As the cost-of-living crisis continues to bite, consumers are reining in spending, including online purchases.
In 2021,Covid accelerated UK eCommerce penetration, which hit an all-time high of 20% of total retail sales. This year, the return to in-person shopping,combined with current macroeconomic headwinds, will result in a temporary 2% fall in penetration according to GroupM’s latest eCommerce forecasts.
It’s within this environment, that many UK brands are seeking to offset commercial pressures from retail partners by growing their own D2C eCommerce sales. This is leading to a swell in competitive activity for a piece of a smaller pie, which means that now more than ever, an end-to-end customer experienceis needed to fully addressshopper’s needs for thatvital competitive advantage.
Startup native D2C brands such Glossier and Gymsharkare setting the bar high. They have demonstrated the power of delivering a more relevant experience to today’s shoppers vsestablished brands.The question is howagainst this backdrop, can brandsthat were not born digital,accelerate their ability to build compelling experiences with increased relevancy to win more inD2C?
Understand how your brand can be relevant
Invariably, salesthrough retail partners result in an incomplete view of your brand’s metrics and the consumer journey insights essential to driving your growth further. D2C eCommerce platforms by contrast provide more visibility and control over your brand’s destiny, and considerably more opportunity to understand and customise to your customer’s needs.
Web analytics, media performance, customer feedback, reviews, and first-party customer data can unlock insight into how our audience shops the category, how their needs can be addressed, and which triggers correlate to which retail channels.
At mSix&Partners, we advocate for an integrated approach to gathering intelligence on D2C shoppers. Our eCommerce Maturity Indexallows us to identify thedata sources and diagnostic metrics that willuncover new customer insights. We then blend these data sources and metrics with these with audience planning and media performance inputs to build a rounded view of a customer journey that goes beyond media.
Crucially, success in D2C depends not only onhow a brand maintains relevance in media channels, but how that relevance extends through into the eCommerce experience, content and proposition.
Build a high-relevance customer experience
An industry trend is seeing CMOs taking ownership of on-platform Customer Experience (CX) -traditionally led by internal IT and support teams - in order to build a consistent brand experience across media and eCommerce.
Given the breadth of factors, options and dependencies involved, how does a brand begin to make their D2C platform CX more relevant?
Benchmarking the shopping experience for your brand versus competitors can highlight where to focus, where you already excel or where you can capitalise on gaps that will allow you to differentiate.
Ensuring common customer questions are addressed in supporting content and campaigns can mitigatedrop-offswhile helping your brand stand out. For instance, authentic communication of sustainability and ethical positions will win among younger consumers who see this area as a dealbreaker to their final purchase decision.
The more personalised you can be in content, offers and recommendations, the more successfully you will connect with consumers. Younger consumers in particular favour innovation and personalisation around the product proposition (think subscription boxes and flexible payment options). Failing to adapt could see even established brands lose out online to new native D2C competitors.
Within mSix & Partners, our experience with D2C clients is that end-to-end alignment of media, audience andon-platform experience is the key success factor in eCommerce. We approach thisviaan established process: Identify-Scorecard-Solve-Iterate, managed by a specialist CX team that is tightly integrated with media operations, content production and technology platforms.
Optimising relevance over time
There is no “set and forget” in eCommerce. Today’s hard-won relevance is tomorrow’s obsolescence. Ways of working need to enable an ongoing, iterative, and agile approach to maintain relevance and grow customer lifetime value. Investment in experience and content need to be fully integrated with media activity, and crucially, retain relevance as shopper needs evolve.
In practice, this means dashboarding the right KPI’s, data and diagnostics so theyare easily accessible, interpretable and repeatable. How you define your goals willalso steer your outcomes; eCommerce goals could include customer lifetime value (CLV), acquisition, revenue and profit, and other ‘commercial’ factors like inventory holding, in addition to more established media performance and efficiency metrics.
To ensure our clients are ahead of shifts in relevance, we operate an agile testing methodology for eCommerce clients, reviewing and prioritising test programmes across CX, content and media activation under one umbrella.
Increase relevance to increase profitability
eCommerce profitability can be challenging, especially in the context of consumers tightening their purse strings.
At mSix&Partners, we have seen that D2C profitability flows from an ongoing focus on relevance andend-to-end integration. Aligning the journey and the destination not only improves the customer’s shopping experience and brand perception, but delivers greater value on media investments, and ultimately drives sales and profitability.