Direct-to-Customer Commerce

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Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

9 Components of Successful Direct Commerce

These are the nine component systems, which should be in place, to execute a successful direct-to-customer retail commerce strategy.  The order is significant in only one point — marketing should be last.  But I’ve found this sequence is generally correct

  1. product master
  2. order management system
  3. single view of inventory
  4. warehouse management system
  5. product delivery
  6. content management system
  7. customer service
  8. web store
  9. marketing

In addition, this applies to e-commerce, brick-and-mortar, mobile, catalog — this is the infrastructure you need.

Filed under: Direct Commerce, multichannel commerce, Omni-Channel Commerce, , ,

More on Content Marketing

Content Marketing should prove that long copy sells.

It’s a myth that buyers don’t read long copy. In fact, buyers are the only people that read long copy — because they are interested. People who don’t read long copy are not interested in what you’re selling. So, don’t write for them. Write for the people who are interested in buying. They will self-select.

Filed under: Direct Commerce, Ideas, Omni-Channel Commerce, , ,

The Challenges of Direct-to-Customer Commerce

Where the market is today 

  • Direct-to-customer sales are growing faster than retail overall
  • The most profitable customers buy through multiple channels – store, catalog, online
  • Customers want a uniform brand experience across all channels
  • Debate of Sales/Use tax nexus and collections
  • Impact of shipping cost on order size, shopping cart abandonment
  • Advertising revenue for radio, newspaper is declining, while online ads are nearly sold out – based largely on the ability to target customers
  • Brands adapt to fit the direct-to-customer space

Where the market is going 

  • Channel conflict is losing its influence
  • As affluence increases, the importance of convenience grows
  • Direct-to-customer channel will continue to grow
  • Customers expect a online presence where they can research and buy
  • Customers expect to interact with the brand via email or online
  • Customers will post their opinions and stories about your brand online where everyone can read them
  • Merchants are still learning the nuances of customer acquisition, customer retention, life-time-value, and share-of-customer – all well established principles of direct marketing.

The problems of getting there…do it myself or outsource 

  • Running a direct-to-customer business is different than running a wholesale business or retail-store-based business.
    • Direct-to-Customer distribution is a different skill set than retail distribution
    • Assorted SKU cases v. unique SKU cases
    • Case picking v. Item picking
    • Residential delivery v. Commercial delivery
    • Merchandise planning
    • Demand planning & forecasting
    • Daily shipping deadline (when the truck pulls away)
    • Package presentation/merchandise presentation is important
  • Direct-to-Customer care is a different process than in-store service
    • Pre-sale product inquiries — what do these really look like and feel like?
    • Where is my order?
    • Returns & Exchanges
    • Anywhere, anytime
  • Direct-to-Customer technical systems operate on a different scale and at a different speed than retail systems
  • More exceptions, because we have less influence over customer behavior
  • Systems must support unexpected customer requests
  • Order volumes can be thousands per day, rather than hundreds per week
  • Pure volume of data explodes
  • Systems must be scaled and optimized to support intraday peaks of calls, orders, shipments
  • Use of multiple payment options especially the use Stored Value cards with credit cards.
  • Ability to customize marketing offers beyond the basic free shipping.

What you need to get there 

  • Execution expertise in the direct-to-customer supply chain
  • The ability to expand on short notice
    • Key stats on orders handled, calls answered, shipped sales, shipments
    • Network map
  • The ability to adapt your processes to support your brand
    • Technical integrations to web sites, ERP systems, data warehouses
  • Monitor and manage to meet or exceed your target Service Levels, improving customer satisfaction
  • Persistent effort to improve your processes and lower expenses

Filed under: Direct Commerce, multichannel commerce, Omni-Channel Commerce

Is show rooming a problem?

Well clearly, it is for some brick & mortar retailers.  At least they think it is.  It’s even reached the pages of the NYTimes (subscription required).

The NYTimes article even postulates that retail merchants should prepare a script of what to say when they catch customers using their store as a show room.

This is a losing battle.

Customers are going to use your store for a show room … at least if you’re selling products where there is a lot of content, a lot of price competition, or the products are simply expensive in the eyes of your prospective buyer.  You cannot stop it.

But you can combat it … but only by differentiating your business from the competition:

  • provide better prices
  • provide better customer service
  • provide a better guarantee
  • provide training
  • provide more information (content)

If you think show-rooming is bad now, this is only the start.  Younger buyers are ever more dependent upon their smart phones.  As they continue and increasingly dominate the buying public, show-rooming will become more and more prevalent.

This is a disruptive pattern.  Consider yourself disrupted.

Now what are you going to do about it.

Filed under: multichannel commerce, Omni-Channel Commerce, Opinion, , , , , , , ,

How Seamless Are You?

How Seamless Are You? is a study by Accenture on omni-channel retailing, from the customer’s point-of-view.

In my review, I found nothing earth shattering … because it told me what I expected:  customers want to be able to do business with you on their terms, rather than on yours.

Customers expect uniformity in products, pricing and promotions across all available channels.

So, if your organization is complaining about the negative impact of “show rooming” on your sales, then you should immediately consider the fact that your business may not be competitive in these three areas.

There seems to be some reluctance, among some retailers, to recognize that you win and keep customers by being the best company to buy from.  That may mean the best products, or the best prices, or the most attractive promotions.

But you can’t just sit there doing everything like you’ve always done things and expect to preserve your place in the market.  You must be better at something.

You must be more convenient, have a better selection, more available inventory, lower prices … something that differentiates you.

The principles of success have not changed … only the tactics required to implement those principles in the most effective way.

Filed under: News, Omni-Channel Commerce, Opinion, , , , , , , ,

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