Digital Marketing

Why should wholesale brands switch to direct-to-consumer eCommerce?

Brands of all sizes have the opportunity to make a shift to direct-to-consumer eCommerce models due to growing consumer demand for personalized goods and services. DTC brands can have complete control over the image of their brand in a highly competitive market. They don’t need to rely on others and can present their products directly before their customers. They can take control of the relationship with their customers and nurture it to increase business profits. A consumer will be more satisfied if they have an active relationship with the brand.

What kind of growth can a DTC wholesale company expect to see if they intend to switch?

Let’s take a look at some facts and figures. Statista published statistics that show that the direct-to consumer market for digitally native brands in America was $27 billion in 2020. According to market experts, these figures will rise to a $44.7 trillion mark by 2023.

Do you think this means that DTC eCommerce is poised for growth? E-marketer has published a forecast that the global retail eCommerce market will grow by 16.8% to $4.921 trillion. Gartner also states that 80% will be done via digital channels in B2B sales interaction between sellers and buyers by 2025.

These are some impressive stats, but there may be questions about consumer behavior. Many wholesalers are now turning to DTC models because they see a lot of customers using online platforms to buy products. Conventional marketers once saw the conversion from B2B wholesale business model to retail business model as a way to increase profits on each sale.

This industry now recognizes direct-to-consumer eCommerce as a way to win over competitors and grow. While marketers often talk about the advantages of retail vs wholesale, we will focus on the DTC eCommerce model. For more clarity, let’s take a look at the benefits of converting your brand to a DTC eCommerce business. Before we move on to the next section, it is important that you ask yourself some questions. Are you ready to provide the customer satisfaction required by DTC brands? Take a look at your current situation and consider the answer.

What are the benefits of switching your wholesale brand into a DTC-brand?

Before we get into the details of direct-to-consumer, let’s first discuss the current state of wholesale brands. Many wholesale brands are facing fierce competition in the retail space today, and there will be more. Businesses used to compete against 3-4 brands when the internet wasn’t the most popular place to shop.

Although the retail shelf space was not crowded, it has changed drastically. Today, brands face hundreds of competition from both online and offline businesses. Retailers face challenges in delivering their products while spending a lot of money due to rising land costs and the increasing price per square foot. A smaller brand will struggle to sustain sustainable growth. Many wholesale marketing strategists recommend that owners look into the potential of DTC.

Elevates your sales

Your brand could experience a decrease in real estate sales as the regular retail sector becomes increasingly congested. Your losses may be higher than those of other retailers. This is where the DTC eCommerce model can be a huge opportunity to recover sales you have been missing. Let’s say your company has not faced this problem. If this is the case, then you should know that DTC offers better options to remove many barriers that are present in traditional retail.

Direct channel communication with consumers allows you to find new ways to target and reach them. This opens up new opportunities for you to grow your customer base or sales volume. A great advantage of wholesale DTC brands is the freedom from geographic constraints that traditional retail stores often face. We conclude by saying that a direct-to-consumer model is able to reach high-value consumers beyond the reach of traditional retail stores.

Pricing Control – Get total control

Direct-to-consumer eCommerce is not only about your business’ potential growth, but also gives you total control over pricing. Brand managers can curate attractive promotional offers, discounts, or incentives because they have complete control over the product price. It will allow them to increase their customer acquisition, improve their customer retention and loyalty.

Your brand identity is strengthened

The consumer behavior is changing rapidly. Customers are now looking at brands through a microscope. They are carefully monitoring the quality of their products and services. Buyers expect a brand to provide a complete package, with superior quality and a great customer experience from awareness to purchase. You can control the entire customer journey once you adopt a DTC approach. Inefficient business operations and poorly trained staff are two major reasons wholesale brands fail to deliver seamless customer service. You can overcome these obstacles with a wholesale DTC model to create a customized customer experience.

Establishes a stronger connection with customers

DTC offers the opportunity to develop a close relationship with your customers. Multiple eCommerce platforms allow these brands to collect and analyze consumer data and offer highly personalized shopping experiences. Your business can use smart consumer data to improve the one-on-1 shopping experience. Your brand will be more successful with this level of customer experience.

You can tap into new markets and products

The investment required to enter a new market in direct-to-consumer models is much lower than that of a wholesale retail store. An eCommerce DTC framework makes it easier to reposition your product or business in a new market. It also reduces risk and investment.

Takeaway

You must now have a good understanding of the potential benefits to direct-to-consumer eCommerce. You’ll face new challenges, but you’ll be better able to manage them. DTC offers many opportunities for owners to increase their sales, revenue, growth, and profits. These benefits are difficult to find in a wholesale marketing plan. If you want to grow in this area, you need to start working today.

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