Why CPG Brands Are Going Direct to Consumer (D2C)
In 2019, a new generation of disruptive CPG brands are shaking up retail. These savvy manufacturers have decided to shirk tradition and take control of their brand by marketing and selling their products directly to consumers using eCommerce, without a middleman in sight!
These brands have realised that to stay relevant and thrive in an era of changing consumer expectations, it’s become critical to innovate outside of the traditional B2B business model. And they’re using a digital direct-to-consumer (D2C) model to provide them with that competitive edge and add value to their customer relationships.
Why are CPG brands are going D2C?
When brands were being sold exclusively through retailers, buyers were customers of the retailer and not of the brand. This meant, brands couldn’t directly communicate with those individuals (e.g. email them relevant brand updates and incentives), which was a huge missed opportunity.
Moving to a D2C model offers brands the opportunity to take back control of their brand (e.g. how it’s marketed) and the customer relationship (e.g. the customer experience) – which affords brands the opportunity to reconnect with their customers and create true brand loyalty.
Which brands are using D2C successfully?
At the International Sleep Products Conference in 2015, one speaker likened buying a mattress to “purchasing a kidney on the black market” – a messy and unpleasant customer experience. Casper didn’t want to be seen as a typical mattress company. They wanted to deliver a first-class customer experience. So, instead of leaving the fate of their brand in a retailer’s hands, Casper chose to take full control of their brand and market and deliver their mattress to customers directly, using a digital D2C model.
The key to Casper’s D2C strategy has been SEO. The brand began creating customised landing pages for every conceivable keyword people could use to search for and buy a bed.
For example, they created a landing page just for NYC and made sure that anyone searching for terms like “buy mattress NYC” would see it at the top of their search results. The ad was customised specifically for NYC unlike any of the other resulting ads were. Buyers were told they could get their mattress that day within a one-hour window, and that Casper will help them set it up and even take away the packaging – which delighted buyers and meant the clicked through in their droves.
Casper also recognised and understood the power of social media as a tool for successfully reaching potential customers directly. So, they reached out to various Instagram and Twitter influencers to create some high-level buzz around their mattress. The brand even opened a satellite office in Los Angeles with the main objective of getting more influencers on board! And it was worth it. When Kylie Jenner posted a picture of her new Casper mattress in March 2015, it received over 850,000 likes and instantly doubled Casper’s net mattress sales.
The D2C model helped Casper get to $1M in sales in their first month and $100M within their first two years, and the brand continues to grow.
Perfetti Van Melle
With globally recognised brands such as Mentos and Chupa Chups, selling products through brick and mortar stores had been the traditional root to market for Perfetti Van Melle (PVM). However, in 2016, the brand recognised that the consumer landscape was changing. So, they made the decision to focus on D2C efforts and improve the online experience for consumers. A large part of that strategy was the introduction of Where to Buy Now technology into their brand sites.
The food & beverage industry traditionally relies on impulse purchasing. However, with fewer consumers shopping in-store, PVM needed to take back control of their brand sales. By hosting Buy Now buttons on 20 of their brand sites and social media channels, PVM hoped to take advantage of opportunities to sell their products at every brand engagement and influence engaged consumers by pushing them down the purchase funnel when purchase intent was high.
And it worked! According to David van der Lei, PVM’s International Trade Marketing Manager, “With Buy Now technology we have enriched the consumer experience. Buy Now buttons are completing the consumer journey online, providing convenient options to purchase our products through a choice of retailers“.
3 things brands need to go D2C effectively
While more and more brands are increasingly pursuing D2C initiatives, success using the method is not guaranteed. So, what can CPG brands do to increase their chances of D2C success?
Create a good website
Convenience is key for consumers. Ensure the process of searching, finding, and buying a product on your eCommerce site is quick and easy for customers. Among the most basic of requirements for a good eCommerce site are:
- A mobile-friendly design – remember, 79% of smartphone users have made a purchase online using their mobile device in the last 6 months.
- Detailed, accurate product information – provide enough relevant information with each product listing for the consumer to make a decision e.g. measurements, sizing, material etc.
- Quality product imagery – you’re trying to make up for the fact that the product is not in customers’ hands like it would be during a traditional shopping experience. Have a gallery of at least 4 images per product.
- Robust search and discovery tools – make it easy for customers to find what they’re looking for with good website navigation and filtering options.
- Fast page loading – 53% of people will leave a mobile page if it takes longer than 3 seconds to load.
- Frictionless checkout – lengthy forms and a lack of secure payment options put shoppers off.
Provide a great overall customer experience
Successful D2C brands think about the customer journey from start to finish and how they can delight their customers and live up to (or exceed) their expectations at each stage.
Consumers expect personalisation. In fact, most consumers say they’re more loyal to brands that understand them and provide good service. However, it’s not necessarily personalised offers they expect. Consumers simply expect you to know who they are and to use that data to serve them.
For example, by being aware of past/repeat purchases and any issues/problems the customers may have had in the past. Use analytics to discover your customers habits.
Consumers expect every interaction they have with a brand to be shoppable – web, mobile, social, in-store. Utilising Where to Buy technology will ensure that no matter where shoppers interact with your brand, they always have the option to purchase immediately from a variety of different retailers.
Customers expect orders to be delivered quickly, undamaged, and at low or no cost. They also expect a hassle-free return or exchange process. Living up to these expectations can be surprisingly challenging – especially for CPG brands used to sending large shipments to distributors but have limited experience dealing with individual consumer orders.
Customers expect to be able to access good customer service when and where they want it. Chatbots, when utilised on both brand sites and brand social media channels like Facebook Messenger, are a great tool for ensuring your customers have the help they need 24/7.
An excellent digital marketing and social media strategy
Successful D2C brands know the importance of delivering the right kinds of engagement, to the right consumers, at the right times, as they make their customer journeys. Here’s 3 digital marketing efforts you should be focusing on:
Most of your eCommerce traffic begins with a search engine and 67% of that traffic goes to the first 5 results on the search engines results page. Which is why it’s vitally important for your brand to display as high as possible on the first page for what your target audience is searching for.
Take a leaf out of Casper’s book and start researching which keywords your target audience are searching for when they’re ready to purchase your project and create content, landing pages, paid search ads, (or whichever is relevant for your brand) to house those keywords and drive traffic to your site.
The customer journey doesn’t end once the customer makes a purchase. A key aspect of D2C is building customer relationships. And one of the best ways to build a customer relationship is through email marketing after a customer has made a purchase. There are several things you need to do to build effective relationships through email, here are just a few quick pointers:
- Write emails like you’re talking to a single person.
- Keep it brief.
- Ensure every email provides value to the recipient.
- Automate where you can
Platforms like Facebook and Instagram are where consumers are hanging out online and there are 2 ways to connect with them in these spaces:
- By building virtual communities with regular, engaging posts.
- By using remarketing tools to target individuals based on their likes and dislikes and on more specific factors like whether they have visited your site before or added items to but abandoned a cart on your site previously.
Our consumers expectations are changing. To keep up with them, CPG brands must innovate outside of the traditional B2B model they have relied on so far. Going D2C allows CPG brands to take back control of their brand and create a meaningful (and profitable) customer relationships.
If you’d like to learn more about how eCommerce has impacted the CPG industry, including our brands like Perfetti Van Melle, Unilever, Reckitt Benckiser and many more, book a demo now!