August 17, 2020
Direct to Consumer eCommerce: Why You Should Consider DTC Amidst the COVID-19 Pandemic
With more and more retail outlets shutting doors because of the COVID-19 pandemic, consumer brands need to adapt and re-reassess their marketing strategies. Many companies in almost every industry took steps further and offered direct to consumer (DTC) delivery services in hopes to stay afloat amid the crisis.
Moreover, eCommerce is growing at the same rate in the past couple of months as it did in the last six to seven years. Besides, COVID-19 amplified the relevance of direct to consumer eCommerce since more customers embrace contactless online shopping.
As a result, many brands are sustaining or increasing their sales through online channels, especially that several traditional routes are currently failing. Existing offline brands are also testing the water by exploring new opportunities through a more resilient DTC business model.
Along those lines, the facts imply that DTC is a relevant model that can sustain eCommerce industries during the ongoing economic decline. To give you further insights, here’s why you should consider direct to consumer amidst the COVID-19 pandemic.
Stay Home: The New eCommerce Landscape
The impact of the current crisis has turned direct to consumer routes from an opportunity to a necessity.
Furthermore, the average eCommerce transaction value increased to 74% last March, compared to the same period the previous year. According to the study, the pandemic also pushed long-running trends toward eCommerce, with 44% more people shopping for groceries online and 39% buying more consumables digitally over the next couple years.
Hence, with governments imposing lockdowns and encouraging people to stay home, consumers are leaning towards brands that can convey a strong sense of social purpose. That includes product relevance and your actions towards health, the environment, and the community in your overall value proposition.
Along those lines, direct to consumer eCommerce gives your brand an ideal platform to relay your message. More people are staying at home and getting laid off from work. Thus, offering an accessible online channel and delivering better value to consumers at a fair price means a lot to your end-users and your brand image.
COVID-19 Impacts Customer Shopping Behaviour
In the wake of the global health crisis, 54% of consumers worldwide believe that brand authenticity and honesty is highly essential, aside from availability.
Additionally, immediate concerns surrounding safety and reliability add urgency to existing reasons for considering a DTC eCommerce model that’s exclusively controlled by the brand.
An example is to leverage eCommerce to offset the declining retail markets where fewer brands have made it on the shelves. Another is to stop relying on retailers and maximise your profit margin.
The pandemic also impacted consumer shopping behaviour and considerably changed the purchasing preferences of most consumers. According to GlobalData, customers now find trust as a crucial factor when buying — stating that trustworthiness, risk-free, and familiarity are elements that influence their shopping decisions.
Consequently, 43% of end-users mentioned that they tend to buy goods only from their preferred brands, especially during the crisis. Their response made it evident that DTC channels hold the high ground and have the potential to target consumers better than traditional eCommerce channels.
Direct to Consumer Can Sustain Beyond COVID-19
Even before the pandemic, many consumer product companies strive to realign their DTC eCommerce strategies to take advantage of emerging opportunities. However, despite seeing a portion of sales moving online, many brands still failed to create a winning DTC formula.
On the other hand, consumer product companies had a growth of about 70% from eCommerce over the past decade. Customers affected by the COVID-19 pandemic may be more anxious than before — but they are willing to spend.
With more consumers acclimating to eCommerce even after the crisis, businesses should get their DTC strategies spot on to maximise growth, market share, and profitability now and beyond COVID-19.
Anxious Consumers Weigh Risks in Mind
A crucial issue that bothers the future marketing landscape is whether the new normal described by customers will stay for good. People can explain how they will live when the crisis is over, but when will that be?
Turns out, our dependence on multiple questions like How quickly could we discover and manufacture vaccines and give it to people? and What will happen to the Australian economy and people’s livelihoods in the meantime?
Since most consumers have no clear answers in mind, they will adopt an always-on-emergency mentality. That means, they are more sensitive to real and perceived risks, which significantly drives buying power and the overall economy.
Moreover, as people get accustomed to the new normal, it doesn’t mean that they became apathetic on events and holidays that would have impacted their shopping lifestyle.
On the contrary, consumers hold a greater sense of general alertness, where they are more cautious and pragmatic when making decisions — both lifestyle and shopping decisions.
Consumer Data Leans More Towards Direct to Consumer eCommerce
On a global scale, consumer data and eCommerce forecasts indicate that shoppers around the world expect more risk-aware lives. Here are some relevant consumer facts from a study:
- 52% of people say they will change the way they shop
- Out of that 52%, 70% said they would be more conscious of hygiene and sanitation when shopping
- 60% will minimise shopping trips by buying in bulk
- 44% of consumers will shop for groceries online
Aside from buying behaviours, the study also highlighted other practices that will change among buyers.
- 36% of respondents said they would eat differently
- Out of those, 68% consider cooking for themselves more often
- The remaining 46% said they would distance themselves from other customers when eating in a restaurant
In general, while the pandemic continues to unravel, consumers will keep trusting and relying on brands for comfort and quality products. Moreover, it becomes crystal clear for companies to reach out directly to consumers and convey their message.
During these trying times, one way of doing that is through innovative products and service offerings to win their trust for years to come. Hence, companies should consider a DTC eCommerce business model if they want to stay afloat amidst and beyond the COVID-19 pandemic.
The current global health crisis accelerated DTC eCommerce initiatives and sparked new ideas for fresh brands to combat specific challenges. Furthermore, you can combine a consumer-centric approach in offering compelling products and services with a data-driven business model to attain your long-term objectives.
That said, DTC eCommerce is a key that unlocks accelerated and profitable opportunities for companies that can achieve synergy between remarkable products and a robust eCommerce website.
At G Squared, our digital enthusiasts use time-tested, results-focused and data-driven web solutions to suit all your DTC eCommerce business needs. We have worked with Australia’s leading brands in helping them bring to life their DTC eCommerce projects.
Still have questions? Call us today at (02) 9339 4500 or submit an enquiry and we’ll be glad to speak with you.