How Artificial Intelligence Boosts Direct-to-Consumer Results
It’s not that I disagree. It’s just that I’m gobsmacked it’s a topic in the first place.
There’s nothing new about Direct-to-Consumer (DTC). I remember catalog shopping with an 800 number every Christmas for years. What is new is thinking it’s a business model that operates outside the rules of retailing and delivers magical results.
Even for brands who rely on major retailers to reach large numbers of shoppers, there’s no denying the allure of DTC. What’s not to like about having a direct relationship with your customers while also shortening the delivery chain.
Metrical has no dog in this fight. We count both well-known DTC brands as well as major retailers as customers. And these experiences have provided some valuable lessons that any DTC brand – or those contemplating a DTC play – can learn from.
For starters, having a popular brand doesn’t automatically translate into online success. Brand love alone isn’t enough to consistently drive sales and ‘style and vibe’ along with a clever website can’t paper over shortcomings in areas like fulfillment.
It’s easy to overlook or minimize the amount of effort and expense needed to accept, fulfill, deliver and support hundreds and thousands of direct orders. DTC introduces new operational processes different from the traditional wholesale-retail model.
Now it’s all about ensuring shoppers are presented with the right product, at the right time, at the right price and then guiding them to fill their cart and make a purchase. Just like every other retailer.
Driving sales without giving away margin. Creating an individual experience that enhances loyalty but doesn’t compromise privacy. Ensuring marketing investments are delivering a positive ROI. These are just a few of the core issues DTC companies must own an implementation level.
With DTC brands facing the same challenges, they need to be deploying the same solutions mainstream e-commerce companies employ, such as an AI-based engagement platform that can analyze shopper behavior in real-time and offer up relevant messages, offers, substitute products and as a last resort, discounts.
Data is key but how it’s modeled and used is where the value lies. Here’s where brand manufacturers can really understand their end consumers. This type of market intelligence bolsters the development of new features, products, or pricing. It also creates some balance with large retailers. Just as the big retailers are evolving their in-house products, forward-thinking brand manufacturers can harness their own direct-to-consumer distribution capabilities.
DTC can be a successful undertaking provided brands avail themselves of the same analytical and UX tools that have proven successful in mainstream retailing.