Direct to consumer sales, often known as direct to consumer eCommerce is a sales approach in which a company sells to customers directly. This is in contrast to what most B2B companies do: sell to vendors, retailers, and resellers.
However, D2C refers to when a wholesaler, manufacturer, or producer transacts with individual end consumers via a headless eCommerce website.
The imminent changes are causing huge concerns and putting a lot of pressure on marketing teams to figure out what this means for their firm and identify new growth prospects. And marketers aren’t very happy about these changes.
The advertising industry is evolving
The key focus of the privacy modifications is app tracking transparency (ATT). Users are apprehensive of being tracked, and Apple and Google recognize that they want to opt out of tracking wherever possible.
The iOS 14 privacy feature limits the data that third-party tracking scripts can acquire. When asked if they agree to their data being gathered, users must now manually opt in. The majority of users are likely to opt out of tracking as more consumers become worried about their online privacy.
What do Apple’s changes to ATT mean for marketers?
Customers must now actively opt-in and consent to be tracked as part of Apple’s iOS 14 privacy reforms, as opposed to before, when apps would track user activity without permission. Users’ data privacy is becoming increasingly important, therefore many people are praising Apple for the adjustments they’ve made.
Direct to Consumer brands are concerned because tailoring ads to the behavior of iOS users has become much more difficult with fewer data. These developments do not imply that digital advertising is no longer viable. It simply implies that direct-to-consumer brands must adapt and utilize new channels in order to continue to thrive.
This has sparked a public feud with Facebook, which claims that Apple is simply attempting to confine data collecting to itself while making it impossible for others to do so. Facebook was a significant participant in user data collection for tailored advertising prior to this transition, and it stands to lose a lot as a result of these changes.
However, Apple is adamant about its decision. Established brands as well as direct-to-consumer startups may find it more difficult, but not impossible, to customize adverts for their users on Apple devices with the arrival of iOS 14. Traditional brands, small online stores, and small businesses, Facebook claims, will be disproportionately harmed by this shift because they don’t have as much money to spend on advertising, and tracking behaviors is necessary to reach the correct audience.
Google has announced a modification in its privacy policies. A future Google Chrome upgrade would effectively eliminate third-party cookies, decreasing the amount of data that can be tracked about individual users. Instead, Chrome will group users with similar browsing habits into cohorts.
Individual activity can still be recorded on a brand’s website, but firms utilizing tracking technology must adhere to strict criteria in order to track these people. They’ll be able to tailor ads to specific demographics and profiles as well.
Costs of advertising and consumer acquisition were already rising
The days of getting a guaranteed low cost per conversion through paid ads are long gone. The cost of advertising on social media and Google is rising as more businesses use these channels. Ads can be beneficial if you’re selling high-priced goods. Ads, on the other hand, are becoming increasingly unprofitable for firms providing discount/lower-priced products. Due to the entry of new advertisers aiming to reach the same audience, ad revenue decreased slightly.
Because of the limited targeting possibilities, it will be much more difficult to construct lucrative ad campaigns for D2C firms advertising on Facebook and Google due to the probable increase in acquisition costs due to privacy limitations.
Apple’s email marketing initiatives are driving businesses to adjust their ways
Apple Mail accounts for 52% of all email opens, and these changes aren’t helping advertisers. Brands can no longer track metrics like open rates, making it difficult to see how effective your emails are. The following metrics could be helpful for marketers:
- Conversion Rate: The percentage of email recipients that complete a certain activity, such as purchasing something.
- List Growth Rate: The rate at which you add new email subscribers vs the rate at which individuals unsubscribe from your list.
- Overall ROI: The amount of money you make from email marketing for every dollar you spend.
Consider your company’s objectives and how you’re achieving them through email marketing. Then double-check that the measurements you’re focusing on correspond to those objectives.
Use time-based and click-based triggers:
Make sure you’re not using any triggers linked to openings in any automated emails or email drip campaigns you’ve set up. Instead, set up email automation using the following triggers:
- The number of times a user clicks on a specific link or piece of content
- Triggers depending on time (send email two X days after the first email)
- Birthday and anniversary emails are examples of date-based triggers.
- Abandoned cart emails and other eCommerce behavior triggers
Create emails that people want to open:
While you won’t have as clear a picture of how many people are viewing your emails, it’s still critical that they be opened. Focus on writing emails with enticing subject lines that will persuade recipients to click. However, you should concentrate on making it obvious what the email’s contents are.
What are the next steps for marketers?
Even with these privacy measures, sales aren’t expected to plummet overnight. Even before these shifts, consumers are suffering from advertisement weariness, making it more expensive and less effective.
Customers are also receiving communications that are not sent by email, such as SMS, push alerts, and direct mail. Brands must think beyond the box in order to succeed. Consumers are increasingly relying on trust and a positive brand experience when deciding where and how to shop.
The importance of owned marketing is greater than ever
It’s been fantastic to use paid social media advertising platforms and Amazon’s marketplace to reach massive audiences, D2C firms need to use their own channels to lower acquisition costs and increase repeat purchases in order to build an experience rather than just hard sell. Owned marketing comes into play in this situation.
Owned marketing, as the name implies, focuses on marketing through channels that you control.
Email and SMS subscriber lists, Website and blog content, Content marketing, Referral, and partner marketing, and Reviews are all examples of owned marketing.
Owned marketing is filled with all sorts of marketing benefits. Some of them include:
- Low Acquisition Cost: You don’t have to pay to conduct promotions when you use your owned channels to advertise things. So, if you sell something through these channels, the acquisition cost is free. For small businesses or traditional retailers that don’t want to or can’t afford to spend a lot of money on advertising, owned marketing can help you a lot.
- Take control of your branding and messaging: You may have complete control over what you’re promoting, who you’re targeting, when you’re promoting, what the experience is like, and how long you want the campaign or any other marketing content to stay if you own the brand channels. Paid channels have a restriction on how much of your content is seen, whereas owned channels keep your content up to date permanently. This will block your brand development.
- Engage and build a good relationship with customers: Owned marketing helps you to engage and communicate with your customers or target audience more directly, in addition to giving you greater control over your content, thus, giving a better customer experience. Your website’s comments area and social networking outlets are excellent examples. Make clients feel heard by utilizing these communication channels to encourage brand loyalty. Take suggestions for future product launches from customer feedback and utilize them to learn more about your customers’ experiences with your current products and services. This will definitely lead to gaining more new customers.
- Grow LTV: Customer lifetime value(LTV) is a significant metric for D2C brands. This indicator is critical to your brand’s performance since it defines how well it can retain customers. Customers who have a high LTV are more likely to stick with your brand, and it demonstrates how satisfied they are with it. Building interaction and admirers for your product is one of the best strategies to enhance LTV. Customers will be more likely to make repeat purchases as a result of this.
- Improve your customer’s experience: It’s critical to give consumers the best journey properly. You should always be on the lookout for methods to improve the customer experience. For example, D2C brands are increasingly focusing on the post-purchase experience. D2C Brands may enhance its repeat buy percentage at a low cost by improving the post-sales experience. Keeping clients satisfied simply leads to increased sales and gaining new customers.
- Reduce your dependency on paid advertisements: Ads are a fantastic tool to boost your business’s growth. However, rising ad expenses might eat into your income significantly. Targeted ads will be much harder to perform well and more expensive to get right as a result of the recent privacy regulations, therefore profits are expected to continue to decline. You can lessen your reliance on ad revenue by marketing through your own methods. While Google advertising is useful, it can be expensive. You can utilize your blog entries to draw audiences and get consumers for free if you have any search engine optimization (SEO) knowledge. You must use the appropriate methods for each sort of media to achieve exceptional results from owned marketing.
Brands that will help marketers succeed in the future
We can assist you with any aspect of the post-purchase experience, including SMS marketing, web design, messenger marketing, helpdesk operations, and retention. If you want to improve your marketing approach, here are seven brands you should be aware of.
Malomo: Malomo is a shipment tracking brand that uses branded tracking emails and landing pages to enhance repeat sales, improve customer satisfaction, educate customers, and reduce support tickets. Here’s how does Malomo enhance the post-purchase experience:
- Branded Tracking Pages: Customers check the status of their orders 4.6 times on average when ordering from an online store. That’s why it’s critical to invest in tracking sites that are both useful and attractive, providing real-time shipment tracking. Malomo makes it simple to create beautiful, custom-branded tracking pages that work with Shopify and Shopify Plus. Malomo also makes it simple to provide product recommendations that directly boost sales from your shipping monitoring within a marketing budget.
- Shipment updates in real time: Customers despise it when they shop online and their orders are late. But they despise it, even more, when delivery delays go unnoticed. With the increase in shipping delays caused by COVID-19 and the Suez Canal blockade, it’s critical to convey potential shipment delays to clients before and after they place their orders. In order to improve the customer experience, it’s critical to manage expectations.
- Shopify Integrations: Malomo’s integrated Shopify and Shopify Plus integration makes it simple to get started with Malomo. Malomo’s post-purchase communications may be easily integrated with your email and SMS processes thanks to further interfaces with apps like Klaviyo. You can use your favorite tools, such as Gorgias, Recart, Repeat, Octane AI, Youtube, Instagram, and more, in addition to our integrations.
Recovero: For Shopify stores, Recovero is a strong SMS platform. Recovero assists eCommerce businesses in designing and implementing SMS programs by assisting them in sending campaigns, creating automations, and generating additional revenue through texts, gifs, and other mediums.
One of the most appealing features of SMS marketing is that it is a wholly owned channel. Rather than allocating funds to paid advertising, where you are subject to predefined ad costs and have no influence over the shopper’s experience after the conversion, SMS allows you to control the entire process.
Apple’s iOS 15 upgrade, released in 2021, emphasized this feature even further. Retailers who have relied on email and paid marketing in the past will confront even more challenges to overcome and adapt to.
SMS relies on data that customers willingly submit, which is why many retailers are turning to it as they work around the limits outlined above. Recovero’s Shopify SMS platform allows businesses complete control over their branding and messaging while also allowing them to communicate with customers in novel ways. Recovero humanizes customer-brand interactions through two-way messaging and conversational commerce.
Brands can expand their list with Recovero by using configurable desktop and mobile pop-ups, keywords, QR codes, landing pages, social media, back-in-stock opt-ins, and checkout collecting. In addition, they provide a library of connectors with popular technologies such as Klaviyo.
Recovero was also created with CTIA and TCPA compliance in mind, with product features and best practices that set brands up for success. Recovero understands that SMS is a private medium via which clients connect with family and friends. Consumers expect brands to meet them where they are, which we know is on their mobile devices. We may reasonably assume that customers want to interact with their favorite businesses on mobile, given that mobile accounts for the great bulk of e-commerce sales transactions. This enhances the customer journey and helps in building a customer base.
Fuel Made: Fuel Made is a company that helps e-commerce businesses flourish by generating engaging and tailored client experiences. Fuel Made specializes in Shopify custom design and development, growth and optimization strategy consulting, and Klaviyo advanced email marketing.
Because of the rising expenses and complexity of advertising, businesses are being forced to find new and innovative ways to attract and retain customers. As previously stated, one of the main goals is to rely more heavily on your own marketing channels and make them as sturdy as possible.
Gorgias: Gorgias is a prominent helpdesk for Shopify, Magento, and BigCommerce merchants, allowing them to manage all client communications and tickets in one place (email, social media, SMS, phone). It uses machine learning to automate up to 25% of frequently asked queries and integrates seamlessly into your existing tech stack to provide better customer service.
Gorgias is an eCommerce helpdesk that turns customer service into a revenue generator. It helps independent e-commerce firms by centralizing customer contacts and automating solutions to common questions, allowing your support personnel to focus on more meaningful and profitable conversations with clients.
Gorgias collects all customer requests received through various communication methods and organizes them for you to handle. To harness the explosive power of social commerce, you must be able to respond to all comments and inquiries in a timely and orderly manner.
Octane AI: Octane AI is a quizzing, Facebook Messenger and SMS automation, and opt-in tool all-in-one platform. By developing personalized cross-channel experiences with Octane AI, merchants can connect, convert, and keep customers.
Marketers are understanding the value of owned marketing in light of recent data and privacy changes. However, accurate segmentation and personalization on channels like email and SMS, which is achieved with the collection of “zero-party data,” is a vital component of owned marketing.
In exchange for sharing zero-party data, customers want a better, more personalised experience. However, this information does not merely fall into the hands of marketers without any effort on their part (no matter how much they wish it did). To realize the benefits of personalization, businesses must first have the technology to acquire zero-party data.
An on-site quiz experience is the greatest approach to obtaining zero-party customer data (at Octane AI, we call it the Shop Quiz). At first glance, a Shop Quiz appears to be a fantastic experience for customers. It allows users to choose from a variety of options, opt into marketing, and receive personalised product suggestions.
Fortunately, there are advantages for brands as well, such as the ability for marketers and founders to collect zero-party data that classifies clients into buyer profiles and syncs straight to their owned marketing channels through a quiz.
Repeat: Repeat is a software-as-a-service platform that helps CPG companies convert one-time buyers into loyal consumers. Repeat’s Smart Replenishment software analyses each customer’s individual consumption habits and uses a combination of automation, tailored reminders, and a replenishment cart to generate repeat sales.
Repeat provides marketers with quick access to crucial data points such as product-level replenishment intervals and customer-level time-between-purchase data, allowing them to better understand when their customers are most likely to reorder.
Repeat is used by brands like Huron, byHumankind, and Mid-Day Squares to power faster, easier reordering experiences. Repeat works because it examines a brand’s whole store history, comprehends replenishment cycles, and provides customers with individualized, headless carts. Those carts are prepopulated with items due for replenishment and are rooted in a customer’s previous purchase history. Marketers won’t have to dive too deep into the data because Repeat can automate replenishment notifications.