What ecommerce retail novices can learn from Direct-to-Consumer successes

By: Lauren Smartt

23rd July 2020

David Bedford, Director of Digital Strategy at Cheil UK, and eCommerce and Loyalty lead for the agency’s new consultancy arm Cheil Consult

Retailers and brands have faced some tough truths in past months about whether their digital processes and operations are fit for purpose – the accelerated trend of consumers to shop online has tested digital resources to the limit.

Many consumers have tried out online commerce for the first time thanks to the restrictions, regulations and general anxiety around non-essential shopping after the start of the lockdown, and many found it convenient, cheaper and less stressful than physical shopping.

Nearly a third (30%) of new online buyers between March and April went back for a second order and a third of new online CPG buyers came from the 55 and over age group (Nielsen global data). John Lewis has forecast that between 60% and 70% of its sales could be online for the remainder of this year and next year. 

On the other hand, customers have also found frustrations in going online, from the pressures of finding an online grocery delivery slot to complex returns processes, and the lack of opportunity to speak to a reassuring human voice when things went amiss.

The growing appetite for online purchases should be a wake-up call for retailers without any ecommerce capability and for those who found their low-grade transactional website tested to breaking point with mounting orders. If you can’t provide the shopping experience your customer wants when they want it, they’ll move on (and possibly badmouth you to their friends and colleagues).

To stay competitive, all sectors – not just retail – should be reviewing their digital transformation plans. Our own survey of more than 200 ecommerce and CX decision-makers across several sectors conducted by CensusWide found that 44% of respondents have accelerated their plans for digital transformation due to the pandemic. This is laudable but 39% say their plans have remained the same and 17% have even rolled back their plans. If there was ever a time to prioritise transformation plans, it’s now.

For retailers looking to tune up their digital offering or those just looking to put a stake in the ground, getting a clear sense of purpose and a roadmap is essential. Just plugging in some tech, flicking a switch and hoping for the best won’t deliver a long-term sustainable ecommerce strategy.

The original online Direct-to-Consumer (D2C) brands, such as Dollar Shave Club, blazed a trail and created a model for a host of followers. Many of these pioneers have since sold up to the multinationals and as more and more brands pile into the D2C space it is tougher to cut-through and differentiate (even Heinz has launched a D2C offering for tinned grocery).

But the foundation stone of a successful D2C proposition remains a single-minded focus on devising a fantastic end-to-end customer experience (CX). To achieve this, you need to map out what excellence means for your customers when they’re researching, shopping and looking for inspiration – and find ways to deliver ‘surprise and delight’ within this customer journey.

D2C lessons

I’ve pulled out some of the important lessons we can learn from D2C below:

  1. Personalisation is key. Returning customers expect recognition – and this means more than just getting their name right. They want tailored offers that don’t feel like ‘one-size-fits-all’ promotions. They want to feel they are receiving something exclusive and smart brands will have a sequential rewards programme in place for their loyal customers that drives advocacy and lifetime value.
  2. Gather and use data to help create this personalised experience. D2C businesses have a head start on gathering customer details. Bricks and mortar retailers need to be on the front foot in collecting customer data via questionnaires, voucher offers that require some personal information etc. Customer feedback loops are essential, but our survey found only 30% of respondents saying they carry out social media sentiment monitoring, while only 39% said they plan to improve their CX with investment in better data collation and interrogation.
  3. Build out your online offering and deliver the best experience across platforms and channels as they become relevant to your audience. At one time a simple website sufficed but now mobile commerce is soaring. Increasingly people are also making purchases via social media platforms like Instagram – cosmetics retailer Sephora has just signed a deal with Instagram for “a unique social shopping experience.” An omnichannel approach will be necessary to scale and reach new audiences/markets.
  4. Find a niche play if possible. Analysing what’s selling at any particular time and layering over other contextual data pays dividends. Boohoo stole a march on its rivals by swiftly pivoting to promoting and selling comfy ‘WFH-wear’ when lockdown began. In many cases this was just a rebranding and collating of existing lines, but it put Boohoo in the lead (the company should also have been auditing its supply chain – this is costing it dear in terms of reputation).

Innovative examples

Examples of DTC brands that have caught my eye thanks to their imagination and innovation include Patch Plants. The business delivers plants to the home, so had a great niche for lockdown. Among the added value it offers are free ‘houseplant parenting’ courses.

I’m also impressed with online personal styling service StitchFix,  which boxes up and sends a curated selection of clothes it feels will work for you. The customer pays for what they keep and StitchFix builds a profile based on purchases, so it can tailor its recommendations to your personal style. There’s a clever rebranding here – no subscription fee but you do pay a £10 ‘styling fee’.

If you ask your friends and colleagues where they enjoy shopping online and what’s impressed them, you’ll soon build up a bank of ideas that can, with expert help and guidance, be translated into your own impressive ecommerce offering.