Direct to consumer (DTC) brands have become much more popular in the last few years. As e-commerce companies thrive, there is less need for a middle man in retail.
However, there are many challenges that can affect DTC businesses. One of the main challenges in the industry is the need for customer retention. Of course, any business wants and needs to retain loyal customers, but it is particularly important for DTC brands.
Because these businesses tend to sell more or less niche products, there is typically a cap on customer growth. This means that the pool of people they are selling to will eventually run dry, limiting their ability to grow as a business. That’s where DTC retention comes in. If your DTC brand can maintain the customers, it already has, it will maintain a recurring revenue and thus be able to grow and expand.
Now, how do you retain customers? That’s the tricky part, but there are solutions. Here are two major points to implement into your DTC business to make sure that you maintain maximum DTC retention.
Quick Fulfillment
Being quick with fulfillment is imperative to retaining customers. When you go to a store, you have the convenience of immediately available products, so as a DTC business, it is important to do your best to match that convenience.
Having such reliable service will drive DTC retention because your customers will know they can always count on you. They can be sure that when they need or want your products, they will be available.
Offline Preparation
Offline preparation involves everything that goes into preparing a product to be manufactured. This includes choosing suppliers and component manufacturers, production centers, and laying out the specifications involved in creating a product.
This kind of preparation is especially popular with apparel companies. Textiles and spec templates are prepared early, so when you need a piece of clothing manufactured, it is ready to be put together.
While a production chain is in fully-optimal condition, it runs smoothly. So smoothly, in fact, that the average consumer doesn’t realize it exists. It wasn’t until the recent Covid-19 Pandemic and even more recent food and fuel shortages that the average first-world consumer finally noticed something off in the supply chain.
A supply chain disruption occurs when something happens to slow down materials or production before a product makes it to consumers. This can happen during times of political or social turmoil or because of national disasters.
Obviously, these disruptions can have extremely negative affects on your DTC business if your goods are being slowed during production. Manufactured can help prevent this slow-down in your process, however.
In our offline preparation process, we diversify our supply base. By doing this, we can guarantee that if the disruption is with one of the suppliers, only one component will be affected, not the whole product.
Obviously, even one slowed component affects the whole chain, so to further prevent any hiccups in the operation, we also identify backup suppliers. For example, if you are producing shoes, and a hurricane hits your shoelace supplier, we will already have a backup shoelace supplier ready to go.
Our offline preparation doesn’t stop with the suppliers, though. To make sure we are doing everything we can to make the production chain of your goods as smooth as possible, we are partnered with leading logistics partners. Our experts will find solutions in case of a disruption to keep production on track and on-time
Appropriate Shipping Methods
Another aspect of the supply chain that is important to note is the shipping of the products or supplies themselves. This affects speed because even if there is no disruption, the speed of the mode of transportation itself will affect shipping time. For this reason, you must choose what shipping method is right for you.
There are two main shipping methods to choose from: air vs ocean. Air transportation is more expensive but can pay off in speed. It is best used for lightweight products which are manufactured overseas and time-sensitive items.
Ocean freight is the less expensive but significantly slower route. However, this method is still a great method to be utilized. It is best for heavy items which are shipped in from overseas. These can either be finished products or supplies and parts ready to be assembled in the United States.
Determining which form of shipping is best for you requires a deep understanding of demand, logistics, and supply chain management. Manufactured, partnered with our logistics experts can walk you through this mess and help you to determine what is best for you and your business.
High Quality Products Drive DTC Retention
If your DTC business produces high quality products, you are more likely to retain customers. It will instill an appreciation for your product and thus your brand, creating customer loyalty.
However, you often need more than just a great long-lasting product if you want customers that keep coming back. If you have a great product that will last forever, your customers won’t need to come back because your product is just that indestructible. The best way to solve this is to develop a quick consumption product to go along with it.
For example, a company called Spinn Coffee developed a high quality, durable coffee maker. The machine should last years, keeping customers from having to buy another one.
But Spinn also sells coffee — that’s their quick consumption product. It creates a cycle of loyalty. Customers love the great coffee machine, making them partial to Spinn, so they buy their coffee. Their coffee runs out, so they buy more in a week or two. Thus, they become a “retained” customer.”
Manufactured can help with both steps in the cycle. We will run checks and ensure quality in the long-lasting item. Then, we will help find the best logistics solutions for the quick consumption items. It’s a win-win.
No matter where you are in your manufacturing process, Manufactured can help. We use our worldwide network of suppliers, production centers, and logistical experts to help you deliver the best quality products at the best possible time.
Learn more about Working Capital, Manufacturing Equipment Financing, Inventory Financing for Startups
- Image Credit:
- Featured Image, Pexels
