Let’s take a look at the different sales models on the table, and how you can tailor your retail strategy to fit the needs of your target buyers.
D2C vs B2C: Advantages of Each
The starkest difference between D2C and B2C is the use of an intermediary with the B2C model, usually in the form of a retailer like Amazon or Target. In contrast, D2C skips over this stage and sells to consumers directly. Many businesses utilize both models starting with a single model and adding the second as they expand.
Working with a retailer means yielding some percentage of your product's profit to the intermediary. With D2C, you keep what you make, and you have complete control over your product's branding, marketing, and sales strategies. In the modern business environment, the value of customer data is at an all-time high and D2C models offer direct, unfettered access to that data. This can be used to create a continuous feedback loop to define and refine the product offering.
Yet mastering all elements of business management isn’t simple, and B2C models can take some of that stress off your hands. Having a retailer distribute your product reduces the supply chain management challenges that D2C brands face and removes the unknown factor of how much stock to produce relative to demand. Leaving sales, marketing, and branding to the retailer can also be a boon for businesses with limited experience in these disciplines.
Additionally, intermediaries like Amazon or Target come with built-in brand recognition and wide reach, helping to boost sales with cautious consumers or those in far-flung locations.
D2C vs B2C: Adapting to Consumer Preference
D2C models need to incorporate the reasons why this model appeals to certain demographics into their strategy. Seven in 10 US millennials actively consider company values when making a purchase (according to Forrester research) and their shopping habits are uniquely suited to D2C models, as they are more likely to buy from unknown brand names or via new purchase formats. When trying to win over a millennial audience, prioritize a progressive company image and convenient buying options.
If you’re opting for a B2C model, remember that consumers shopping via larger retailers like Amazon often cite product variety and availability as the main appeal, so well planned logistics are key. In addition, 43% of all consumers would pay more for greater convenience, according to PwC research. Removing potential purchase barriers and keeping product info and FAQ pages highly detailed should be a core goal.
D2C vs. B2C Marketing Strategies
Businesses selling through a merchant need to drive business to the checkout, which will be at a destination other than their own website. Proven B2C models selling through a merchant will want to focus on traffic and acquisition to these platforms.
A B2C marketing plan needs to emphasize advertising as a mainstay acquisition channel. Hopefully, the marketers at these organizations understand their target audience in a more intimate way than the third-party merchants, so the ads run by the business itself will land on a more accepting and willing audience.
D2C models trade mass, low margin sales, for less, higher-margin sales, but the initial lift can be the most challenging obstacle for them. Use SEO as a cheap and effective way to earn traffic directly to product pages. Smart D2C marketers will match keywords to product pages, and optimize their titles and copy one by one. This will ensure that as the site grows it will earn compounding traffic, straight to product pages.
SEO will drive new business to the site, but the job of the D2C marketer is to then create a delightful experience for customers so they will return and make a repeat purchase.
Both B2C and D2C models offer unique benefits and an edge for certain consumers. The main differentiator between B2C and D2C marketing models is that B2C should prioritize acquisition and traffic, while D2C will benefit the most from branding and customer loyalty.