Overcoming D2C Challenges
Although going direct-to-consumer presents many opportunities, brands of all sizes across various industries often face unique challenges launching and maintaining their direct-to-consumer business. Typical questions raised by brands going D2C include:
- Tax Collection and Reporting – how do I ensure that my business is tax compliant when selling direct-to-shoppers living in multiple global regions?
- Onshore Payment Methods – how do I offer onshore payment methods to shoppers based in a different country or region to where my business is registered?
- Fraud and Chargeback Risk – what tools are available for my online store to mitigate fraud and chargeback risk?
- Regulatory Compliance – how do I ensure that my brand complies with specific legal regulations of specific local markets?
- Managing Channel Conflict - how do I minimise channel conflict and create a unique ecommerce offering.
At CommerceCentric we have a depth of experience helping brands to overcome these unique challenges. We have a proven strategic and technical approach that can deliver an effective D2C solution for your business.
Avoiding D2C Pitfalls
Establishing a direct-to-consumer channel offers fantastic opportunities for brands willing to invest into this unique business model, including enhanced customer relationships and higher profitability. However these opportunities are not without risks and every brand considering a D2C business should identify and mitigate risks upfront to guarantee immediate D2C success.
Align Internal Stakeholders with the D2C Business Model
One of the biggest challenges faced by brands going D2C is obtaining sufficient ‘buy in’ from internal departments to support the D2C Business Model. Internal stakeholders reliant on established retail channels with high sales volumes are more likely to question the viability of D2C. In such cases it is very important to gain traction with internal stakeholders early in the D2C business planning phase. Successful D2C channels require planning, leadership input, investment and ongoing support, with tasks traditionally managed directly by retail partners now performed by internal departments. However brands that invest time, effort and resources into D2C will see fantastic ROI, profitability, brand loyalty and more insightful data metrics; enabling them to further optimize D2C stores, products and marketing campaigns.
Understand the D2C Iceberg
Direct-to-consumer solutions are often compared to Icebergs, with the tip of the iceberg representing everything seen by customers including images, product information, pricing merchandising, shipping options and checkout pages. However 90% of the D2C solution is actually underwater consisting of complex items including product catalog integrations, price list configurations, FX calculation, data analytics, tax collection, legal compliance, fulfillment integrations, subscription plan configuration, payment method set-up etc. Brands going D2C should consider all components lying under the tip of the Iceberg in order to prevent costly changes and delays during solution build.