Go digital, Go direct
Social media and eCommerce platforms have transformed the way companies interact with people who buy their products.
These digital tools provide enterprises with a low-cost way to engage with consumers and explore direct selling approach as a vehicle for a quick start-up.
For many young SMEs, online direct selling is the only way to bring to market their innovative products and emerging brands for a fraction of the costs of traditional distribution models. Online direct-to-consumer selling allows young enterprises to:
- Reduce time-to-market and increase efficiency in bringing their innovations/ new products to the market;
- Expand their market reach, not being restricted by geography or distributors’ location;
- Raise awareness of their innovations/ new offerings and build a community of potential customers
- Grow their sales quicker and save costs, associated with traditional distribution channels;
- Test the new product and experiment with pricing to better understand the optimal spot for conversion
- and profitability;
- Build closer relationship with customers and gather valuable data during the buying decision process, to better understand their preferences and refine offerings to satisfy their needs.
Adoption of the direct-to-consumer selling approach requires a comprehensive digital strategy:
- Determining appropriate on-line distribution channels (B2C website or Online marketplace);
- Ensuring a high ranking and visibility of the product/ brand on search engine results (for example,
- with the help of paid search advertising, display advertising, search engine optimization, popularization of a brand/ product through social networks);
- Establishing direct communication with customers: educating them about innovative/ new offerings and encouraging their feedback and in-depth reviews of these products.
One of the advantages of the digital direct-to-consumer selling approach is its scalability. As companies grow, they could introduce and start selling more and more products and brands through the chosen digital marketplace.
Doing so does not require the investment of any additional significant resources. Fixed cost should mostly remain almost the same and only variable cost should increase.
Online direct-to-consumer sales approach may be adopted by many types of companies: be it an SME or a big company, a start-up or an established firm.
The difference will be in the strategy they choose, depending on the context from which they come from (e.g. sector and type of economic activity).
For established firms and brands, adopting the direct-to-consumer approach may require development of a new marketing strategy. Companies, taking this step, need to learn how to differentiate product offerings at retail outlets and at online stores, and pay careful attention to pricing strategies for different channels used.
Young companies and emerging brands have an opportunity to grow rapidly. This means there could be a strain put on their existing logistics channels. They might have to be expanded or even still new logistics strategies altogether might have to be put in place in order to address growing demand.
New employees might have to be recruited, who will have to be fast learners to ensure smooth continuation of the product delivery process. Companies should make sure new logistics channels and personnel do not impede the brand equity acquisition process. Several young enterprises have utilized the direct sales approach for launching innovative products and new brands.