Brands that once relied on retailer stores to sell products are driving growth by engaging with customers directly. In Blue Acorn iCi’s recent webinar with Forrester and Adobe, experts shared their insights into how B2B wholesalers can embrace direct-to-consumer (DTC) and create consumer-friendly experiences for both B2B and DTC audiences. Read the recap plus questions & answers from the audience below or watch the recording.
Why B2B Wholesalers are Investing in DTC
According to Forrester, 45% of online adults want to buy directly from a brand, but why now? When the pandemic hit, Amazon had massive stock shortages, leaving an estimated 25% of Amazon Prime members frustrated with their experience. With retailers closing physical stores, consumers turned directly to brands to fulfill their needs. As a result, B2B companies are investing in digital DTC channels to align with changing consumer behaviors.
PepsiCo recently launched two DTC sites, PantryShop.com and Snacks.com. Pantry Shop simplifies choices by selling bundled products. Snacks allows customers to choose one item at a time but requires a $15 minimum. In both cases, PepsiCo owns the customer data, learns more from trends, controls the brand experience, and reduces reliance on retailers. Most importantly, they avoid the incremental cost of selling one item at a time from a physical shelf.
Combining B2B and B2C Selling
From a technical perspective, many B2B companies are adding commerce functionality to their existing content sites. For example, a company may use Adobe Experience Manager to present the experiences and Magento Commerce for the cart and checkout process. A flexible digital experience platform architecture like that allows brands to leverage their existing B2B system and integrate commerce capabilities for DTC across the entire customer lifecycle.
Activating Digital with Drop Shipping
Drop shipping is any scenario in which a merchant sells physical products to a customer and outsources the fulfillment to a supplier. 65% of retail and brand professionals say they already have implemented drop shipping via endless aisle in 2019 or planned to in 2020. For brands, drop shipping can:
- Open additional sales channels
- Help sell off excess inventory
- Generate brand awareness
- Create opportunities to test
Optimizing the Complete Customer Experience for DTC
DTC is a fundamental shift for B2B companies. It requires reinventing the funnel to accommodate selling products to people versus shipping pallets to retail stores. Successful DTC channels focus on the complete customer experience, from relevant content and memorable packaging to customer service and personalized marketing.
To make their DTC vision become a reality, Pelican partnered with Blue Acorn iCi. Pelican historically sold the majority of their protective cases through distributors, but they had a limited DTC channel. Blue Acorn iCi implemented a headless solution by integrating Magento Commerce. As a result, Pelican quickly saw a 108% increase in sales, a 98% increase in transactions, and a 76% increase in conversion rate.
Blue Acorn iCi can help you build or optimize your DTC channel. Contact us to get started.
Digitizing Relationships with Wholesalers
Optimized DTC channels not only allow B2B companies to engage with the end consumer, but it also strengthens the relationships with their B2B customers. Brands like RXBAR are digitizing their wholesale channels to distinguish themselves from the competition. With a digitized wholesale channel, B2B brands can offer features such as personalized pricing, order status, user permissions, credit lines, or early access to new products. This also allows brands to collect B2B buyer habits, track trends, and respond to product performance.
Questions From the Audience
What’s the biggest challenge B2B brands face when going DTC for the first time?
“It’s less on the technology side and more on the change management side,” said Chris Guerra, Co-CEO at Blue Acorn iCi. He recommends focusing on preparing your organization before, during, and after the launch of your DTC channel, especially the Sales Organization. By including the Sales Organization in creating the DTC strategy, they will see the channel less as a competitor and more as a tool to grow customer relationships.
Are there certain industries where B2B buyers won’t complete a purchase online?
It’s less about the industry and more about the product. You likely wouldn’t buy a bulldozer from an ecommerce site, but you may buy parts for the bulldozer online. Products that are largely unplanned, such as parts for repairs, are ideal for B2B ecommerce.
How much should brands worry about channel conflict?
Historically, retailers ran the show so there was this worry that brands would undercut their retail partners by cutting out the middleman. This is no longer the case. More and more brands are launching a DTC channel, but they still leverage their retail relationships. As long as everyone follows the MSRP, channel conflict isn’t an issue.
How do you expand globally with a hybrid business model?
Global expansion is a natural next step for a B2B firm that has existing customers internationally. Rather than focusing on expansion, it’s about digitizing each of the regional marketplaces. Ideally, each regional marketplace has local language, pricing, and content. From a B2C perspective, some of the operational challenges include cross-border shipments, compliance, and taxes.
How can small and medium businesses use DTC to generate brand awareness?
It’s key to understand the difference between product marketing and brand marketing. Platforms like LinkedIn for B2B or Instagram for B2C are great for targeting specific individuals and building awareness. It’s tempting to only invest in product marketing where you see an immediate return, but having a strong digital presence will reinforce sales across all channels.
What’s the difference between drop shipping and expanded assortment?
With drop shipping, the retailer doesn’t own the products, so they don’t pay overhead costs to store and ship products. Extended assortment is typically made up of specialty items the retailer owns but doesn’t want to put on physical shelves. This opens an opportunity for retailers to expand their offerings through a digital channel.
Do B2B buyers value personalization?
Yes, but it’s important to remember that these buyers are tradespeople. Buyers want brands to show how they empathize with their day-to-day professional lives in their specific industry.
What will customer experience look like post-COVID-19?
- There will be a resurgence in brick and mortar retailers as more people want to get out of their homes and receive a one-on-one experience in a store.
- We’ll see store associates interacting with customers via video conferencing.
- B2B will continue to invest in digital DTC channels
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