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Orderhouse Blog

3 Signs You May Not be Ready for DTC

Around eight out of ten online stores fail within the first 24 months of going live.” (B2C)

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Does that statistic surprise you? After all, hasn’t every other retail news story in the past several years touted the virtues of online selling? From Gillette’s Dollar Shave Club to Procter & Gamble’s Tide Wash Club, selling direct via an eCommerce site is a trend that’s simply too hot to ignore.

But just because everybody’s jumping on the DTC bandwagon, does that mean your business should, too? Not necessarily. Let’s pause for a moment to look at three clear signs you may not be ready to institute an eCommerce strategy.

1. You lack (or aren’t spending) the financial resources needed to fund a successful eCommerce site

Hosting an eCommerce site where your customers will want to browse and shop isn’t as simple as adding a shopping cart to an existing website. It requires careful planning, thoughtful design and, yes, a modicum of cash to build out. Yet many traditional retailers and manufacturers think they can cut corners online. “Even relatively small retailers will happily invest $50,000 or $100,000 into a physical store, but decline to spend $5,000 for an online one which may actually have greater sales potential,” writes Armando Roggio of Practical eCommerce.

Perhaps you think that because you’re selling online, the outside investment is small relative to opening a brick-and-mortar location. It’s true that the traditional overhead is low. However, if you want a site where your customers will repeatedly shop, you need to make every online sale as seamless as possible. If you don’t invest up front in ensuring a positive user experience on your eCommerce site, you’re not setting yourself up for success or repeat business.

Consider some of the must-haves for a good online shopping experience:

  • Products are well-photographed with accurate descriptions
  • Site is easily searchable
  • Calls to action are clear and easy to follow
  • Loading time is quick
  • Minimal clicks are required to complete a transaction
  • Website is built to look good on multiple platforms, including mobile
  • Customers can feel confident that their personal information is safe and secure

These are just the basics. You also have to research what your competitors are doing with their eCommerce sites and determine what you can do on your site to keep customers from straying.

2. You don’t have a digital marketing strategy—or someone on your team to create one

Once you’ve built a solid, user-friendly eCommerce site, you need to reach out to customers to help them find you. This requires a digital marketing strategy. If you are used to traditional retail selling—investing in endcaps, table displays, co-op advertising, and the like, you’ll need to hire someone who understands areas like SEO optimization, email marketing, social bookmarking, and more to be your trusted guide.

A successful DTC marketing budget doesn’t have to be on par with a Unilever or P&G spend—but it needs to be well planned out. A digital marketing budget can include inexpensive ways to help drive traffic to your site, like social media campaigns or an enticing email promotion.

Attracting more customers and delivering a satisfying user experience also promotes positive word-of-mouth and testimonials that, when spread, can cause a ripple effect. People like to tell their friends on social media about a positive shopping experience or interaction with a brand, so make sure you’re prepared to reward that nod with a discount coupon, free sample or other token of appreciation. Of course the reverse is also true. Dissatisfied customers will share their experience online, too, and you need to have a plan and the resources to address those complaints fairly and in a reasonable timeframe.

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3. You lack the bandwidth and infrastructure to handle direct sales

Perhaps you’ve already allocated adequate resources to your eCommerce site and marketing budget. But what happens once those direct orders start rolling in? So far you’ve been relying on your distribution partners to handle logistics and your retail partners to deal with most or all of your customer service. But when you sell direct, suddenly you bear the responsibility of ensuring a positive transaction from start to finish. This includes:

  • Making sure the right products are in stock, shipped on time and arrive in a condition that satisfies the customer.
  • Competitively pricing your products and shipping costs.
  • Offering customer service support to handle questions, complaints and other issues.

If you don’t have a long-term strategy for how you will handle your inventory management, cash flow, shipping/receiving and customer service for your DTC website, your plane isn’t ready to leave the gate.

Don’t have what it takes to be a successful DTC seller? Get help

Just because you are planning to sell direct, doesn’t mean you need to go it alone. A quick cost-benefit analysis of implementing an eCommerce strategy will show the potential financial gains that are possible in time. Not to mention the increased brand awareness and closer customer relationships you’ll enjoy. Nothing good comes cheap; adding a DTC channel will require some investment: in resources, new ideas and talent (whether in-house or outsourced) who can help you grow your online business for the long term.

eCommerce is here to stay—will your DTC channel be robust enough to go the distance? That’s up to you.

Topics: ecommerce E-commerce DTC digital marketing strategy