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GUEST COMMENT The new sales funnel: how DTC channels impact purchase decisions

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Direct to consumer: the next frontier for ecommerce
Direct to consumer: the next frontier for ecommerce
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Direct to consumer is a growing trend – so what does that mean for retail? Here are some tips

According to a recent survey by Royal Mail, online shoppers in the United Kingdom make 87% of their retail purchases – grocery shopping not included – online. That’s an increase of almost 9% from the previous year and UK consumers’ time spent “browsing” for deals and researching products has also increased. Alongside this, searches to discover new or trending brands have risen, suggesting that shoppers are keen to be inspired by brands they are not already familiar with.

 

This research process – which a decade ago would involve a trip to high street stores, department stores or out of town retail parks – is now being affected by direct to consumer (DTC) channels including Amazon, eBay and Google Shopping. Multiple categories, in particular fashion and consumer electronics, have been disrupted by consumers seeking to research products online, either diverting purchases or turning away from the traditional brands in favour of an alternative of better value.

 

Amazon, in particular, has taken advantage of this position and capitalised on it by creating a seamless path to purchase. There is no resistance when purchasing on Amazon, no forms to fill in or bags to carry, or even hassle in any potential returns process. Thereby creating a gigantic net of convenience, with which to capture the customers when they begin their purchase research.

 

The rise of online research in the path to purchase has also been driven by availability of significant, useful, customer reviews and feedback through DTC channels. By researching online, the customer gets access to a volume of aggregated data which offers insights far greater than sales recommendations in store.

 

Take as a key example, a customer looking to purchase a wireless Hi-Fi for use at a party. A key concern when making this purchase will be researching battery life. Now consider that retail stores are not all held to the same standard when identifying the battery life of a product. One store, for example, is able to say that the battery life of one Hi-Fi product lasts 4 hours, but this is based on the product running on standby the entire time.

 

Another store can say a different more powerful option has a 2 and ½ hour battery life, but this is based on it running on full power for that entire time. This doesn’t enable a clear like for like comparison from the point of view of the customer, as there is no universal standard to enable them to make a well-informed decision when shopping in store.

 

This is why the prevalence of reviews in the research process cannot be underestimated. Given the volume of customers and the volume of reviews on Amazon, it is likely that that a shopper will be able to find multiple reviews from others who have purchased a Hi-Fi for the exact same purpose, thereby enabling them to identify the most suitable product.

 

Amazon’s own research tells us that positive, informative reviews are one of the main triggers for consumers to make a buying decision. In the absence of a physical product in front of them, buyers seek assurance to buy through reviews. But what can brands do?

 

Well, a lack of presence across DTC channels simply means missing out on potential sales. For example, the way the channels are set up means that if a customer is online searching for your product or similar, and there is no managed presence from your brand, that customer will be immediately diverted to a competitor in order to fulfil the sale.

 

Having a presence on DTC channels not only prevents missing out on potential sales and growing your customer base, it also adds value to the brand. When we work with brands, to add real value and maximise the opportunity of the DTC channels, we focus on content as a priority. Data tells us that certain products are going to be more successful on mobile, and certain products are going to be more successful on desktop. Ensuring content is optimised for these products and the right channel, will significantly impact the success of sales.

 

A brand we’re working with to maximise its sales through content is NextBase. A growing UK brand, NextBase’s online presence has grown faster than its general market share – one of its listings on Amazon has over 4,000 reviews. We helped orchestrate this success for NextBase online by developing quality content for its listings.

 

In the most popular listing, we put content together to showcase the brands entire range of hardware options, including a comparison table which demonstrates the features between the range. This provides convenience for customers as they are undergoing their research process, whilst providing the opportunity for the brand to upsell across the range.

 

As the way we shop continues to shift, we predict convenience will continue to be a key motivation for shoppers. Convenience when researching product information and searching for what to buy, convenience when seeking to make purchases and ensure speedy reliable delivery, and convenience when seeking to make returns.

Brands with a DTC channel presence which seek to place convenience at the heart of their customer experience are thriving, and it’s something the traditional high-street should learn from, rather than pushing back against. Successful stores are becoming increasingly valuable as a consumer touch-point which can deliver brand experience and education, working in harmony with an online offering which provides convenience.

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