D2C is a strong trend that will change everything. Find out everything you always wanted to know from an expert's point of view.
D2C means “Direct-to-consumer” and it is a hard trend that will change everything. D2C is all about manufacturing and shipping directly to buyers without relying on any retailer, wholesaler or middlemen, and the digital world has made it the new cool way of selling products. In addition, the pandemic crisis made it even more obvious that autonomy is a precious asset and that digital technology is critical in logistics for tackling sudden challenges, meeting increased demand, remaining competitive, etc.
Backed by Simone De Ruosi, General Manager of ZeroGrey, a leading international eCommerce agency, let’s review six key questions any brand manager would like to answer when thinking about D2C.
What is the biggest challenge in terms of logistics for a brand willing to go D2C?
It all stands basically on one word: efficiency. Nowadays, final customers have high expectations. To meet them, sellers have to provide quick and reliable operations. When B2B logistics deals with pallets, standards, big orders and few customers, B2C processes are just doing the opposite with single items, personalised orders and potentially infinite customers. As Simone De Ruosi says, “In a D2C scheme, the warehouse has more to do with a supermarket than with a real B2B warehouse! Pick & Pack must be fully reset and express couriers must obviously cover the last mile”.
How long does it take a retailer to start to notice the benefits of becoming D2C?
Undoubtedly, time can be accelerated by investments, but the maturation of a new D2C approach typically takes at least six to twelve months.
What if the retailer willing to go D2C is already offering overnight delivery through his suppliers?
To remain competitive, this retailer needs to stick to the same conditions and offer the same service as a basis. Moreover, some white papers published by the main express couriers’ companies point out that consumers are also looking for more options like economy, next day deliveries, lockers, etc.
What should the retailer consider when it comes to warehousing?
As previously noted, B2C and B2B warehouses have a completely different architecture. Following the parallel he had drawn between a D2C warehouse and a supermarket, Simone De Ruosi adds that: “In a D2C warehouse, picking up can be easier, and packaging operations are often carried out manually because orders are not standardised and often completed by marketing items such as thank you cards, gifts, stickers or branded packaging for instance." Could automation be a solution in this transition?
Automation is definitely helpful but can be expensive. For warehouse architecture, pick/pack lines or sorters, investments are of six to seven figures and can therefore only be justified by business volumes. On the contrary, investments are far lower when it comes to software. “Having an eCommerce platform that instantly turns paid orders into warehouse movements is an affordable solution for SMEs and it's part of our job at ZeroGrey,” explains De Ruosi.
How to get prepared, as a brand, for individualised delivery and packaging?
In terms of delivery, creating a strong partnership with express courier firms can be of real interest for brands, in order to stay tuned and act well; all these companies actually have a specific department that studies eCommerce customers and defines new products and services according to their evolving needs.
Packaging-wise, it's a whole different story. As De Ruosi stresses, “Packaging should be seen as part of the marketing strategy rather than a simple operation since it carries the brand identity and allows specific one-to-one communication”.
To sum it up in a few words: to go D2C is smart but also challenging. It has to be properly managed so as to avoid any adverse effect.
A third-party logistics (3PL) like ZeroGrey
for example would provide continuity and help the company in the whole value chain, logistics included. It would take care of the eCommerce stock and provide the best experience to the final customers. By partnering with it, the brand simply gets more competitive, with faster delivery, fulfilment automation etc. Could you see a smarter way to fight against Amazon and major e-marketplaces?