Pricing and loyalty strategies executed by brand manufacturers pose the biggest challenge in their direct to consumer (D2C) uptake, a new report from digital services enabler, Mobiquity in collaboration with Spryker, has shown.
How to win big in a competitive D2C market, reveals only 27% of brand manufacturers are using effective loyalty and sales models, such as scarcity conversion optimisation techniques and personalised pricing, in order to reap the benefits of having a D2C channel, meaning the remaining 73% are falling short.
Undertaking a qualitative survey with executives from global brand manufacturers including Nike, Adidas and Dollar Shave Club, the report highlights the shortfalls and subsequent opportunities for successful D2C activation.
Customer service and support was the second largest shortfall identified in the report, with 38% of D2C companies failing to meet basic service and support criteria, such as always-on live chat functionalities.
Key drivers for D2C activation revealed that the second biggest incentive behind opening a D2C channel is to gain more insights on the needs and behaviours of their shoppers — the first being to generate a new revenue stream.
Mobiquity Asia Pacific general manager, Gustavo Quiroga said the survey highlights a key gap between brand manufacturer drivers for D2C deployment and their executional shortfalls.
“Our report highlights the desire for brand manufacturers to know their customer better through a direct sales approach, but what we found is that almost three quarters of companies (73%) are blindly missing an opportunity to do exactly that with brand loyalty programs,” Quiroga said.
“To truly stand out from the competition, brand manufacturers must adopt a user-centric approach to D2C and leverage basic tactics such as personalisation. This begins with the development and execution of an effective loyalty program, which allows users to set their criteria and disclose information based on their likes and dislikes, essentially feeding the platform that delivers a personalised and memorable experience — it’s a win-win for manufacturers and customers alike.”
Opportunities to optimise delivery and returns (39%), MyProfile (40%) and payments (50%) rounded out the top five D2C shortfalls identified in the report. User experience and interface (78%), sales funnel (74%) and product information (61%) criteria performed strongest among the global D2C respondents.
Mobiquity assistant vice president, Yogesh Johar said the report confirms that the opportunity is ripe for brands to enlist loyalty programs and leverage their gravity with customers.
“Loyalty is an important tool to build brand equity. It is a fact that large businesses focus on explicit loyalty programs, but it is equally important for small- and mid-level organisations to take advantage of. Depending on spending power, this can be enabled via a bespoke loyalty program or loyalty platform, that nowadays is readily available for adoption and integration. It is definitely a great way to reemphasise brand messaging, gather feedback, and re-gaining customer loyalty,” he said.