10 Things to Know - Growing Your Direct to Consumer Business. A Guide for Brands.

Brands continue to focus on growing their direct-to-consumer businesses, taking share from resellers and wholesale partners. As companies make this shift, several common issues arise. 

Below we’ve summarized ten things brands and manufacturers should remember as they scale their businesses.

Table of Contents Show


    1. Treat the web as your largest marketing vehicle and invest appropriately

    Brands & manufacturers often initially invest in digital based on the directly attributable revenue it drives, rather than taking its impact on total sales into consideration. One early conversation with a CEO we had was, “You need to stop thinking of this as a $70 Million website; it’s a website supporting a $2 Billion brand”

    Companies regularly fail to invest sufficiently in staff, technology, and marketing to support the brand. However, most shoppers begin their research process online regardless of where they ultimately convert. If you have your own stores, getting more shoppers in the door also helps boost your direct-to-consumer business.


    2. Balance long and short-term marketing investments to maximize profitability

    We are all conditioned to prefer instant gratification. However, failure to invest in various marketing channels will ultimately lead to a higher customer acquisition cost (CAC). 

    Brands regularly short-change investment in upper funnel marketing, lower cost acquisition channels like SEO, and retention tactics like triggered email. It’s not unusual for a brand to spend $100,000 on paid search and scoff at a $5,000 SEO retainer, yet on a cost-per-acquisition basis, organic search is a much healthier business proposition.

    Maximize your lowest funnel channels first, but ensure you are investing elsewhere to blend costs down and ensure longer-term health. Keep an eye on lifetime value (LTV) instead of just the first order, and invest appropriately.



    3. Manage inventory for the web directly, not as a percentage relative to other channels

    Brands and manufacturers often begin by fulfilling orders from a general pool of inventory and handle their inventory planning by just adding a percentage over total company sales.

    The website should be treated as the largest store, preferably with dedicated inventory, and planning should be done based on web sales data as consumer preferences & best-sellers often differ online.

    This is another area to watch out for instant gratification. A wholesale account may want to take all your inventory in a given product at a low margin, but that can leave you out of stock on the web.


    4. Take control of the grey market

    Wholesale accounts may be selling on Amazon or other marketplaces. These are legitimate products but are often sold at a discount. Customers will perceive these grey market items as the same quality as those sold on your site, so take control and ensure pricing follows your strategy - not the one your wholesalers are setting for you.

    I remember having a discussion with the head of a brand who proudly shared that they didn’t discount. I showed him screenshots of their products being sold by massive grey market resellers on ebay, amazon and even their own sites and telling him that customers were definitely buying their products at a discount - he just wasn’t getting the dollars.


    5. Evaluate marketing investment’s impact on all channels, not just your website

    Investing in digital will not only help lift your direct-to-consumer sales, but will also likely impact total brand sales. As marketing spend increases, keep an eye on sales through Amazon, stores, and other retailers - especially if you have a large footprint. 

    What may be marginally profitable, or even negative when reviewing directly attributable revenue may be very profitable if you factor in sales through other channels. For many brands, the web isn’t the only direct-to-consumer sales channel. Make sure to also factor in phone sales if they aren’t reflected in your analytics and digital marketing reporting - tools like Invoca and Callrail can help with attribution.


    6. Capture feedback early and often - reviews are not the same as NPS or perfect order

    Brands & manufacturers are generally good about gathering and keeping an eye on product-level ratings and reviews, but often fail to measure net promoter score (NPS).


    Capturing NPS and other KPIS such as Perfect Order, can help alert brands to issues with fulfillment, delivery, or customer care. Failure to delight customers on these parts of the purchase cycle can be brand damaging.

    My preference is to capture NPS and feedback from all website visitors, not just those who complete a purchase. This can alert you to website issues. At one company, we found that the site wasn’t loading for users who had a certain browser plugin. Solutions like Asknicely, Yotpo, Okendo, and Opinionlab (now Verint) can help.


    7. Pick a platform that allows you to focus on your core competencies

    It can be tempting to pick a platform that allows significant customization, but those often require development and IT support for even the smallest of changes. eCommerce platforms such as Shopify Plus allow marketing and merchandising teams to focus on selling rather than negotiating for a spot in the development queue.


    8. Support your wholesale network and retail stores

    Although your goal may be to increase sales through your website, it’s important to remember that shoppers should be able to make a purchase any way that they so choose. For brands with an extremely strong wholesale or retail presence, this may mean offering direct links to purchase the product on Target, Dick’s Sporting Goods, or in a store. 

    Although it’s less pronounced now, some brands still have policies that make it difficult for online shoppers to make returns or exchanges in stores. Review your policies to ensure that the customer comes first, and don’t make them jump through your internal hoops. You may also consider offering commissions to in-store reps that direct users to the web when a product is out of stock, or provide kiosks if appropriate.


    9. Evaluate key segments distinctly

    Web analytics and marketing solutions generally default to a set of blended metrics, but to grow your business, it’s important to segment data and evaluate purchase and web behavior differently.

    Examples include:

    • Older versus younger shoppers

    • Desktop versus mobile

    • New versus repeat customers

    • customers in your local area versus outside of it (or in your store markets versus outside of them)


    10. Test website changes with users, not just internal staff

    Usability testing is efficient and relatively inexpensive. Solutions such as Usertesting.com allow brands to have a birds-eye view and watch users navigate & hear their feedback. Avoid website blindness that occurs when only internal staff is responsible for site optimization. Keep an eye on metrics such as dollars per site visitor when you make changes, rather than just using conversion and AOV as separate KPIs.

    Antonella P.