The business model of D2C for another sales channel

In the current era, business owners face various challenges, both generally and especially those involved in physical and online product sales. One of the most fascinating business models that have emerged in recent years is called D2C. This model enables business owners who previously did not engage in such practices to establish direct contact with customers. Consequently, they gain access to valuable information about customers and products, directly manage marketing and branding efforts, and potentially increase their profits. This article will delve into what D2C is all about, discuss its advantages, analyze how large companies worldwide and in Israel implement it, and explore its relevance to Shopify.

Consultation

17-08-2023

By Ilit Serphos

3 min read

What is D2C anyway?

D2C, which stands for Direct to Consumer, refers to a business model where manufacturers or distributors, traditionally selling products through a third party, move to sell directly to consumers without going through retailers. It involves direct sales through digital channels and direct marketing to consumers. This differs from B2C, which stands for Business to Consumer, and refers to a business model where a company sells products or services to consumers, not necessarily directly. The main difference is that B2C refers to any company that sells products to consumers, while D2C is a specific model where the product is sold directly to the consumer without an intermediary.

Direct sales to the consumer mean that the supply chain is shortened and requires various operations, including advertising the products, setting up buying platforms, packaging, shipping, delivery, and customer service - all independent of external suppliers.

Benefits of implementing a D2C model for businesses:

1. Shortening the supply chain: When there is no need to involve third-party factors, the product reaches customers more quickly since it doesn't have to go through middlemen in the supply chain. This significantly reduces the time from manufacturing the product to delivering it to the customer.

2. Selling products unavailable in stores: The direct business model allows companies to sell products that cannot be found in physical stores, such as large or reduced packaging, unique products, or special offers for members of brand clubs. This enables offering customers a wider variety of products.

3. Direct customer contact: In the D2C model, a direct relationship is established between the brand and the customer without intermediaries. This strengthens customer relationships and creates a more personal and intimate purchase experience, fostering an emotional connection with the brand.

4. Receiving immediate feedback from clients: Direct-to-consumer marketing allows businesses to receive immediate feedback from customers regarding product quality and service. This feedback helps continuous improvement and swift problem-solving while taking full responsibility for the customer experience. It enables companies to promptly address any complaints or issues, maintain service and product quality if customers are satisfied, and identify areas for improvement regarding delivery quality and speed.

Why is Shopify the right choice for a company that chooses the D2C model?

Integrating a D2C model into a business can be done in various ways. However, there is no doubt that using Shopify store is the most profitable and effective option. Here are some compelling reasons:

1. Fast and affordable website setup compared to other platforms.

2. Cloud-based (SAAS) system that provides servers, updates, and security without manual maintenance.

3. User-friendly operating system, even for those without prior experience.

4. Advanced UI/UX based on millions of Shopify stores is integrated into official templates, encouraging action and purchase.

5. Shopify provides marketing tools like email marketing, campaign audience creation tools, logistics management, and B2B capabilities.

6. 24/7 customer service support.

How did Sodastream achieve it?

Sodastream distributes its products in over 50 markets worldwide and collaborates with large retail chains to sell its products at more than 90,000 points of sale. In recent years, alongside their B2B marketing efforts, Sodastream has also adopted a direct-to-consumer (D2C) business model in several countries globally. Their initial goal was to establish ecommerce sites in 14 markets, diverting resources to market these sites as an additional product purchasing channel besides physical stores. This move allows direct interaction between the brand and customers, facilitating the ordering of different products, replacing gas cylinders, and, most importantly, gaining insights into the user experience of Sodastream customers to enhance it continually.

At the time, choosing Shopify for a company as large as Sodastream was unconventional. Fortunately, they selected us, BOA Ideas, as Shopify experts, and we became their partners in establishing the ecommerce system on the Shopify platform on new markets through direct-to-consumer marketing. This resulted in a gradual and secure increase in sales.

Today, several years after Sodastream Cickoff, we can declare it as success in terms of information concentration and its utilization to improve the direct relationship with consumers.

In conclusion,

The direct-to-consumer (D2C) business model is increasingly popular among business owners to address digital age challenges. D2C allows for direct sales to customers without intermediaries, shortening the supply chain and fostering personalized customer relationships. Transitioning to D2C brings numerous advantages, including reduced delivery times, selling exclusive products, direct customer contact, and immediate feedback. Leading companies like Sodastream have successfully embraced this model.

Implementing the D2C model efficiently and easily can be achieved through the Shopify platform due to its low setup costs, user-friendly interface, and advanced marketing and logistics tools. With the assistance of a professional Shopify agency that offers experience, knowledge, and close support, businesses can quickly reap the benefits.

Interested in learning more? The experts at BOA Ideas are available to guide you every step of the way.

Writen by Ilit Serphos

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