The pros and cons of selling direct-to-consumer

Cutting out the middlemen, however, means that brands are solely responsible for all the retail heavy lifting. This is an area where electronic data interchange (EDI) has shown its value as part of a successful D2C strategy.

One of the most difficult eCommerce tasks is orchestrating orders at scale and ensuring the right product is in stock and can be sent to the right customer at the right address in the most cost-effective way possible. This is particularly difficult if brands are processing high volumes of low-value products.

A well-thought-out direct-to-consumer strategy transforms agility by increasing the speed-to-market for new products. If a brand can fast-track product development and distribution it can capitalise on lucrative new trends faster.

Without real-time supply-chain visibility and control, however, these insights can go to waste. That’s because brands and manufacturers relying on outdated email and Excel processes may not have the supply chain data confidence and agility to take action before an opportunity passes.

With EDI, however, brands and manufacturers benefit from accurate real-time stock data, telling them instantly if they can satisfy an emerging eCommerce demand. EDI enables retailers to switch trading partners faster to protect supply if an eCommerce sales spike is detected. They can also recruit new trading partners if they identify growing demand in a new geography.

When a brand’s enterprise resource planning system (ERP) is connected to a cloud-based EDI solution, however, key information (customer names, addresses, products and quantity) can be automatically shared without the risk of human input error.

Market-leading EDI software also include automatic address verification, ensuring that orders are sent to the right address first time, every time. Brands and manufacturers of all sizes know the importance of getting the basics right at scale if they are to protect customer lifetime value.

Dealing directly with the customer also ensures that brand retains control of the entire direct-to-consumer selling process. This includes end-to-end customer experience, order fulfilment, reputation management and after-sales care. There are no competing brands within individual D2C sales channels. The brand is responsible for making a winning product, attracting and marketing it effectively to customers, delivering the product, and owning customer communication and experience.

Direct-to-consumer also ensures the brand retains full control of the treasure trove of data generated during the customer’s path to purchase. Rather than basing value proposition solely on price, brands can build customer relationships easier and faster, generating emotional, personalised and value-added reasons to buy. This is possible thanks to access to a wealth of real-time insights, including new customer behaviours, sales trends and new markets.

Direct to consumer sales channels were enjoying double-digit growth pre-pandemic. Now D2C growth is expected to be even more bullish thanks to consumers’ increasing reliance on eCommerce. Brands and manufacturers wishing to compete on this new stage should adopt the right digital tools to fill the void left by the retailer. Scalable, cloud-based EDI that delivers a highly accurate real-time view of supply chain data is the perfect fit.

To find out more read our blog The 2020s promise to be the decade of direct-to-consumer

If you feel you would benefit from cloud-based EDI from Transalis, why not talk to us? You can reach us on 0845 123 3476 or +44 1978 369 343 (for international callers), or email sales@transalis.com.