- Let’s start with the basics. Why is D2C having an important moment? Why now?
[Caroprese, Antonio] D2C has been making significant strides the last five years or so. Companies started to realize that technology was easy to implement and integrate, that enabling online channels didn’t jeopardize their indirect sales when using the right strategy, and that they see improved margins leveraging their own online channel. COVID massively accelerated the trend and more companies got onboard. However, I do expect that for the companies that did it too aggressively during the last one-and-a-half years, they may have to revaluate some of their decisions so that they can continue to grow the channel effectively. The main benefits of establishing a direct channel are clear but hard to implement. For example, with your own channel you have full access to own your customer data, the decisioning, and the experience. That means that the expectations from customers are higher.
- What are some of the most common, initial challenges brands can face when they assume the responsibilities of a D2C relationship with their customers?
[AC] First of all, for many brands it requires a mentality change. The motions and behaviors you are accustomed to in your B2B channel are not the same as in D2C. In D2C, the pace of decision making tends to be faster. Also, in D2C, the experience must extend beyond a pretty user experience on your website or mobile app. The experience includes the kind of box in which your product(s) is delivered, the frequent notifications updating where the product is at all times, and the way in which your customer service reps answer the phone or reply to a chat message. All of these combined form the basis of the feedback your customers will have about your brand and their wilingness to come back and continue to do business with you. But it goes beyond the customer. Brands need to think about the experience for their own employees. How easy is to introduce a new product? Employees have to be motivated to come to work and know that they can deliver to the promise of enhanced customer experience.
- D2C over time brings a lot of data aggregation in-house. What should brands consider about their internal infrastructure before making this leap?
[AC] Security! Data is the holy grail of the digital age. However, brands have to create a secure environment for all of the new data coming in. Once security is in place, the question is, how do you make use of all that data in real time so that it can be activated? When leveraging new customer data platform technologies, brands can consolidate customer data together with transactional, behavioral, and any other third-party data into a single model. Subsequently, they can apply machine learning and artificial intelligence models to activate the data in real time.
- You’ve said that embracing D2C at scale is not so much a project as it is a journey. Can you elaborate on this?
[AC] D2C is not a one and done type of project. The organization has to transition to an Agile mindset for all aspects of D2C, including technology implementation, business operations, marketing, and more. Start small, focus on what’s important, create a feedback loop, and improve over time and in small increments. See what’s working and invest in those areas, and reduce investments in areas with little return. Even your investment cycles need to be Agile. Set targets and budgets in quarterly increments and be flexible with those. Some quarters you may need to invest more and some others less, but the returns will be more visible faster. Brands that adopt an Agile mindset are the ones that will survive in the long-term in the new digital first economy.
- What are some key ways that customers benefit from direct relationships with brands?
[AC] When a customer engages directly with a brand it creates a feedback loop that allows brands to create experiences and products that are more tailored to the customer personality and desires. Customers then become more loyal brand advocates. Their engagement with your brand goes beyond a single transaction and they are happier because of it.
Antonio Caroprese is a partner at Deloitte Germany and serves as the Adobe Alliance Lead. He helps clients design and implement enterprise grade digital solutions and has worked with leading high tech and media clients with direct-to-consumer efforts that cover the full spectrum of technology implementation, customer acquisition, supply chain, organizational design and cyber security. Antonio is also a thought leader in agile adoption and implementation best practices driving to superior business outcomes.
U.S. contact: Andrew Fitz-Earle