Why businesses need to think deeper when moving into direct-to-consumer channels
How lock-down has changed the market
Restrictions as far reaching and sudden as corona-virus-induced lock-downs were always going to distinctly alter livelihoods and the economy. To comply with social distancing regulations, non-essential commercial operations must now be conducted from home, with high-street retailers, restaurants, bars, and gyms all forced to close.
Consequently, there has been an unprecedented shift towards e-commerce and digital. For instance, Leon, who markets itself as selling ‘naturally fast food’, has pivoted its business model, now delivering healthy ready meals across London. In a similar vein, Uber Eats is offering free delivery on all convenience store orders, supplying households with essential products while there are restrictions on movement.
But the most prominent changes have occurred in the B2B sector, with wholesale grocery retailers transitioning into the consumer market. For instance, Heinz has adapted its business model, now supplying its range of household staples direct-to-consumer with the initiative ‘Heinz To Home’. Cutting out the middleman is a move that provides significant benefits to customers in current circumstances, helping to solidify loyalty in the long run. Changes such as these are part of a rising global trend, and because businesses can’t predict how long lock-down regulations will be in place, it is a trend that shows no signs of slowing down.
How you can quickly ramp up your e-commerce architecture to keep pace
Customer behaviour shows that this e-commerce rush has affected some sectors more than others, with grocery sales standing out for their growth. A list of the 100 fastest growing categories in e-commerce in March 2020 has found that grocery products accounted for nine of the top 20 categories. The same list also saw 10 of the top 25 categories relating to home care products.
These behaviours are unsurprising. Naturally, consumers have purchased more groceries and home care items in the last month because these products are essential while on lock-down. What’s interesting, however, is these initial findings signify the dominance of existing online retailers.
This consideration should serve as a warning to businesses moving into direct-to-consumer channels: if you want to survive in the digital marketplace, you need to seriously invest in your digital estate or else you won’t compete with what’s already there. In other words, you need to adapt fast.
To do this, you need to develop your business’ digital capabilities using principles of an innovative proposition that differentiates your business from competitors. Many organisations that had previously been reluctant to move into consumer channels have been forced into this position by lock-down regulations. The question they now need to ask themselves is how can they accelerate this process while ensuring the digital restructuring is sustainable?
A headless e-commerce approach offers the best means of achieving this. It allows you to build your digital estate from the ground up and with multi-channel delivery. This freedom means your designers and developers can create truly innovative UX designs that can compete with those of existing online retailers. But for those more digitally mature businesses, industry leading e-commerce platform, Commercetools, has just launched its Accelerator tool, which helps enterprise businesses solve their retail pain points faster.
Customer experience should be the heartbeat of any business model alteration
At this early stage in lock-down, it seems like many organisations are only adapting their business models to survive in the short term. This is a pragmatic approach, but not a long-term solution because it doesn’t account for the inevitable paradigm shifts in consumer behaviour that we could see in a post-corona-virus world.
Of the brands that pivot their business models, the real winners will be those that are ‘thinking deeper’ about their business model, those that are planning for the long term. Lock-down has acted as a catalyst for increased e-commerce activity and digital improvements, something that will have a lasting commercial impact as consumers expectations of digital experiences only increase post-lock-down.
Businesses that ‘think deeper’ when pivoting will re-imagine their relationship with the consumer and pivot towards a sustainable digital business model that delivers meaningful solutions to address customer needs. This requires innovating propositions and services, which could be through offering a subscription-based delivery service, developing self-service chat bots on an app, or, in this current climate, adding a bolt-on to a website to prioritise delivery slots for NHS staff.
One thing is certain: going direct-to-consumer will not have the desired effect if your business model isn’t driven by Customer Experience. For decision makers, the challenge now is rethinking the customer relationship using creative and innovative digital concepts.