Top Challenges in D2C Business Model and How to Overcome Them

Direct-to-consumer business model, or as we most popularly call it D2C, is a no-intermediary business model that aims at selling directly from the manufacturer to the consumers from their web store. Here, the need and dependency on the middleman are eliminated. Where a traditional business model would have agents, distributors, wholesalers as well as retailers, the D2C business model has been developed as an alternative to the traditional.

Over the last two years, this model has observed a sharp rise among manufacturers and has been increasingly seen as an aid for the future. People are noticing the advantages of this model due to its digital adaptation. The pandemic was a huge enabler of such a revolution of shifting from offline to online shopping among consumers. Since this business model is relatively new, it comes with its challenges. With challenges though, come solutions too.

Let’s dive deep into the realm of the D2C business model to understand the business challenges faced.

Challenges in Direct to - Consumer service

1. Competition (Product Differentiation and Originality)

Over the last few years, the demand for online products has gone up incomparably. Earlier people used to go to the market, visit various shops, and compare products and their prices and once they were satisfied with the product on the whole only then did they buy it. But now, the times have changed. People just need to open an app to visit multiple stores in one go virtually. Multiple online ventures have hundreds if not thousands of products to offer, with similar USPs and cut-throat prices. This makes it even more difficult for a D2C business to differentiate its product from the already existing ones without an offline presence. On top of all this, having the same target audience doesn’t help them either.

Growth Jockey's solution

Staying on par with the competitors can get very overwhelming, especially if you’re starting anew. Keeping a few pointers in mind to maintain originality might help:

• Take any one area, be it price or service and set it apart from all your competitors. Give something to your audience that they just can’t match with anybody else. Make your company’s goals and motto come through very concisely through this proposition.

• Your website is the first thing to interact with your audience, make sure it’s attractive and not too complicated to navigate. This is the point where you could lose or win in one go.

• If possible, try to cater to a niche audience. This will help you become dominant among the rest of your competitors.

• We at Growth Jockey can help you solve this problem by creating a personalised framework with unique solutions as that is what will help you stand out among your competitors.

2. Omnichannel Shopping

Consumers have become tech-savvy on the go. They are present nearly everywhere, on every platform and as the famous saying goes, where the consumers are, the brand needs to be there too. If your D2C brand isn’t on the platform that your target audience is, you’re, without a doubt, losing opportunities. It will be all the more important for you to be on all the channels if your competitor is present there too. You certainly want an edge over them, right?

How Growth Jockey can solve this problem

Use data to analyze where your target audience is and then accordingly fan out your presence. Consumers just expect an effortless shopping experience, be it on their phone or a website on their laptop. Try to be flexible when it comes to sharing your valuable content with the consumers on any channel they are comfortable with.
Growth Jockey tackles this problem by techifying your business model and we will help turn your vision into reality.

3. Advertising & Growth

Every brand wants to set its product and services apart from the heed and the best way to do that is by advertising. This helps the consumers know what the brand stands for and what they help the consumers achieve. D2C businesses don’t have an offline presence and thus it becomes even more important for them to have a strong online presence. But there’s a challenge that D2C brands will doubtlessly face. Growth by advertising comes with a very high cost, one that most Direct-to-consumers businesses are unlikely to meet and pay.

Growth Jockey's effortless solution

A D2C brand can churn out valuable first-party content in the form of blogs, podcasts, videos and so much more on their website. Comprehensive content that raises brand awareness among consumers acts wonders if done correctly.
Growth Jockey can help you through and through with their out-of-the-box business and marketing strategies so that you can level up and meet your goals.

4. Cost of Acquisition & Maintaining Brand Loyalty

One of the other problems faced by D2C businesses is acquiring new consumers and expecting them to stay loyal to the brand. None of this happens overnight. D2C brands need to create a connection with their consumers on a deeper level. Advertising digitally and traditionally is one way but that’s not it. Competitors are there to get your consumers at every level and thus leaving you to pay high costs literally and otherwise.

Growth Jockey knows how to overcome this

One of the ways to overcome such a challenge is by using multiple strategies to make consumers stick. Instead of just adhering to one way of life, mix things up. A great mix of marketing strategies along with digital and traditional marketing consumers can be acquired at a much lower price and can be made loyal to the brand’s service too.
Here at Growth Jockey, we understand the necessity to manage risk and ensure healthy business growth with sustained superior performance. Thus, we help you maintain brand loyalty.

5. Coping with Fluctuating Consumer Demand

Nothing in today’s market is permanent, especially not consumers’ demands and choices. Consumers are quick to switch brands, they just need a single nudge to do so. Their payment channels are set to ready and their minds are likely to change every minute. In such a scenario, D2C brands are setting themselves up for nothing less than a blood bath.

Growth Jockey's seamless way out

To overcome this challenge associated with D2C businesses, one needs to stay on top of every technology possible. This helps them give their consumers a ‘different’ experience. One way to do this is to incorporate AR or VR technology into the marketing strategies. The key is to pounce on every feasible opportunity possible to make the shopping experience as seamless as possible for your target audience.
We at Growth Jockey solve this problem by understanding where you are coming from and taking into account all the risks your business is prone to. After a customized risk analysis, we will provide you with innovative solutions.

Conclusion

Direct-to-consumer services are relatively new and coming and thus need to optimally design their strategies to cater to their audience base as precisely as possible.Though as we observed above, this will come with several business challenges but they can always be overcome if done so rightly.
There are several tools and techniques online to help you improve your D2C business, one of the best being Growth Jockey. They will help you unlock your true potential, literally.

Achieve your business goals in no time with Growth Jockey today!