Digital transformation: technology at the service of retail

Experience will be the word that will serve as a guiding thread for the reflection exposed in today’s article. In addition to being a simple idea, today it is a protagonist in the business world and debated in thousands of meetings on consumer behavior, digital world, connection with customers, sales, conversion and results. And it is precisely in the convergence of all these themes that the relationship between experience and direct-to-consumer.

Product and customer: this is one of the most important connections in the retail world. And when this connection is masterfully made, the sale becomes almost organic, that is, the customer is driven by some action, but decides to buy almost naturally. The product becomes, more than a need, a desire motivated by a relational experience.

It is in this scenario that the direct-to-consumer (D2C) becomes an effective tool. From a conceptual point of view, D2C is a strategy that some companies use to sell their products directly to the customer, without the need for a retail intermediary. This option has been greatly enhanced by technology with the emergence and improvement of e-commerce sites and sales through social networks.

E-commerce presented us with a low-cost, low-complexity sales channel. At the same time, social networks have become a new way of establishing a direct relationship between product and customer through a union with scale and personalization. The two channels, acting in this way, build an indelible experience that, in a subtle but extremely effective way, leads the target audience to get even closer to their objects of desire: brands and products.

To the extent that a consumer creates an “emotional connection” with a brand or a product, especially through experiences lived in the digital world, the relationship strengthens and becomes very difficult to break. The customer may even admit that the competitor’s product has some better features, but he will prefer to stay in a trusted, familiar, comfortable place: a place where he recognizes himself.

If we draw a parallel with the physical world, we can compare the experience of being a loyal customer of a restaurant or a bar, where the waiter knows you by name, where the managers always leave a special table reserved, where the food always comes with more attention. . You can even find a cheaper restaurant or with a specific dish to your taste, but nothing will compare to the experience you live every time you go to a well-known restaurant.

In the digital world, all this is part of the marketing strategy, and D2C appears as a key piece to reinforce planning. Brands like Apple, Amazon, Nike, Liv Up and Heinz are applying D2C and expanding.

The Interactive Advertising Bureau (IAB) listed the top 250 brands that invest in this strategy and presented some interesting numbers to serve as an analysis and dialogue on the topic:

  • About a quarter of brands investing in D2C invest in subscription models;
  • These brands achieve up to 25% retention on subscription models after 2 years;
  • Traffic from visits to “direct stores” has almost doubled in the last 2 years.

An important reality to consider in online sales is that there are many layers between the message that the company wants to convey with its products and the purchase process itself, especially when there are intermediaries in this path.

D2C eliminates these intermediaries and brings the sales focus to 100% on the customer. The strategy is designed with the objective of setting up the same flow and experience of the acquisition channels for a single store, that is, the path is straight from the store to the conversion.

Another important data concerns the profit margin. With the “elimination” of intermediaries, the margin increases and this gain can be passed on to pricing strategies, which can generate more competitive scenarios with competitors or even bring new investments.

The topic has not been exhausted in this article. However, a seed on this reflection was planted. At the very least, an experience on the subject, albeit a quick one, was lived. It is evident that each company has a reality and needs to know how to use D2C to maximize its sales and profits. Anyway, the most important point today is to talk about customer experience. How are we going to use this strategy in practice and how are we going to generate an emotional connection between the audience and the brand or product? The answer is not simple in practice, but it is necessary to take the first steps. And D2C seems to me one of them.

Renata von Anckën​ is VP Marketing & Sales​ at ​​Truppe!
Image: Shutterstock

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