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Why D2C Is Becoming an Important Channel for SMEs?


Pragya Gupta

Content Writer @ Shiprocket

June 14, 2019

4 min read

The retail world is changing at a breakneck speed. Everyone in the industry looks for ways to cut out the costs and increase sales. With the advancement in internet and technology, the shopping funnel is much more convenient and easy. Retail automation will further make shopping experiences more streamlined.

Due to this customer-driven approach, the traditional brick-and-mortar stores and even D2C brands are now trying their hands at new technologies and strategies to enhance the experiences they offer.

What Is D2C?

Selling and promoting a product or service directly from the seller to consumer without any intermediaries is known as D2C marketing. This form of marketing helps reduce costs and is really helpful for Small and Medium-size Enterprises (SME’s) with small or moderate budgets.

Dismantling The Traditional Purchase Funnel

Over time, the purchasing path has shifted to customer-based or utility-based shopping. This grants customers the priority and convenience which matters the most. Moreover, cutting the middlemen allows D2C companies to sell their products at a lower cost than the traditional consumer brands. Also, they get to maintain end-to-end control over the making, marketing, and distribution of their products.

Why Should Brands Consider Shifting to D2C Model?

Surely, you wonder if your sales are below expectation from various marketing channels. A lot of growing brands struggle to build themselves up on lower budgets.

Why choose the d2c model

If you are confused about switching to D2C model, below are a few benefits that you must consider:

The Opportunity to Collect Data

Since the middlemen are cut down, D2C brands get direct access to the customer data. Email addresses, social profiles, demographics, geography and more helps the brands to identify the preferences and purchasing behaviours of their target audience.

Higher Profit Margins

When you sell your products directly without a distributor means you can save on a lot of costs. Offering products directly to consumers allow manufacturers to retain at least some control over the customer’s journey and their own profit margins.

Strengthening Brand Loyalty

With better customer data access comes better customer connections. These help you provide good customer service and support. Good customer experience always results in building brand loyalty and targeted marketing for retention.

Personalization of Products

Today, customers expect something unique and beyond. They expect products customized as per their choices and preferences. Such personalized offerings give you a competitive edge over same-old landscape businesses.

More Experiments With Products Personalization of Products

By reducing middlemen, not only the costs of businesses go down but also of the customers. Hence, you’ve got more scope to experiment with your products by opening new lines or more expensive and premium products. Indeed, brands like Bigsmall, DailyObjects and more have become famous due to their personalized offerings to their customers. Social selling has also gained momentum due to personalized products.

Control Over Distribution

By shifting to D2C model, you can have complete control over your distribution and order fulfillment. You can reduce your shipping charges by opting for a courier aggregation platform like Shiprocket. It offers (with the help of their Courier Recommendation Engine)  you a list of courier partners which can deliver as per your priorities

Sum and Substance

D2C model works well for SMEs. It offers too many reasons that couldn’t be ignored. By cutting out longstanding middlemen, not only does your profits amplify but you also get direct feedback. The direct feedback helps you understand the results you derive out of the efforts you’ve put in. No matter what industry you are a part of, if you want to increase profits, it’s high time that you begin thinking about shifting to D2C model.  

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