B2C) model?

And why is it crucial to choose the right platform for D2C, one that scales with your growth and provides a comprehensive, out-of-the-box intelligent solution?

While traditional B2C commerce platforms have their strengths, they often fall short by failing to provide the unified business intelligence needed to connect all parts of a D2C business. This results in siloed customer and product data, limiting visibility and preventing your teams from accessing real-time insights that drive better decision-making and customer experiences.

Choosing a unified platform ensures that your entire business—from marketing and sales to service and fulfillment—operates seamlessly with a 360-degree view of your customers.

Apart from the obvious distinction—where a D2C business serves customers directly, bypassing wholesalers, intermediaries, or agents—there are some fundamental differences, which are laid out in the chart below:

Aspect	D2C (Direct-to-Consumer)	B2C (Business-to-Consumer via Retail)
Degrees of Separation	D2C businesses make, sell, and distribute directly to customers	B2C involves the brand (primary producer) selling to retail intermediaries, who then sell to end customers indirectly
Customer Experience	You control every aspect: website features, cross-selling, bundling, rewards, product recommendations, discounts, shipping, etc.	The retail marketplace or intermediary controls the customer experience: they manage the website features, cross-selling, bundling, rewards, discounts, product recommendations, and shipping. The brand has limited influence over the final consumer experience
Connection	You have access to all the data and touchpoints to engage customers before, during, and after the sale	Your primary customer is the retail intermediary. You lack direct data or insight into the end consumer’s behaviours and preferences, as the retail marketplace retains all this information
Immediate Benefit	Brings your brand and customers closer faster, enabling quick adjustments based on direct feedback	Potentially provides broader market reach but with little to no control over how your product is marketed or sold, as well as no direct contact with the end customer

Why B2C Platforms Aren’t Enough for Manufacturers going D2C

For manufacturing companies aiming to sell directly to consumers, a standard B2C platform often falls short. The lack of integrated ERP systems, comprehensive logistics management, direct customer service capabilities, and a centralized view of customer data can significantly hinder operational efficiency and customer satisfaction.

D2C Commerce platforms

D2C platforms allow manufacturers to sell directly to consumers, bypassing traditional retail. Key benefits include:

Integrated ERP: These platforms synchronize inventory, orders, and financial data in real-time, reducing operational costs by 10-20% and supporting business scalability.
Advanced Logistics: D2C offers end-to-end supply chain control, optimizing delivery and enhancing customer satisfaction.
Enhanced Customer Service: Direct communication with consumers enables personalized service, fostering loyalty and repeat purchases.
Centralized Customer View: A unified view of customer data provides insights for effective marketing and product strategies, boosting ROI by 25%.

Glossier, a US-based D2C skincare and makeup brand, effectively uses social media influencers and customer engagement on platforms like Instagram to drive direct sales, exemplifying its strong direct-to-consumer approach.

B2C Commerce Platforms:

B2C platforms connect businesses to consumers but often lack the integration and control of D2C: Limited ERP Integration: B2C platforms may lead to disjointed operations and higher costs due to fragmented systems and manual processes.
Basic Logistics: Dependence on third-party logistics can limit shipping control and efficiency.
Standard Customer Service: Indirect, less personalized support can weaken customer loyalty.
Distributed Customer Data: Siloed data across retailers limits insights into customer behaviour, hindering personalized marketing.

A true D2C platform, with its advanced features and seamless integration, provides manufacturers with the tools needed to manage their operations efficiently, understand their customers deeply, and offer an exceptional consumer experience. This comprehensive approach is crucial for manufacturers looking to thrive in the competitive direct-to-consumer market.

Transitioning to a D2C model can seem daunting, but with the right strategies in place, it’s a move that can pay off significantly.

Here are three tips to consider when choosing a D2C eCommerce platform to ensure your transition is smooth and successful:

Tip #1 - Prioritize Integration Capabilities

When selecting a D2C platform, ensure it integrates seamlessly with your existing ERP and other backend systems. This integration is crucial for managing inventory, orders, and financial data in real-time, reducing operational costs, and supporting scalability as your business grows.

Tip #2 - Focus on Customer Data Ownership

Choose a platform that gives you complete control over your customer data. Owning this data allows you to engage directly with your customers, personalize their experiences, and build long-term loyalty. Without this, you risk losing valuable insights that can drive your marketing and product strategies.

Tip #3 - Look for Flexibility in Customization

Opt for a D2C platform that offers flexibility in customization. This will allow you to tailor your online store’s features, design, and functionality to meet the unique needs of your brand and customers. A customizable platform enables you to create a distinctive shopping experience that reflects your brand’s identity and adapts as your business evolves.

So if you want to own your customer, then start working towards the D2C ideal in your platform and the way you think about your business and customers.

StoreConnect has solved D2C for brand owners and is helping brands big and small make the move to D2C with a fully integrated Customer Commerce platform built on the world’s #1 AI CRM - Salesforce.