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Why Should Manufacturers Adopt a D2C Strategy?
Access new revenue streams and scale your product range
Sure, it’s the obvious advantage. But, by going D2C, manufacturers will see growth in their profit margins. One reason is selling directly to customers means you’re able to sell at retail price, rather than wholesale.
In addition, adding new channels extends your reach, allowing you to access more customers you wouldn’t normally sell to. Take the example of a B2B manufacturer specializing in industrial cleaning products for hospitality. They primarily sell through traditional B2B channels such as distributors, dealers, and direct sales to businesses.
By establishing an eCommerce platform, the cleaning manufacturer sells their products directly to end consumers. This includes small business owners, contractors, and homeowners. The manufacturer diversifies their customer base, captures new market opportunities, and develops brand awareness.
Expanding your product range is straightforward, too. Once a product is ready to go to market, the process of launching it to your eCommerce store is seamless.
Curate a modern shopping experience
Remember the days of trawling through product catalogs and bookmarking the products you wanted to order? For buyers, this is often the reality of their day-to-day dealings with manufacturers. Not anymore!
Manufacturers selling via digital D2C channels – such as a modern eCommerce platform or marketplaces – have more options to customize the customer journey. This is because the best modern technologies feature:
- User-friendly interfaces
- Personalized product recommendations to convert browsers to buyers
- Flexible and fast payment options for a seamless checkout experience
Ultimately, a seamless transaction coupled with a personalized experience will create lasting relationships with customers. Digital transformation for manufacturers means end-users will enjoy shopping with you and keep coming back for more!
In some cases, manufacturer products are emailed (or even faxed!) and manually sent to the supply chain. These old-school business models aren’t up to scratch. Not only that, but they’re really slow, too!
By opening a D2C channel, you equip yourself with a direct and shorter route to market. In other words, breaking away from the traditional supply chain means manufacturers have fewer messy lines of communication to juggle.
In addition, eCommerce platforms provide manufacturers with autonomy and flexibility in the decision-making process. With fewer layers of decision-making and shorter approval times, traditional B2B manufacturers launch new products more quickly. With digital transformation for manufacturers, complex procurement processes and contract negotiations are a thing of the past.
How to Develop Your D2C Digital Transformation Strategy
Before undergoing the lengthy process of trialling eCommerce platforms and other digital transformation solutions, it’s important to develop a solid digital transformation strategy.
Digital transformation for manufacturers: Define your strategy
Yes – there are clear benefits for manufacturers by going D2C. However, it isn’t for everyone. Digital transformation requires dedicated investment in technology and commitment throughout the business. It’s best to think of the digital transformation process as a marathon, not a sprint.
In addition, you need to make sure your technology suits your team, C-suite executives, and – most importantly – the end user. Understand the barriers of digital transformation for manufacturers before realizing if it’s a worthwhile process for your business.
Are your products the right fit?
Not every B2B manufacturer will have the right product. It’s important to take an honest look at your products before diving in.
Are you a B2B manufacturer specializing in producing industrial-grade turbine blades used in aircraft engines? This sector requires specialized knowledge, advanced technology, and strict quality control measures. In this context, D2C sales wouldn’t be appropriate
Do you make gym equipment – such as resistance bands and dumbbells – and typically wholesale your products to local gyms? Selling excess stock via a D2C channel to tap into the popularity of home workouts would work perfectly.
Consider your audience
A successful digital transformation strategy puts customers at its core.
Remember, in this day and age, customers want a sophisticated, user-friendly buyer experience, with short delivery times. Modern consumers expect to purchase products from your store as quickly and efficiently as possible. You have to prioritize this in your digital transformation strategy.
From a customer service point of view, D2C shoppers have different demands. For instance, consider your post-purchase support carefully. So, if a customer wants to return a product, you need to establish the infrastructure to make the process as smooth as possible.
With a typical B2B sales cycle, you might offer long-account management and contracts. With a D2C sales model, you should choose to implement loyalty programs and source feedback through customer surveys.
Digital Transformation Technology: Develop an eCommerce Platform
Traditional/Monolithic vs Headless/Composable
It’s important to determine the architecture of your D2C manufacturing software. The common binary is between a monolithic approach and a headless system. Let’s have a look at how the two digital technologies stack up:
eCommerce Platforms for D2C
Below are examples of eCommerce platforms Pimberly manufacturer customers use. Below, find a selection of monolithic and headless solutions:
Tap into Marketplaces
Marketplaces such as Amazon, eBay, or ManoMano are great places to sell excess stock by tapping into their huge ready-made audiences.
In fact, if you don’t sell products through marketplaces, you’re missing out on 63% of customers who start their product searches on marketplaces.
Level up your digital marketing
Digital marketing is key to D2C success. Manufacturers should leverage essential marketing tools to drive brand awareness and capture new audiences.
Let’s look at an example of digital transformation in the automotive industry. The company specialize in producing engine parts and suspension systems. Their D2C target audience includes hobbyists and DIY enthusiasts, vehicle owners in need of replacement parts, and small workshops. Here’s how they use digital marketing to grow their D2C channel:
Establish a strong web presence
This is in the form of a user-friendly website to showcase their product catalog. The website also includes installation guides and videos.
In addition, they set up a Google Business profile with key contact information. From here, they also encourage customers to leave reviews to develop trust with potential customers.
Because their audience is active on Facebook, they set up a Facebook page to showcase and sell their products directly via Facebook Shops.
Remember: digital transformation in construction will be different to the automotive sector. There might be some overlap, but it’s important to really drill down into your target audience’s behaviour.
Online advertising is key
They use online advertising – such as Google Ads – to reach potential customers. Compelling ad copy coupled with high-quality images drives traffic to their website.
Engage with influencer marketing
The automotive manufacturer contacts automotive bloggers and YouTubers with large followings to demo their products and share their experiences. This doesn’t just have to be high-end fashion brands!
Review and adapt where needed
The work doesn’t stop here. As your D2C arm continues to grow, it’s important to adapt to market changes. To do this, continuously gather feedback from consumers and track customer satisfaction through social media and customer reviews.
Key metrics to track include website traffic, conversion rates, average order value, customer acquisition cost, and customer retention rate. Regularly reviewing these metrics will give you insight into what’s working – and what isn’t! For a comprehensive breakdown of eCommerce KPIs for your business, click here to access our whitepaper.
From increased brand awareness, and improved customer relationships, to increased profits. B2B manufacturers with a strong D2C sales arm will reap rewards
However, Rome wasn’t built in a day. B2B manufacturers need both feet in the future to successfully operate a D2C model in tandem with their B2B sales channel. Juggling the two is near impossible without the right infrastructure and focused approach.
Digital transformation for manufacturers is a process requiring business change and digitization to unlock growth opportunities. In the long term, the benefits of digital transformation to develop a D2C approach will transform your business for the better.