6 D2C strategies to strengthen customer engagement
From cutting-edge startups to iconic global brands, retailers are selling directly to customers more than ever, generating a $165 billion revenue opportunity. Partnering with 451 Research, we looked at current D2C trends and discovered where a strong payments strategy is a key driver for success.
Nearly $80 billion in potential sales is lost each year as a result of friction at online checkout. Which is why merchants surveyed ranked “modernizing payment infrastructure” as the #1 priority for successful D2C relationships.
By going direct-to-customer, smaller brands can bypass larger distributors who traditionally held all of the market share. Having both an online and physical presence expands potential revenue exponentially. Our analysis indicated that $90.1 billion in sales is influenced by the availability of cross-channel buying options.
Casper, the Manhattan–based mattress company, is a case-in-point. In 2014, they bucked the trend and started selling mattresses online. Three years later, they decided to make the transition from online to physical retail. Elinor Shram, Casper’s Experience Design Manager, observed that the sale of a mattress “really hinges on that conversation that you have with the store associate...the ability to have that conversation anywhere in the store makes [the sale] so much more natural and easier.”
Brompton Bikes is another great example of a business that’s found the right balance. This British folding bike company implements a D2C approach while also working closely with independent, expert retailers. In the U.S. alone, Brompton has a network of 130 independent dealers carrying their products. They know and use the wisdom of local dealerships, especially within cycling, where the store changes according to the local terrain.
Since the onset of COVID-19, more consumers than ever have pivoted to digital channels to shop and transact. Low- and no–touch shopping purchase experiences have become part of our new normal, supporting health protocols while also offering fast and efficient convenience.
Customers these days seek frictionless buying experiences and are willing to offer loyalty in return. Nearly half (42%) of those surveyed said that the availability of buying online and picking up in-store would significantly influence their loyalty to a brand, and more than half (55%) said they preferred to use a digital wallet over other payment methods.
Ease and choice at checkout are critical factors in the D2C platform. In our survey, 42% of consumers said that they strongly agree that if a brand has limited payment options, they are less likely to shop with that brand in the future. The percentage rose to 60% for those with an annual income of over $100,000.
Conversely, poor payment experiences jeopardize customer loyalty. More than three quarters (77%) of brand advocates have abandoned a purchase resulting from what they perceive to be a negative payment experience, like having to fill out a lengthy payment form. One-click checkouts and credit card information storage both promote faster checkouts and return visits.
Today’s technology has the capacity to offer a personalized customer experience — from predicting items you might like and remembering previous purchases to automatically filling in your personal and payment information. Our analysis revealed that $74.8bn in sales is influenced by a personalized experience with a D2C brand. Just as we enjoy going to stores where we feel a sense of familiarity and consideration, so do customers with D2C online brands.
For businesses integrating a D2C approach, payments data can provide information otherwise unavailable. By analyzing a single store’s performance, for example, you can see how many new or returning customers you’re attracting, and what level of returns or refunds to expect. You can also compare these numbers with sales volume in resellers and weigh up what works best for your business.
By accepting payments across all sales channels, you open yourself up to a wide range of consumers and revenue streams. Customers appreciate a range of purchasing options — on-line, in app, or in store — giving them maximum flexibility and a sense that your business is there to meet their needs.
Going direct-to-consumer, via online or physical stores, opens businesses up to online cross-border shoppers and tourists. The U.K.–based cosmetics company LUSH, for example, doesn’t operate in Asia due to regulations, yet has huge global brand recognition. When Asian tourists visit Europe, they’re eager to shop at LUSH stores. Offering payment methods that tourists are comfortable with, like WeChat Pay and Alipay, become essential. Adyen’s payment platform makes it easy for retailers to accept a range of payments via a single system and connect to payment methods across the world.
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