Over the past two years, the pandemic has dramatically reshaped the economic landscape. Business-to-business (B2B) companies in particular have been battered by widespread shutdowns, supply chain disruptions, and drastic shifts in consumer spending. Struggling to bolster sinking sales and profits, many have been forced out of their comfort zone into a whole new arena: e-commerce channels and marketplaces.
This move puts them in direct competition with the business-to-consumer (B2C) companies that have dominated the e-commerce environment for years. It’s no small challenge—especially now, when consumer expectations around digital experiences are higher than ever, and the direct-to-consumer (D2C) market is increasingly competitive.
The stakes are high, as more consumers are conducting significantly more business online than before the pandemic—not only younger generations but older consumers. In response, more companies are striving to engage these newer demographics of online consumers directly, with everything from tangible products such as cars to services such as insurance. Rather than selling cars only through dealerships, for example, automakers now give consumers the option to buy directly from them. Similarly, insurance companies that sold policies through middlemen are now marketing directly to consumers. Even the healthcare industry is undergoing a major transformation, with a new emphasis on the connected experience, making it easier for patients to access data and networks of providers.
To successfully execute a D2C model, you need to focus on three key areas: customer experience, data, and the digital experience platform technology stack.
A vast majority of C-level executives and marketing managers are acknowledging that personalized customer experience is essential to the modern marketing ecosystem. This means they must always gather customer insights and convert them into personalized contact moments and service offerings. Due to their business complexity, B2B companies are usually far from end customers, so they haven’t, historically, prioritized things like personalization. But we will start to see more and more of them choosing a different path. These forward-looking B2B companies will use digital channels and marketplaces to get directly in touch with their end consumers.
To make the transition to the D2C model, companies need to learn buyer preferences. Elements such as previous purchase patterns, customer locations, and preferences can help target audiences, tailor messages and offers, and communicate effectively. Customers are looking for consistency, contextual relevance, and alignment from the brands they interact with.
However, this remains a challenge for many organizations today, as they grapple with fragmented systems, legacy technology, and internal silos acting as roadblocks to effective sales and marketing strategies and campaigns and customer service methodology.
Customer data platforms (CDPs) can help to overcome these challenges. These are packaged software solutions that integrate with other systems to ingest customer data from previously disparate sources—including customer relationship systems, digital advertising, and social media channels. Using artificial intelligence and data analytics, CDPs then create a holistic, 360-degree view of customers and prospects.
The benefits of using a CDP range from an enhanced customer experience to increased customer conversions and retention as well as a higher return on ad-spend—not to mention all-around business benefits such as better operational efficiency and agility.
There are many CDP vendors in the market, and choosing the right one is essential both for a return on investment and to create the marketing experiences needed to remain competitive.
B2B companies that desire to move in a D2C direction must start planning and investing in technology, especially in commerce, to directly reach and serve their consumers in every shopping moment. To keep pace with dynamic and diverse changes in a fast-moving market, application leaders responsible for digital commerce should prepare for a “composable” approach: moving from monolith commerce suites to a commerce system that is composed of independent software components, each providing a particular business capability.
A digital experience platform with composable CX architecture will give companies the freedom to choose best-of-breed technologies to deliver the exact experience they want to create without being tied to a single vendor or technology stack. The pace of change in digital commerce is accelerating every year, with cutting-edge technology today becoming mainstream tomorrow. As opposed to a monolithic architecture that locks you into functionality offered by an all-in-one platform, a modular or composable approach allows you to build experiences like Lego blocks. By being able to swap out and add components as and when you need them or when better ones become available, you can build a platform that not only meets the needs of today but also is ready for the future.
As consumers expect new pandemic-era services to become the new normal, the ability to react in a way that’s fast, agile, and flexible will continue to increase. According to Gartner “by 2023, organizations that have adopted a composable approach will outpace competition by 80 percent in the speed of new feature implementation.”
Opening a D2C channel requires careful planning, a solid understanding of consumer needs, good data, and a commitment to creating engaging experiences. As the model continues to gain popularity and more business buyers expect automated, curated buying experiences, D2C can be an increasingly valuable investment for B2B brands.
Mahesh Gaitonde is chief digital officer at O3 World. Gaitonde brings more than 22 years of experience in management and technology consulting. He is passionate about delivering measurable business value to clients by unifying context-sensitive digital channel experiences through transformative solutions. In his free time he can be found playing and evangelizing the game of cricket or trying his hand at photography.
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