How D2C can help your business through the recession

There’s no doubt that online shopping continues to capture the hearts and wallets of consumers. Even as the pre-vaccination measures of the pandemic fade away in the rear view, many of the online habits picked up in lockdown are here to stay.

Take Europe, for example. Total European e-commerce reached €718 billion in 2021, with a growth rate of 13%. In 2022, that figure grew to €797 billion. That’s a lot of online spend for a continent of around 740 million people.

In times of recession, consumers are even more focused on bagging a bargain, receiving better service, and having a deeper connection with their chosen brands.

That’s where your D2C sales strategy comes in.

When you adopt a direct-to-consumer approach, great things begin to happen. Not only will you create a lucrative new revenue stream, with improved margins, you’ll also appeal to additional consumer segments and attract new customers. As a result, a sizeable slice of your D2C business could be additive, rather than just cannibalising your existing channels.

And there’s already an active pool of consumers, seeking out those D2C purchases. In the US alone, D2C sales are expected to have achieved $151.2 billion in 2022, which is an increase of 16.9% on 2021[ii].

There’s a similar trend moving through Europe, too.

In the UK, D2C sales delivered £96 billion to manufacturers in 2020. Fast forward to 2023, and that figure is expected to grow to £120 billion[iii]. What’s more, in a UK survey, almost three in every five people said they frequently go direct to manufacturers[iv], because they believe they will get a better price and improved service.

Across the globe, some leading factors that motivate shoppers to buy directly from brands[v] are:

• Better price (49%)
• Free delivery (47%)
• Free returns (35%)
• Fast and convenient (34%)
• Loyalty program (25%)
• Exclusive products (23%)
• Better information about products (22%)

When you implement a D2C strategy for your business, ensure that you bring some of these consumer motivations and expectations into play.

Beyond the opportunities that come from tapping into a new audience, taking the D2C route will also allow you to improve your margins, strengthen your decision making, and build brand loyalty.

Improve your margins with D2C

When you choose to deploy a D2C strategy, you remove all those channel intermediaries and retailers. With fewer agents and distributors taking their percentage, your profit margins will grow. As a manufacturer, all of a sudden you’re selling at a retail price rather than at wholesale.

That means you’ll even be able to offer consumers a better deal, while still pocketing a bigger profit.

Strengthen your decision making

With a D2C approach, all that direct contact with your end users means you’ll have a much stronger handle of what consumers really want. That’s because your D2C e-commerce store will provide you with key insights that were kept from you due to the number of intermediaries between you and the consumer. All that juicy data used to reside with retailers.

Now, you’ll be able to use all that info to improve your existing products and develop new lines. You can identifying personas based on buyer demographics, purchase frequency, average order value, and more. From there, you’ll know how to create the types of promotion that really grab your audiences and compel them to spend.

Plus, using product ratings, feedback and reviews, you can make improvements and identify new market extensions, upsell opportunities and cross-sell opportunities.

Build brand loyalty

Not only does all that data allow you to understand your audiences better. It also builds brand loyalty. Having that direct connection with your audience means that you know what entertains them and what keeps them engaged.

With the right e-commerce platform, you’ll also be able to identify your different types of buyers and serve up highly personalised content. And once you build a satisfied customer base, you can focus on turning them into brand ambassadors and advocates. D2C really can have a hugely positive effect on any consumer brand manufacturer’s future prospects.

Take a closer look at D2C

If you’re looking for ways to safeguard your business against the rigours of recession, then perhaps it’s time to explore D2C in more detail. But before you start, you’ll need to know whether you’re ready for D2C, and how to make the move from B2B. Luckily, it just so happens that we’ve got all the answers for you.

To learn more about the D2C advantage, for expert advice on the best route for your business, or just to get to know us a little better, why not get in touch and we can talk you through the detail. Or you might just want to wander through our blogs and our new comprehensive guide on going from B2B to D2C. Whatever works for you, works for us.