A traditional business model follows a pattern where the manufacturers produce the products that are sent to the wholesalers and then to the distributors, retailers, and finally to the consumer. The cost of this path gets added to the product cost. This is still the dominant pattern. However, small businesses and entrepreneurs who are the producers are now willing to forgo the cumbersome mediated path and reach their customers directly.
Their preferred business model is direct-to-consumer or D2C. Thanks to the internet, various e-commerce sites as well as social media, small and local businesses are directly selling their products to their customers.
D2C is essentially a customer-oriented approach that can ensure customer interaction, consumer satisfaction, customer retention, and brand loyalty. Businesses can reach their target audience much more effectively and ensure that margins earned via D2C selling are much higher than selling through middlemen.
Most small businesses also suffer from brand identity and authenticity issues when they sell their products through wholesalers or retailers. Individual products get lost in the vast array of products marketed by the wholesaler or retailer. Direct-to-customer marketing solves this as they are able to directly reach their customer and create a direct impact on their buying pattern.
D2C marketing is mostly used by local businesses dealing with FMCG products, fashion and apparel, cosmetics, local handicrafts, and accessories. When Soapian Artisans, www.soapianartisansoaps.com the organic handmade soap business, was started by the mother-daughter trio of Asha Agarwal, Yutika Agarwal, and Vedhika Agarwal, they faced marketing challenges. However, they were able to reach their customers via online marketing. “Marketing is a challenge. Currently, our products are marketed on social media handles and by word of mouth. We are looking for help and tie-ups to improve our marketing reach,” says Vedhika Agarwal.
Here are a few ways how various platforms can help small and local businesses in D2C marketing.
Influencer marketing: The role of influencers is becoming bigger with the growth, expansion, and popularity of social media. Influencers are people who generate social media content and have huge followers, sometimes in millions, comprising people from different nationalities, races, religions, and ethnicity, all connected because of a common interest or liking.
Influencer marketing is about identifying and connecting with the right influencer who might help deliver your message to your target audience. They promote your product and brand and create goodwill amongst their audience.
Influencer marketing is beneficial as you are in direct touch with the person promoting your product. This relationship can become a long-term partnership. The influencer in turn is in direct touch with the people that they are trying to influence to use your product. Because the influencer is in direct contact with the audience, their message is perceived as authentic.
Facebook Marketing: Facebook with more than 2 billion users can be your go-to place for D2C marketing. Apart from maintaining an account of your brand and product, Facebook lets you post advertisements against a payment. Facebook allows you to reach and zero down on your specific target audience.
The steps that you need to create a successful Facebook campaign are:
1. Define your target audience. You must be aware of your target audience’s age group, interests, and demographics.
2. You must be clear about your goals. Do you want to create brand awareness or spread product knowledge?
3. Optimise user experience by giving specific details in your ads and sharing relevant images.
4. Come up with campaigns that let users share their experiences and engage with the brand.
Selling via eCommerce platforms: Ecommerce platforms can be one of the best bets in D2C marketing for local and small businesses. This can be done in two ways: one sell via existing eCommerce platforms, and two sell via their own eCommerce site.
Selling your product via an eCommerce platform is beneficial as you can formulate data-driven strategies to reach a specific audience. Online sales also let you engage or converse with the customer directly.
However, selling via an existing platform like Amazon can also give you competition from an experienced retailer. In such a scenario, you can create your own eCommerce site to boost online sales. While the competition is reduced, you have total control over your marketing plans from packaging to shipping. Also maintaining customer relations and handling negative reviews is more manageable on your D2C eCommerce site.
Sell via Dedicated D2C Platforms Like Swiggy Minis: Swiggy, the popular food delivery platform can now become the best friend of home cooks and local bakers as well as small local businesses.. The food-tech and food delivery platform has been delivering food items from local eateries, and restaurants as well as groceries.
The platform has in 2022 announced a direct-to-consumer (D2C) subsidiary named Minis. The venture is aimed to provide visibility and access to small businesses. Here a small business owner can sell the products without paying a commission to the platform. Charges for payment gateway and delivery however remain. The app is similar to Swiggy with the added feature of customers being able to like your store and chat with you.
Post the pandemic, even the most tech averse have embraced shopping online platforms. E Commerce grew by 80% in the first 2 months of the pandemic. Retailers are eager to seize the new market created by online shoppers. Small businesses can make the most of this trend as research suggests that 55% of consumers prefer to shop directly from brand manufacturers over retailers.