What’s in store for direct-to-consumer ecommerce in 2021?

Misha Pabari

February 10, 2021

Pattern’s Strategy Director for EMEA Kerry Lee recently hosted a virtual roundtable discussion alongside senior executives from leading online mattress retailer Simba Sleep and FMCG giant Kraft Heinz on the opportunities and challenges for direct-to-consumer ecommerce in 2021.

If you missed our webinar last week, here is your recap on what to expect from direct-to-consumer ecommerce this year, plus top tips on how to drive traffic to your site in 2021.

Launching a direct-to-consumer site in 6 weeks from scratch

One of last year’s biggest UK direct-to-consumer ecommerce success stories comes from Kraft Heinz. It launched its first D2C site, Heinz to Home, in just six weeks; offering locked-down customers bundles of its core range of tinned foods and sauces, plus free delivery for NHS staff and essential workers.

Head of Ecommerce for Kraft Heinz, Jean-Philippe Nier tells us how his team managed the set-up of the site and overcame what is typically considered to be a difficult and complex task for FMCG brands:

“The Heinz to Home direct-to-consumer channel wasn't set up in a bid to compete with e-retailers. Instead, it was born in the context of the pandemic to solve a consumer problem. Our goal was to launch with a simple proposition with speed and agility whilst continuously improving aspects of the site and showing eagerness to innovate with new products and marketing campaigns to drive traffic to the site."

He added: "Most important to us was that we were not compromising on the customer experience through the site. Since launching last year, we are pleased to be able to say that the channel has had a positive halo effect on the overall business.”

Understanding your customer’s needs is crucial to success

COVID-19 restrictions forced more people to turn to ecommerce in 2020 and online retail was said to have grown by 11% over the course of the year. Both our panellists witnessed significant growth across their direct-to-consumer channels, however this did not come without its challenges.

Simba saw its sales hit £100 million in 2020 despite the challenges brought about by COVID-19. When asked of his key learnings from the past year, Marketing and Ecommerce Director for Simba, Jon Moore explained how understanding the changes in your industry and adapting to meet those needs played a role in their success.

He said: “Understanding our customer’s mindset was central to our success. While initial demand for our products dropped during the start of the pandemic, consumer behaviour changed over the months and we found that being aware of search demand trends was hugely important for our business and allowed us to adapt accordingly. Likewise, taking advantage of lower channel and marketing media costs meant we could focus and invest in growing our brand awareness metrics, which are closely aligned to our revenue metrics.”

Top tips for direct-to-consumer ecommerce in 2021

There’s no denying that spending has shifted to digital channels since the onset of COVID-19, and this behaviour is set to stick as research shows that approximately 70% of consumers plan to maintain some or all of the new shopping habits they adopted during the pandemic. With that in mind, we asked our panellists for their top tips for scaling your direct-to-consumer channel in 2021.

Simba’s Jon Moore directed his advice to those selling big-ticket items, as Simba does: “Customer sentiment is very important for our business. For us, this means understanding customer pain points and trying to solve them. Secondly, I believe brands and retailers should continue to invest in awareness and brand-building to drive traffic to your sites. And finally, developing a close relationship with your suppliers will be invaluable in these uncertain times.”

Similarly, Jean-Philippe Nier from Kraft Heinz gave his top tips for success: “First and foremost, I would say brands should think of their D2C channel as a marketing and data insights channel, rather than just a sales channel. In doing so, there is more long-term gain for your business. My second tip would be to remain obsessed with improving your channel and platform using the data gleaned to scale your business. Lastly, I would encourage brands to be brave and try whatever it is they may be thinking of trying, whilst learning from any mistakes made along the way.”

Nearly a year on from the onset of the pandemic, the world is still experiencing conditions where our ability to shop physically is limited. It is now more important than ever that brands invest in their digital capabilities as direct-to-consumer ecommerce plays a bigger role moving forward into the new year.

Watch the full replay of our webinar with Simba and Kraft-Heinz here to learn more about the growth both brands experienced last year, and how they plan to scale their direct-to-consumer channels in 2021.

To discuss how Pattern can help to define your digital strategy, trade your direct-to-consumer website or support your sales on marketplaces please contact us here.

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Sept 6, 2022

Global Ecommerce Weekly News: 6th September 2022

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Aug 30, 2022

Global Ecommerce Weekly News: 30th August 2022

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Aug 23, 2022

Global Ecommerce Weekly News: 23rd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to add mental health support to primary-care service Amazon is set to move into mental health therapy with its primary-care division, following its recent acquisition deal of One Medical. The plan is to partner with virtual behavioural therapy service, Ginger, to offer its Amazon Care users with on-demand access to mental health services, licensed therapists and psychiatrists. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/11/amazon-plans-to-add-mental-health-support-to-primary-care-service/) GMB union calls for £15 an hour minimum pay at UK Amazon warehouses Amazon recently offered its warehouse workers a 3% pay rise, which in comparison to the June inflation rate of 9.4% left employees disappointed. Following this, hundreds of Amazon warehouse workers stopped work last week, protesting against the minimal pay increase, seeking a minimum of £15 an hour. Recent protests consisting of employee walkouts and sit-ins aim to get a better offer out of Amazon. [Read more on The Guardian](https://www.theguardian.com/technology/2022/aug/09/gmb-calls-for-15-an-hour-minimum-pay-at-amazon-warehouses-in-uk) Amazon third-party sellers have received their first-ever holiday fee hike Amazon’s third-party marketplaces account for close to half of the company’s online sales. The company introduced a 5% fuel and inflation charge to its third-party sellers earlier this year, and has now implemented another inflation increase charge. Commencing 14 October, any seller who uses Amazon’s fulfilment service is subject to the price hike, which is set to be an additional 35 cents per item for products sold in the US and Canada. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/17/amazon-third-party-sellers-have-received-their-first-ever-holiday-fee-hike/) Amazon puts a pause on UK grocery shop roll-out as the cost of living increases Amazon has slowed down on its UK roll-out of till-free Amazon Fresh grocery stores following disappointing sales and the rise in cost of living. Allegedly, the company is no longer looking for potential sites to expand and if more stores are opened, they will likely no longer use a till-free system, as consumers become more cautious about spending. [Read more on The Telegraph](https://www.telegraph.co.uk/business/2022/08/21/amazon-pauses-uk-grocery-shop-roll-out-following-disappointing/) --- Other Marketplace News --- Shopee overtakes Alibaba across international markets Shopee has surpassed Alibaba and taken the top spot for sales outside of China. Singapore-based marketplace saw a year-on-year increase of 51.4% at the end of Q2 of this year, while Alibaba saw a 3% drop during the same time period. This can be seen as a promising development for start-ups and their ability to compete with some of the largest ecommerce giants in the market. [Read more on Exchange Wire](https://www.exchangewire.com/blog/2022/08/18/shopee-surpasses-alibaba-in-international-sales-amazon-searches-for-entertainment-exec/) H&M reopens its official store to Alibaba’s Tmall ecommerce platform It has been nearly 18 months since Alibaba removed H&M from its Tmall platform, following H&M’s criticism of human rights abuses in Xinjiang. It is estimated that over a million people, predominantly minorities in the area, have been unlawfully detained in camps across the city. Brands including Nike, Adidas, Burberry and Converse were swept up in the controversy, however H&M was one of the first to be targeted for speaking out about the issue. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/16/hm-returns-to-alibabas-tmall-platform-16-months-after-xinjiang-controversy/) Klarna launches new feature allowing UK consumers to view full online order history Buy-now-pay-later company, Klarna, has launched a new feature on its shopping app, which allows UK consumers to view their full online order history, regardless of whether they purchased the product using Klarna. The feature also shows delivery tracking and aids consumers in managing their online purchases more conveniently. [Read more on The Industry](https://www.theindustry.fashion/klarna-launches-new-feature-allowing-uk-consumers-to-view-full-online-order-history/) --- Other Ecommerce News --- Online marketplaces responsible for £280 billion business turnover in the UK Nearly 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales each year. This figure represents 6% of the UK’s annual business turnover, highlighting the notable contribution that marketplaces make to the UK economy, along with the potential for further growth in this area. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/09/online-marketplaces-responsible-for-280-billion-business-turnover-in-uk/)