10 Critical Learnings to Win in D2C in Mid to Large Sized Organizations

Being a Chief Digital Officer in several large Healthcare & CPG these are some of the common learnings I have encountered to scale and win in D2C. Hope it helps and would love to hear your learnings so we can collaborate to learn as a D2C community.

1. Holistic Framework

Sometimes organizations think of D2C principally in terms of E-Commerce, but to be successful it is so much more. A useful framework to follow is acquire, convert and retain, and each of the three pillars require the following listed components. To succeed one needs to excel in all aspects over a period of time.

2. Consumer experience (CX) obsession

It’s obvious and every company talks about consumer obsession. But are we really? Every day, the D2C team needs to be asking themselves how to improve the CX. As an organisation, what are you learning through your reviews, ratings, consumer feedback, and how are you incorporating that to continuously improve CX ? CX is an iterative process, not just a one off. In my various roles I made sure to read customer reviews and comments everyday to pick up signals to act upon.

3. Consumer journeys, content and personalization

At the heart of CX lies journey mapping, content, and personalisation. It is critical to have robust CoEs to make this the DNA of the marketing teams. Real-time content personalisation is also key, which means you need to map how your content operations will work in terms of creative, design and real-time deployment. Which parts of content operations do you keep in-house, and which do you outsource ? What technology solutions do you deploy for personalisation ? Should your content teams be onshore or nearshore ? There are many pros and cons to each approach. Working with the right partners you can create the optimal solution and roadmap.

4. Owned sites and marketplaces

Most successful CPGs follow a dual strategy of owned e-commerce sites and marketplaces. In many cases, marketplaces such as Amazon still account for the majority of sales, as that is where consumers do most of their shopping. Accordingly, it is very important that a CoE is set up to manage and extract maximum value from marketplace partnerships.

5. Revenue++

Most organizations initially think of D2C & E-Commerce as a way to increase sales. Certainly that can be true, but the insights one can generate through building first party databases can be even more powerful. The D2C database can also be used to test new products or line extensions. D2C teams should therefore be positioning D2C on the wider benefits and not just revenue generation.

6. Tech is the enabler; don’t lead with it

Many mid to large CPG organisations make a large investment in martech stacks, only to be disappointed with the return and the ability of marketing teams to adopt and utilize these stacks to derive maximum value. Simply deploying a premium martech stack is like giving someone a formula 1 car, but without the licence or training to drive it. It is absolutely critical to lead with strategy, skills development and business processes. Only then can the organization derive full value from the tech stack.

7. Archetypes

In many instances, D2C and E-Commerce revenues in large markets like the US can be very different compared to smaller markets. Following an archetype strategy can therefore be helpful in guiding investments across regions and markets and helping to optimise marketing and tech investment. In certain cases, premium martech stacks with greater functionality could be deployed in Tier 1 markets, whereas Tier 2 markets could have more value-based stacks to achieve positive ROI faster.

8. Product ownership and agile ways of working

Don’t fall into the trap of relying on traditional organisational structures to win in D2C. D2C requires agile decision-making based on real-time data. Business and IT product ownership is therefore critical for success. Some CPGs have created product owners for attract, convert and retain streams to enable empowered decision-making and agile ways of working. It will be a journey and won’t be perfect on day 1 but over time it will pay dividends.

9. End to end data insights

Many organisations have invested heavily in data lakes and hubs and are disappointed that they still cannot generate end to end insights. Customer Data Platforms (CDP) are now the emerging solution to help companies obtain end to end insights from disparate data sources. Word of caution: work with a partner with real experience in implementing CDP solutions.

10. Outcome based partners

Agencies and partners will be very happy to take your money based on time and materials. Introduce outcome-based pricing in your contract to ensure partners have sufficient skin in the game. It’s tough to construct and arrive at the right KPIs, but it is worth persevering to ensure partners have the right outcome based mindset.

Author:

Vivek Chaudhri,

Vivek Chaudhri has been the Chief Digital Officer at numerous Fortune 500 companies and is now leading the D2C Practice at ITC Infotech, a leading technology consulting and services company. Please contact him at vivek.chaudhri@itcinfotech.com