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The COVID-19 pandemic propelled the business world into the digital sphere. It seemed that almost overnight, brands transitioned to e-commerce to valiantly combat the global lockdowns. And while many struggled to make a successful transition, it worked for many.
But what, you might ask, differentiated the brands that succeeded at DTC from brands that didn’t?
When creating an online direct-to-consumer channel, you’ll have to encounter and overcome a number of challenges commonly faced by businesses making the transition.
Let’s talk about these challenges and how you can tackle them!
The 4 Challenges
These are four of the challenges that businesses typically face when starting a DTC ecommerce channel.
1. Getting Marketing Strategy Right
E-commerce means cultivating a more active online presence than ever. Online marketing can be a culture shock for many brands that previously relied on the traditional forms of promoting themselves. Especially if you’ve been only focusing on B2B channels. The digital space is highly competitive and with over 4.8 billion internet users, home to the largest audience base in the world.
It’s imperative to create an impactful online presence that accurately reflects your brand’s values and helps your brand achieve its commercial goals. The first step when creating a DTC online channel is to decide on one. Many brands opt for social media channels, primarily Facebook and Instagram to promote their products or services.
2. Handling Fulfilment & Orders at Individual Customer Level
Order management online can be especially tricky if you have been running a traditional offline fulfilment operation. While offline DTC transactions are incredibly straightforward, things can get a bit more complicated when you start processing orders through digital channels. But after you’re past the learning curve, as is the case with most brands, you’ll realize how smooth online order processing is in comparison to the alternative.
For a business that has been running a B2B only operation, it can be even more complicated as these organizations must adopt completely new processes to manage fulfillment at the individual consumer level. Given you will be now handling fulfilment at individual unit levels compared to pallets or containers, you must ensure that you have operational processes and systems available to support such operation.
If you’re running a small-scale business, in-house order management might be feasible. But if you’re working with larger inventories, partnering with third-party logistics and fulfilment companies will greatly improve the operation.
3. Getting Reverse Logistics and Return Process Right
Similar to hassle-free order management, you also need to create a hassle-free returns process. Returns management can be tricky; tracking returns requests, complaints, refunds, can all become considerably complicated for beginners.
Partly how seamless your reverse logistics and returns are is dependent on the e-commerce platform you select, ideally, it should facilitate returns management. Modern e-commerce platforms such as Shopify and WooCommerce have app ecosystems that have multiple add-ons built just for handling returns.
Given those tools are built for the whole purpose of managing returns, you’ll be able to extend the features and functionalities available through standard platforms. Apart from technology, you must ensure that you have a customer-first return policy to make customers feel comfortable purchasing from your website.
Customers should be able to make returns requests and customer service agents should be able to deliver and track those requests. We wouldn’t recommend having a strict no-returns or refunds policy as it can be detrimental to your overall customer experience. This brings us to our next point.
4. Customer Service and Customer Experience (CX)
Customer service and customer experience go hand-in-hand. Delivering a great customer experience is one way to stand out from the competitions. Customers always remember the vendors who provide them a great service and data shows that they are willing to pay extra for it. When considering customer service, the belief of having live chatbots and teams of customer service itself is sufficient to deliver a great customer experience is false. While such a mixed approach can deliver a great customer service, this itself will not be sufficient enough to deliver a great customer experience in the long run.
In our experience, we have not seen a chatbot who can handle customer enquiries as good as a human. The best practice is to use a chatbot for the initial interaction with your customers to provide guided options to direct customers either to correct help content or to a customer service personnel. The bad execution of a chatbot can bring more negative impacts than positive ones.
In order to deliver a great customer experience, one must identify all customer touch points within the customer journey and work to reduce friction. Customer experience is all about how a customer feels about your service or product. This can be anything from your ecommerce web site checkout process to the actual packaging and the delivery experience.
There are many challenges you’re met with when transitioning to direct-to-consumer e-commerce. For businesses who has mature B2B operations, the process of change to run an effective DTC operation can be a major undertaking. Companies believe that they must also face the same challenges others faced before them. The commonly faced hurdles we’ve highlighted above such as online marketing, order management, and fulfilment, returns and customer experience can be easily overcome with right advice.
At DASCX we help business to improve or start their online direct to consumer operation so they can sell directly to their customers through online channel. With substantial experience within the consumer goods and services industry, we show you the best practice approach to overcome challenges such as the ones highlighted within this article to get the best outcome. If you looking to start a new online DTC channel or want to know how you can improve your online DTC channel, please contact us for a free initial consultation.
Dasun Premadasa is the Founder and CEO of DASCX, the premiere B2B CX consulting firm for manufacturers in Australia. With over two decades of experience including four large CX and digital transformation programs at 4 different manufacturing and automotive firms in Australia, he's one of the best business technology experts for B2B customer experience.