Should My Brand Have its Own D2C Site? Pros & Cons

George Hatch

September 9, 2020

Amazon, Walmart Marketplace, eBay, Instagram—in the digital age, there is no shortage of channels to sell your products on, nor should you immediately rule any of them out. An omnichannel ecommerce approach allows you to give shoppers a seamless customer service experience, it raises your brand recognition, and it increases profits. That’s why it’s important to thoughtfully consider all of your options.

So what about selling on a direct-to-consumer (D2C) website? Here’s what you should know before making the leap.

Pros of the direct-to-consumer strategy

The D2C approach to business is extremely attractive to brands and manufacturers, and for good reason. D2C distribution, when it’s successful, allows manufacturers to cut out the middleman and enter the market directly to sell their goods, giving them greater control over their brand, their marketing, and their reputation.

Furthermore, a D2C site allows brands to offer as many of their products as they’d like at any time of the year (they aren’t limited by the seasonal/limited needs of retailers) and it streamlines the customer service experience. Interactions with customers are more direct, allowing brands to understand them better and address their needs more efficiently. Gone is being at the shifting whims and mercy of marketplaces like Amazon or Walmart. Instead, you’re providing a quality product with a quality experience uniquely your own.

Apple is an example of a D2C brand for whom this approach works very well. Apple has exceptionally good control over their products and the way their products are distributed. Customers know them and trust them to deliver a high-quality product, so they’ll traffic Apple’s website to make their purchases.

Apple D2C site pros and cons of direct to consumer | Pattern

Apple’s D2C gives customers a more intimate experience with their brand than they’d get on sites like Best Buy or Amazon, and because Apple customers are so loyal to the brand, it’s an experience they’ll seek out online.

Cons of the direct-to-consumer strategy

That said, the D2C approach isn’t a quick and easy path to success. It’s important to keep in mind that entering this space puts you in direct competition with sites like Amazon and Walmart. You have to consider what you’re offering that customers could not get from these places or from other places offline.

Because creating a website can be so expensive, it’s important to strategize about what does and does not work for your products and determine logistical factors that may aid or be an obstacle to your brand.

From just a pure revenue source or ecommerce channel growth perspective, I would argue that most brands probably shouldn't have a D2C site, unless there’s some sort of a niche or they’re going to be doing it in another unique way.

Is a D2C site worth it for you?

The equation that brands should focus on when considering if a D2C site is worth it is:

Purchase Velocity (or usage)/Price

If an item is a high-usage, low-priced item, it will be difficult to sell on its own on a D2C site without a specialized experience. If your brand sells a low-usage, higher-priced item, a D2C may be a great fit.

High usage, low-priced items

Low cost products with high usage, like toothpaste, soap, or pens may not make sense to build a D2C site around because customers are getting these products from other sources like Amazon without the additional costs for shipping, and they’ll have little incentive to purchase these products directly from brands.

I don’t know what consumer is going to go out of their way to type in “Snickers.com” to buy Snickers only from Snickers and wait for that package to show up on their doorstep when they could add that product to their Amazon or Walmart or whatever their normal routine grocery cart is.

If you do have a high usage, low-priced item, one thing that might make a D2C site worth it is building a unique customer service experience around your product, such as personalized product packaging, a monthly subscription box, or a one-time holiday gift bag.

Billie D2C site, subscription service, D2C hacks and tips | Pattern

Billie is one brand that sells a high-usage product on a D2C site that might otherwise not work except for the unique customer experience. Billie manufactures razors, and they offer a $9 subscription service that supplies customers with four new razor blade cartridges each month. Since their customers are already regularly buying razors, Billie’s competitive price point, their free shipping, and their monthly delivery service give them an edge up and a great use of their D2C site.

High priced items and luxury goods

For items with high price points and a low purchase velocity, a D2C site may be a great fit. Having a website for these goods allows you to build an intimate customer experience invested shoppers can look forward to and transactions shoppers can trust. This is especially important in the world of luxury goods.

As a consumer, I’m going to want to go to the source. I’m going to want to buy the Gucci bag, and I want it to show up on my doorstep in a Gucci box. I want to have that opening experience that’s very unique and custom, because I just dropped some serious cash, and there’s no way I want to risk that on Amazon or Walmart.

Gucci D2C experience, pros and cons of D2C for ecommerce brands | Pattern

The experiences you build around your brand on your D2C can also increase your name recognition and attract new customers.

Other products that may thrive with a D2C model are tech products, furniture, jewelry, and luxury goods, to name a few.

Consider logistics and shipping

Price points and product usage aren’t the only things you need to consider when considering a D2C. It’s also important to look at the logistics of distributing your product, particularly if you sell perishable items like meat or vegetables. It’s difficult for consumers to trust that products like this will ship to them without spoiling or being tampered with, which makes building a D2C experience around them a big risk.

If I sell chicken breasts in a grocery store, I’m not going to do the D2C site, because it has to ship cold, and the logistical challenges and the cost to ship are just so immense that it doesn’t make sense.

The other thing to look at is the cost to ship your products. When it comes to high-velocity, low-priced items, it’s essentially mandatory that brands offer two-day shipping, otherwise they won’t be able to compete.

If you can’t make that happen financially, you probably shouldn’t offer a D2C site. The more expensive and less volatile a product is, the less necessary two-day shipping becomes.

With the right plan and the right product, a D2C website can be a great channel to grow your brand and the customer experience with your brand. For more information on how you can start a D2C site or more resources for growing your business, contact our Pattern experts below.

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Sept 20, 2022

Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)
Sept 20, 2022

4 Ecommerce Consultant Must-Haves

Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces. 

Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.

So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.

Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products. 

What is an Ecommerce Consultant?

An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.

An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.

Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.

1. Brand Obsession/Specialization/Passion

At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services. 

2. Proven Results

It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.

3. Wide Range of Marketplace Expertise

It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.

4. Network of Resources

The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.

Achieve Your Ecommerce Goals With Pattern

Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces. 

With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.

Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.

Sept 15, 2022

The 3 Tmall Metrics That Every Brand Needs to Know

If you’re interested in expanding your brand internationally, you’re probably familiar with Tmall. Tmall is Asia-Pacific’s (APAC) largest marketplace, and indisputably the biggest ecommerce powerhouse in the world. It represents a huge opportunity for many brands, but entering the space is also a big challenge to take on.

At Pattern, we recommend brands looking to enter international markets should first focus on dialing in their domestic presence. Once you’re satisfied that your brand is well-represented and optimized locally, you’re ready to think about tackling new regions, like APAC, and launching on marketplaces like Tmall. Our top advice for entering Tmall is to understand and strategize around its three most important metrics: service, delivery, and content.

What is Tmall’s Detailed Seller Rating (DSR)?

Service, delivery, and content ratings are the three elements that make up Tmall’s Detailed Seller Rating (DSR) score. Each component is scored on a scale of 1-5 that is displayed publicly on your brand’s Tmall flagship store page. This is meant to help consumers decide whether or not to purchase your products.

Why DSR Determines Success on Tmall

DSR scores are important because they’re highly influential in driving conversions—customers see DSRs as a way to quickly understand if a brand is trustworthy and worth buying from. They also matter quite a bit to Tmall itself—they monitor these scores and will take action to close flagship stores with low scores.

Let’s go over each element of the DSR score and some steps you’ll need to take to achieve high ratings.

DSR Score Elements

1. Service

Service is a huge ecommerce component in APAC marketplaces. In most other regions, product listings are static, and consumers use content and reviews to make a decision about what to purchase. On Tmall, consumers want to interact with your brand and test its validity before buying—each transaction takes at least one human interaction to convert.

So, to get a great service rating, you’ll need to have a large, established customer service team dedicated to Tmall sales that can offer real, human touchpoints and very fast response times. To get an idea of the speed your agents should be capable of producing, in our Tmall benchmarking exercise, 92.5% of brands’ customer service agents replied to queries via live chat within 30 seconds, 5% replied within one minute and the remaining 2.5% of brands took longer than a minute. So, look for a Trade Partner (TP) that has enough resources to compete with those numbers, support your sales, and maintain a good DSR score.

2. Delivery

Another thing you’ll really want to focus on is a high-quality delivery experience for consumers. As in other regions around the world, Tmall consumers have high expectations for their delivery experience. In our Chinese consumer polling report that targeted consumers buying from Tmall Global, we found that 6% expected same-day delivery, 15% expected next-day delivery, and 46% expected 2-5 day delivery.They want to receive their products fast and they want the products to be undamaged and pristine upon arrival.

So, to achieve a high score for your delivery capabilities, we highly recommend partnering with a TP or ecommerce accelerator like Pattern (which serves as a TP) who has the ability to facilitate your distribution. Make sure your TP has the right infrastructure in place to support high-quality logistics experiences for all of your consumers—they should have an established, well-oiled delivery process in place and the capability to fluidly add you to their current fulfillment system.

3. Content

As in every digital marketplace, content is a huge component of the decision-making process for consumers on Tmall—they can’t touch your product with their hands or see it in person before buying, so it’s important they’re empowered to make a good decision on whether or not to purchase based on the videos, images, and copy.

The goal is to make all of the content and relevant information on your flagship site easily-accessible—consumers should be able to visit your page and make a decision about whether or not to buy without navigating to a new site/page and taking their conversions with them. Images with text and extensive product details are a great way to do this, as well as making sure your service team can speak to all aspects of your product with any consumers (via text or chat).

Expand Internationally With Pattern

As the world’s foremost brand partner for ecommerce acceleration, Pattern truly understands the significance of international expansion. With regional offices around the world, Pattern knows how to successfully launch and grow brands on Tmall and other marketplaces, with the data, insights, and marketplace intelligence to build the metrics that matter. 

It’s important to have a fantastic brand presence, a knowledgeable guide, and a clear go-forward strategy for your best chance at success. With our in-country resources, expert teams, and extensive experience in growing brands around the globe, Pattern can help you get there.

Set up a call to get your international expansion strategy in motion.