How a D2C Ecommerce Model Can Help Build Customer Loyalty
Salsify | July 6, 2020
Warby Parker, Casper, Honest Company, and Billie. Digitally native vertical brands (DNVBs) like these are well-known for cutting out the retailer and successfully growing their businesses via a direct-to-consumer (D2C) model. They all possess an intense affinity for putting customers first and creatively reaching shoppers directly through marketing and selling on social media and their own websites.
A D2C model also nimbly adapt to changes in the cultural and ecommerce landscape. When brands manage their own consumer buying experience from start to finish, they don't waste time or money dealing with retailer demands and can truly ensure customer needs are paramount.
Consumers are both enticed and retained by this tailored attention.
Legacy Brands Lean In to D2C
Frito-Lay, Heinz U.K., and Chicco, are established brands that have longstanding selling relationships with retailers and have recently implemented D2C models in addition to their ongoing retailer relationships. These companies already possess large swaths of market share. (Frito-Lay was in 94% of U.S. pantries before its D2C model launch.)
For these legacy brands, a key goal of employing a D2C model was to increase consumer loyalty by connecting and communicating with its consumers more directly. Increasing market share and revenue were not necessarily the core objectives. However, as the Digital Shelf Institute reported, over the past seven years, "$17 billion in sales has shifted from traditional, larger CPG brands to smaller CPG brands."
These legacy brands see consumer relations and loyalty as the future of their success. With a D2C model, they can learn ways to serve their customers better, personalize shopping experiences, and build enduring consumer trust.
Glean First-Hand Insights About Customer Product Preferences
Frito-Lay launched its D2C website, Snacks.com, amid COVID-19 and instantly began cultivating new and surprising consumer data.
While the pandemic caused "heightened demand for its iconic products including Lay's (up 32%), Tostitos (up 42%), and Cheetos Popcorn (contributing to 65% of ready-to-eat popcorn sales)," according to Forbes, Frito-Lay saw a substantial uptick in demand on Snacks.com for their lesser-known, but cult-followed brands.
Bare and Off The Eaten Path are often hard for consumers to find because national retailers don't always carry smaller, niche brands. These two brands were overwhelmingly top sellers on the site.
Frito-Lay now knows there is strong demand for the smaller brands that had been hindered by local availability and is armed with first-hand data it can show retailers to expand the nationwide selling of those brands.
Drive Conversion With Personalized, D2C-Exclusive Products and Service Offerings
Through its new D2C website, Heinz U.K. has turned its product offerings into a helpful, considerate service for its customers. The 151-year-old brand began selling bundles of tits shelf-stable canned goods amid COVID-19, which were often hard for consumers to find in depleted retailers or challenging to get to because of shelter-in-place guidelines.
The company now sells customizable, consumer-selected combinations of classic canned goods — from beans and soups to sauces and pasta. The site also features recipes, baby-centric bundles, and personalized gift-giving options so the packages can be sent from one person to another.
The legacy brand's D2C model feels truly consumer-focused. The experience is fun, the packages arrive within three days, and are reasonably priced — a bundle of 16 cans is under $13 USD and shipping less than $5 USD.
Similarly, Frito-Lay's Snacks.com lets consumers pick their own "snack pack," consisting of products from across 20 of its brands. This shopping experience is colorful, engaging, and easy, and lures the consumer back for additional purchases.
Earn Consumer Trust With Engaging and Consistent Digital Interactions
As a baby product manufacturer, Chicco must have reliable digital interfaces and consumer interactions that parents can trust. Using product experience management (PXM) to centralize content, learn from digital shelf performance, and syndicate messaging and product information across multiple channels, the 62-year-old Italian brand's content consistency is as assuring as it is informative for nervous parents.
Their easy-to-understand, in-depth guide on choosing the right car seat illustrates how Chicco uses content to put consumers at ease and encourages them to form repeat, direct relationships with the brand. The shoppers feel heard and important, and entrust their babies to the products.
This level of loyalty comes with tight control over the digital shelf, including where products appear, product pages, and brand messaging. Seamlessness and positive memorability of a shopping experience are vital purposes of PXM, and lead to more engaged customers and a more meaningful brand community.
Consumer Trust Is Paramount
When deciding on the objectives for your D2C strategy, be sure building consumer trust is paramount. How your brand will form and maintain product page content, various perks, and original shopping options, and what your brand hopes to learn about consumers should be strategized and clear before launching your D2C site.