Direct To Consumer Model: How to Differentiate with Data

Direct To Consumer Model: How to Differentiate with Data - direct to consumer model - Kinspeed Limited

Wholesale distribution has dramatically shifted. The direct to consumer model – DTC – presents an opportunity for distributors to cut out the middleman and sell directly to consumers. Today’s buyers are willing to purchase direct from a wholesalers’ website, rather than an established retailer where the selling price might be higher.

With the direct to consumer model, supply chains shorten, bringing distributors closer to their customers. The foundation of a successful D2C strategy is developing a direct feedback loop with customers. Gathering data and using it to differentiate, reduce time-to-market, and deliver the products customers want.

Selling Direct to Consumer

One of the greatest benefits of selling direct to consumer, is data. Distributors gain a deep understanding of customers and prospects using data gathered at touchpoints throughout the customer journey. Forward-thinking businesses use data to fine-tune their value proposition.

Customer experience is enhanced when data is interpreted. Product and service offerings are delivered with laser accuracy. Wholesale distributors are well-placed to unlock commercial opportunities through data. Customer retention improves significantly when a supplier has the right product, delivered at exactly the right time, using the optimum method. 

Before shifting to a direct to consumer model, companies need the technology and processes in place to collect and analyse data. Look at your data before you leap.

Audit, Pivot, and Advance

Hard facts are where successful decision making lies. It is only through understanding of actual demand and performance that a business can differentiate. Data collection and analytics capabilities are essential to increasing customer pull.

What do customers and prospects really want? Product data will reveal a thousand secrets. From uncovering values held by different markets – what sells where – and which markets will yield the greatest profits, data is the secret sauce for a scaling business. Emerging trends and evolving customer requirements can be identified, often before prospects themselves realise their needs have shifted.

With relatively low financial outlay, wholesale distributors can use connected devices in operations. Devices which operate in real-time, collecting and storing data throughout the order fulfilment process. A connected device is integrated to the central business management system, wholesale distribution ERP software, for instance.

Using data to differentiate, to offer value-added services customers will return for time and again, requires a modern approach to an age-old problem.

Reimagining Inventory Management

Real-time inventory management is nothing new, and the direct to consumer model takes connectivity further. Not only is inventory management connected to multiple sales channels, but it is also augmented by customer data. This level of clarity is helping wholesale distributors shake off the shackles of, ‘this is how we’ve always done it’, and define a new era of supply chain visibility.

Tracking goods through the order fulfilment process, from stock allocation and order acknowledgement to order picking and delivery, provides full supply chain visibility. Combine this with customer data to deliver an enhanced service that raises the bar in wholesale distribution.

For less customer-centric decision makers, the direct to consumer model is a profitable one. Not only are wholesalers cutting out the middleman, but they are also taking control over the supply chain. The visibility afforded by data is transforming relationships.

Digitisation is the Only Way

The wholesale distribution sector has always had to worker harder than most to optimise tight margins. Robust relationships go a long way to support this. Visibility into historic demand, inventory, expiration dates, and location, for instance, support both healthy customer and supplier relationships. Historic data reveals accurate patterns of sales and can be used to predict inventory demands precisely. Not only does availability for customers improve, but relationships with suppliers are strengthened. A wholesaler who can confidently make commitments to suppliers is likely to suffer from less shortages and delays.

To sustainably pivot to a direct to consumer model, a business must digitise its services and processes. Take a wholesale food distribution company as an example. Products must be available to order online 24/7 modern buyers prefer a self-service experience, and no delay in order processing. Digitisation means an order placed at 5pm, allocating stock in real-time, is picked and packed within an hour, and in transit to the customer within hours of the order being placed.

Transparency doesn’t just apply to the supply chain. It applies to every facet of a business. Connected means ridding a business of siloed legacy systems. Instead, data is collated from the full length and breadth of operations, in real-time.

“Connectivity remains the number one concern that wholesalers need to unravel because without it you lose the opportunity for sales. Connectivity demands clarity across all touchpoints.” Nicole Reyhle, founder of RetailMinded.com.

Wholesale distribution operations have a lot of moving parts. The fulfilment process must be a fast and seamless one. Error-prone and time-consuming processes are eradicated with digitisation. Automation ensures that critical processes continue 24/7, 365 days a year. That doesn’t make a workforce redundant, it gives the gift of time to analyse and advance.

Ditching the Retail Business Model

Wholesale distributors can successfully pivot to a more profitable direct to consumer model by leveraging the benefits of technology. Upgrading the business management system to a connected solution, such as NetSuite or Sage ERP, and investing in hand-held scanners, is a seamless way to achieve digital transformation.

Businesses adopting the direct to consumer business model can see the big picture. Making optimum use of data to create an ever-sharper picture of customers and prospects. The insights gained from data analysis can fine-tune and differentiate a brand selling direct to consumers.

Every business must find their own way to achieving digitisation. Every business is unique. It takes a tailored approach to implement the optimum solution.

It’s one thing to collate data, it’s another to extract genuinely useful insights. Aligning data and analytics dashboards with objectives and key metrics is how a business successfully differentiates, reduces time-to-market, and delivers the products prospects want.

Harnessing the power of data relies on having the best tool for the job. A business management solution that can be quickly implemented and achieve rapid user acceptance. A solution which removes complexity and supports confident decision making.

Software for wholesale distribution is a complete solution to digitise the full scope of business operations. Unify operations with a perfect-fit management solution, tailored to the individual business and its customers.

When a business must capitalise on every opportunity, it needs the best tool for the job.

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