×

Here’s Why Firms Should Focus on DTC to Recoup Lost Revenue, Prepare for Future Sales

Direct-to-consumer business models were heating up before COVID-19 set in, but the pandemic has made DTC an even hotter selling mode for brands right now. With brick-and-mortar largely closed and Amazon prioritizing essential goods, brands need to be able to promote their own DTC e-commerce channels successfully.

For some brands, these channels are entirely new. For others, they’ve lacked the technology or resources to optimize them. Platforms such as Shopify, Scalefast and Stackline can help support brands in their online selling, providing infrastructure with a user-friendly interface, but companies need to act fast in order to compete.

“During times like this, a lagging retail e-commerce model can lead to major technical, operational and economic challenges,” said Olivier Schott, chief marketing officer at Scalefast.

By utilizing an e-commerce platform, brands can leverage supporting functions like customer support, payments and fulfillment. With many companies facing a surplus of inventory, e-commerce channels are also frequently hosting flash sales to help shift product quickly. Brands will want a reliable platform that can handle high-velocity purchasing events to ensure a smooth customer experience.

Watch on FN

Scalefast’s Schott also recommended using this time to take control of every part of the supply chain, anticipating demand and moving inventory to well-located distribution centers ahead of time. Keeping an eye on stock levels and fulfilling orders on time is critical to keep customers returning both during and post-pandemic.

“COVID-19 has made it clear that owning your own DTC channel is not only key for brands to build relationships with their customers, but it is in fact a matter of survival — they all need a store by tomorrow,” said Schott.

DTC platforms can also provide a means for brands to support their partners during COVID-19. By implementing an affiliate network, brands can let their vendors, ambassadors or associates sell goods through their channel and earn a commission, while helping to reduce surplus inventories. L’Oréal has done this with hairstylists; footwear brands, for their part, could let local vendors participate or set up furloughed staff as consultants.

To help businesses implement change quickly, Scalefast said it can launch a brand’s online store within 15 days. At Shopify, there is now a 90-day free trial available to brands making the shift to e-commerce. But experts emphasize that a smooth supply chain is the most important factor in establishing a successful DTC strategy.

“The key to success is communication with logistics partners,” said Schott, “and keeping full transparency intact surrounding weaknesses in the supply chain that could lead to problems down the line.”

Access exclusive content