Making The Hard Pivot: Transforming from B2B to D2C Online Sales

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Isaac Herman

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Making The Hard Pivot: Transforming from B2B to D2C Online Sales

13/01/2021 Categories: Articles

Should You Transform B2B to D2C Online Sales? In 2021, consumer-facing manufacturers are getting rid of the middlemen. Big brands across the country are pivoting to Direct-to-Consumer (D2C) business practices. What started as a trend has quickly transformed into an essential business practice. In fact, 81 percent of consumers plan to shop from direct-to-consumer (D2C) companies over the next five years. Big brands across the board, from Kellogg’s to Coca-Cola, have gotten into the game and are proving how successful this model can be.  D2C is a profitable long-term strategy that yields more predictable revenue streams. It inherently helps you nurture customer relationships, grow your worldwide brand, and develop products more appealing to the average consumer.  Increasingly, B2B companies on the sidelines are taking notice of this potential and exploring how to start their own D2C storefronts. In 2020 brick and mortar shopping was severely impacted by the pandemic, but D2C has emerged as a compelling pathway for boosting revenue. Implementing a successful D2C strategy is much more than changing up acronyms. It requires that companies evaluate themselves to see if they are ready for the pivot. Then, it means creating a strong online marketing and promotion plan and ensuring their new business direction does not interfere with other tried-and-true channels.  Making The Move To D2C The data looks suitable for pivoting to D2C: the market was on track to reach $18 billion in total eCommerce sales in 2020, up 24.3 percent from the previous year.  There are still significant advantages you automatically receive using wholesale distributors. Their distribution is already a well-oiled machine with features like 2-day shipping that consumers expect as standard. Name recognition is another advantage. If a customer is buying home supplies, generally their first thought will be to go to a Home Depot or Lowe’s since those brands have become household names.  The formula changes if a business is experiencing massive order volume. If a company can generate that much interest online, then devoting their products to traditional wholesale channels (which produce lower margins) makes less sense. One of Kensium’s eCommerce directors recently worked with a paint manufacturing company. They were selling through wholesale channels, but they also had unprecedented demand due to how much customers enjoyed the colors and quality of the paint.  They decided to bet on themselves and pulled all products out of their traditional retail channels to sell solely on their website. In just a couple of months, they improved their revenue by 150%. How did they do it?  The Necessity of Building a Brand for D2C From research to purchase, prospects innately place more trust in direct-sales manufacturers

D2C

quickly transformed into an essential business practice. In fact, 81 percent of consumers plan to shop from direct-to-consumer (D2C) companies over the next five years. Big brands across the board, from Kellogg’s to Coca-Cola, have gotten into the game and are proving how successful this model can be. 

D2C is a profitable long-term strategy that yields more predictable revenue streams. It inherently helps you nurture customer relationships, grow your worldwide brand, and develop products more appealing to the average consumer. 

Increasingly, B2B companies on the sidelines are taking notice of this potential and exploring how to start their own D2C storefronts. In 2020 brick and mortar shopping was severely impacted by the pandemic, but D2C has emerged as a compelling pathway for boosting revenue.

Implementing a successful D2C strategy is much more than changing up acronyms. It requires that companies evaluate themselves to see if they are ready for the pivot. Then, it means creating a strong online marketing and promotion plan and ensuring their new business direction does not interfere with other tried-and-true channels. 

D2C growth pic 1

Making The Move To D2C

The data looks suitable for pivoting to D2C: the market was on track to reach $18 billion in total eCommerce sales in 2020, up 24.3 percent from the previous year. 

There are still significant advantages you automatically receive using wholesale distributors. Their distribution is already a well-oiled machine with features like 2-day shipping that consumers expect as standard. Name recognition is another advantage. If a customer is buying home supplies, generally their first thought will be to go to a Home Depot or Lowe’s since those brands have become household names. 

The formula changes if a business is experiencing massive order volume. If a company can generate that much interest online, then devoting their products to traditional wholesale channels (which produce lower margins) makes less sense.

One of Kensium’s eCommerce directors recently worked with a paint manufacturing company. They were selling through wholesale channels, but they also had unprecedented demand due to how much customers enjoyed the colors and quality of the paint. 

They decided to bet on themselves and pulled all products out of their traditional retail channels to sell solely on their website. In just a couple of months, they improved their revenue by 150%. How did they do it? 

D2C consumers pic 2

The Necessity of Building a Brand for D2C

From research to purchase, prospects innately place more trust in direct-sales manufacturers and are more likely to buy from them than from a reseller. A recent survey supports this, with 60 percent of respondents preferring to research a product directly on the company’s website. Additionally, one-third of US consumers intend to allocate at least 40 percent of their shopping from D2C companies in the next five years. 

Like we mentioned before, brand manufacturers can capitalize on this credibility because they already have name recognition with their end buyers. But when you are pivoting to D2C, you need to build this brand recognition yourself. 

Our example paint manufacturing company knew this and immediately committed time and resources to social media marketing and content creation. By owning their marketing channel, the whole thing became about the experience. The company began creating video tutorials, Facebook Live videos, and even a paint subscription service called “Color of the Week.” 

The company now has an audience of over 300,000 people, all of whom are dedicated to the brand. Building this connection to their audience ensures that their brand becomes synonymous with quality in their customers’ minds, and the business continues to grow sales. 

D2C businessmen pic 3

D2C Expansion: Is It Channel Conflict or Cooperation?

Before you make the pivot to D2C, there is one more important issue to consider: What will the impact be on your other channels? Ask yourself: Will you be competing with your own distributors? Will you oversaturate the market between our efforts and those of our distributor partners?

However you approach it, work with your channels and sales partners directly to ensure the best possible outcomes for everyone.

Best practices include: 

  • Reduce intra-channel competition by putting a cap on the number of distributors in each region. 
  • By standardizing pricing and discounts, you can avoid price wars and maintain high margins for all channels.
  • Be as transparent as possible with your channel partners to avoid any miscommunications. 

Ready to make the move? Launching a D2C webstore in tandem with your B2B site means rethinking your business potential. It requires a lot of creativity, persistence, and motivations to do this successfully, but the rewards are clear. Numerous B2B companies have already found success in this D2C when they understand their market clearly, build a strong marketing plan, and selecting the right eCommerce platform. 

Kensium can help you make this decision. Kensium offers complete end-to-end solutions from the ERP back office to the front-facing eCommerce platform. Contact Kensium today.

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Should You Transform B2B to D2C Online Sales?

In 2021, consumer-facing manufacturers are getting rid of the middlemen. Big brands across the country are pivoting to Direct-to-Consumer (D2C) business practices. What started as a trend has quickly transformed into an essential business practice. In fact, 81 percent of consumers plan to shop from direct-to-consumer (D2C) companies over the next five years. Big brands across the board, from Kellogg’s to Coca-Cola, have gotten into the game and are proving how successful this model can be. 

D2C is a profitable long-term strategy that yields more predictable revenue streams. It inherently helps you nurture customer relationships, grow your worldwide brand, and develop products more appealing to the average consumer. 

Increasingly, B2B companies on the sidelines are taking notice of this potential and exploring how to start their own D2C storefronts. In 2020 brick and mortar shopping was severely impacted by the pandemic, but D2C has emerged as a compelling pathway for boosting revenue.

Implementing a successful D2C strategy is much more than changing up acronyms. It requires that companies evaluate themselves to see if they are ready for the pivot. Then, it means creating a strong online marketing and promotion plan and ensuring their new business direction does not interfere with other tried-and-true channels. 

D2C growth pic 1

Making The Move To D2C

The data looks suitable for pivoting to D2C: the market was on track to reach $18 billion in total eCommerce sales in 2020, up 24.3 percent from the previous year. 

There are still significant advantages you automatically receive using wholesale distributors. Their distribution is already a well-oiled machine with features like 2-day shipping that consumers expect as standard. Name recognition is another advantage. If a customer is buying home supplies, generally their first thought will be to go to a Home Depot or Lowe’s since those brands have become household names. 

The formula changes if a business is experiencing massive order volume. If a company can generate that much interest online, then devoting their products to traditional wholesale channels (which produce lower margins) makes less sense.

One of Kensium’s eCommerce directors recently worked with a paint manufacturing company. They were selling through wholesale channels, but they also had unprecedented demand due to how much customers enjoyed the colors and quality of the paint. 

They decided to bet on themselves and pulled all products out of their traditional retail channels to sell solely on their website. In just a couple of months, they improved their revenue by 150%. How did they do it? 

D2C consumers pic 2

The Necessity of Building a Brand for D2C

From research to purchase, prospects innately place more trust in direct-sales manufacturers and are more likely to buy from them than from a reseller. A recent survey supports this, with 60 percent of respondents preferring to research a product directly on the company’s website. Additionally, one-third of US consumers intend to allocate at least 40 percent of their shopping from D2C companies in the next five years. 

Like we mentioned before, brand manufacturers can capitalize on this credibility because they already have name recognition with their end buyers. But when you are pivoting to D2C, you need to build this brand recognition yourself. 

Our example paint manufacturing company knew this and immediately committed time and resources to social media marketing and content creation. By owning their marketing channel, the whole thing became about the experience. The company began creating video tutorials, Facebook Live videos, and even a paint subscription service called “Color of the Week.” 

The company now has an audience of over 300,000 people, all of whom are dedicated to the brand. Building this connection to their audience ensures that their brand becomes synonymous with quality in their customers’ minds, and the business continues to grow sales. 

D2C businessmen pic 3

D2C Expansion: Is It Channel Conflict or Cooperation?

Before you make the pivot to D2C, there is one more important issue to consider: What will the impact be on your other channels? Ask yourself: Will you be competing with your own distributors? Will you oversaturate the market between our efforts and those of our distributor partners?

However you approach it, work with your channels and sales partners directly to ensure the best possible outcomes for everyone.

Best practices include: 

  • Reduce intra-channel competition by putting a cap on the number of distributors in each region. 
  • By standardizing pricing and discounts, you can avoid price wars and maintain high margins for all channels.
  • Be as transparent as possible with your channel partners to avoid any miscommunications. 

Ready to make the move? Launching a D2C webstore in tandem with your B2B site means rethinking your business potential. It requires a lot of creativity, persistence, and motivations to do this successfully, but the rewards are clear. Numerous B2B companies have already found success in this D2C when they understand their market clearly, build a strong marketing plan, and selecting the right eCommerce platform. 

Kensium can help you make this decision. Kensium offers complete end-to-end solutions from the ERP back office to the front-facing eCommerce platform. Contact Kensium today.