The global pandemic prompted an accelerated shift to online shopping, with consumers looking to digital channels to purchase goods across more categories than ever before.
Benchmarks and expectations have increased for seamless convenience, delightful experiences and unique offerings. In response, consumer goods companies are running direct-to-consumer (D2C) experiments across brands to protect market share against their established peer competition, rising start-ups and e-commerce players, like Amazon.
While experimentation can be an effective way to bring new products and services to market, it’s easy for brands to lose sight of the best opportunities for their business, making D2C decisions based on new trends or competitor success as opposed to objectively determining the right path based on their unique position in the market or the state of the market itself. What worked for one brand may not always work for others, and this approach increases the risk of D2C endeavors gaining little traction or falling short of return-on-investment expectations.
“On one hand, it’s good that brands are doing experimentation and getting things done in an agile way – but experimentation needs to be guided and structured,” Jana Kasper, senior principal, management consulting, Publicis Sapient, said. “There needs to be a standardized approach across markets that brands can apply to determine what’s right for their business and what will make them stand out in the market.”
As brands begin their D2C journey, it’s important for them to start with an assessment of their business readiness, defined by key parameters that will enable them to test and validate their strategy in a holistic way. By evaluating both external and internal factors, brands can confirm their top-down D2C strategy by identifying the most attractive combinations of markets and brands.
“It’s really looking at the business from both the inside out and the outside in,” Jana Kasper said. “Outside in is about observing the market, customer habits and market dynamics as selected driving forces. Then, you have to understand your specific brand to see if there is a match.”
For example, a product or brand may not be right for D2C if the engagement across digital channels is weak or if overall brand strength is low. A particular product may be more suited for other channels, challenging brands to examine their offerings and define which categories will allow D2C to deliver the most value for both customers and the business.
At Publicis Sapient, we’ve defined four questions every organization must ask as they determine the right path to launching a successful D2C initiative.
