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    March 31, 2021
    7 minute read

    How Hero Group Launched a Successful D2C Channel

    by: Christian Hassold

    According to projections from Ecommerce News Europe, online revenue exceeded 717 billion euros in Europe in 2020. Even Eastern European countries typically left out of the digital transformation conversation saw tremendous growth throughout the year.

    As ecommerce revenues grow, brands race to have a true omnichannel commerce experience to reach every digitally native customer in their audience. With the growing need for online channels, a brand-owned direct-to-consumer (D2C) channel becomes increasingly important.

    Swiss brand Hero Group had plans that dated back to July 2019 to launch its own D2C channel for their product line of baby formula. The entire process launched in about nine months with help from their agency and ecommerce tech partners.

    On a recent episode of the Digital Shelf Cafe, Salsify sat down with Arjun Vuik, ecommerce manager for Hero Group, to discuss his insights into the process.

    Pivoting Ecommerce Strategy Amid COVID-19

    Hero Group’s traditional strategy focused on brick-and-mortar grocery retailers, but the brand decided to change the plan when it became apparent through its research that new parents were increasingly shopping on digital channels. Hero Group wanted to offer its digital customers the option to purchase directly from the brand for a true omnichannel shopping environment.

    With their D2C site, Hero Group was able to create a tailor-made customer journey for its customers. They were unable to own the shopping experiences on the digital shelf with their other online channels, like traditional grocery partners’ ecommerce sites.

    In addition to their D2C channel, they also launched a digital shop on a third-party marketplace, Bol. This approach resulted from the COVID-19 pandemic and subsequent lockdowns that made it nearly impossible for new mothers to find food for their newborns. This also led to the decision to stand up on a digital marketplace so their customers could buy products immediately.

    Benefits of Third-Party Marketplaces and D2C

    Regarding third-party retailer relationships, Hero Group never planned on propping up a digital shop. However, they found ample success launching on Bol — so much so that they will continue the channel even after the COVID-19 crisis has passed, despite not having had plans to host a digital shop on a third-party platform prior.

    Additional sales channels offer new revenue streams — not just for providing an option to existing customers, but for also reaching new customers who prefer digital marketplaces.

    Personalized Experiences Engage Shoppers

    Additionally, their D2C has shown great success. One of the main benefits of the D2C site is having total control over the customer experience. They offer a free subscription option in which new parents input the pregnancy stage, baby’s age, and other relevant information.

    Hero Group then provides personalized shopping experiences for each customer. They’re able to send customized promotions, reminders when they need to reorder food, and proper recommendations based on each customer’s unique needs.

    Leverage D2C Data for Retail Strategy

    Sometimes launching a D2C channel or a digital shop on a marketplace can ruffle the feathers of traditional retail partners. However, the data that brands have access to through third-party marketplaces and D2C channels can also help your brick-and-mortar partners.

    Typically, retailers will only sell some of your product line. Hero Group was actually able to go back to their grocery partners and showcase the products that have been selling well on their owned digital channels to convince them to carry other best sellers. 

    Online channels force brands to become digital-centric after launch. Hero Group quickly realized a need to change its packaging. New parents wouldn’t want to reorder baby food weekly, so they switched to bulk packaging.

    Reconfiguring their packaging to a more ecommerce-focused strategy offered a winning situation for both their customers and traditional partners — customers can order less, and grocers save on costs with bulk orders.

    Insights Into Launching Your Own D2C 

    Hero Group notes that the first step in launching a D2C is to first define your “why.” Why do you want to launch a D2C channel? An additional sales channel, owned customer data, and owned customer experiences are all worthwhile reasons.

    The “why” should frame each decision made when building out the channel. The experiences on the channel, the tech stack and partners you choose, and the KPIs can all be framed by first answering that question.

    Another top recommendation for a D2C launch is to leverage your partners to the fullest extent. Hero Group worked with an agency to build out the website, and they worked with a variety of tech partners to build out content and logistics.

    Launching a D2C site can be a full-time project, so leaning on the resources at your disposal can speed up time to market.

    Hero Group also noted that in launching their D2C site, they saw their marketing budget increase considerably. The majority of this budget was allocated to social channels, given their industry and target market.

    Hero Group found that with increased marketing spend to drive engagement with their D2C site, they could significantly outperform their KPIs for the channel.

    How Salsify Helps Brands Launch a Successful D2C

    Salsify partners with brands to create exceptional D2C experiences. Two necessities in any D2C channel are a place to store and govern product content, and a means to activate it to the digital shelf. Salsify partners with brands to execute these needs while also saving time and spend by creating a more efficient process.

    Additionally, Salsify helps brands create best-in-class experiences through enhanced content. Enhanced content, such as brand imagery, videos, comparison charts, and editorialized images, offers more insight into what customers can expect to receive. Simultaneously, enhanced content creates a more engaging shopping experience that customers love.

    Watch the Digital Shelf Cafe episode, "Key Insights on Launching D2C," to learn more about Vuik's experience launching a successful D2C channel.

    WATCH NOW

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