Last week, our Managing Director, Scott Robertson, along with a representative from BizStream and a representative from the Michigan Economic Development Corporation (MEDC), held a webinar panel to discuss how manufacturers can utilize Direct to Consumer (D2C) sales channels.
Along with Scott, Brian McKeiver, Co-Owner of BizStream, and Alyssa Tracey, Director of International Trade at MEDC, weighed in on a series of questions meant to assist manufacturers and retailers that are looking to reach a broader audience, and utilize or leverage the ecommerce space and its multiple platform options.
Moderated by Jennifer Wangler, the Senior Business Development Manager at The Right Place, the webinar addresses a series of questions surrounding the advantages and strategic opportunities that D2C sales channels offer. Below, we’ll cover a series of those questions, and the approaches both Scott and Brian find in utilizing these D2C strategies for current clients, and how it applies to manufacturers. On this topic, Alyssa weighed in on the opportunities for these businesses to utilize grant possibilities with MEDC to get your products and services in front of an international audience.
How This Pandemic is Providing an Opportunity for Manufacturers to Shift from B2C to D2C
When determining whether or not you should shift sales channels for your business, it’s vital to know not only what it would require from your team and the commerce platform, but also timing. In recent months, the COVID-19 pandemic has provided a world of opportunities for manufacturers and retailers to take their business online and reach a broader audience. Ecommerce trends are up now that more consumers are purchasing online, rather than in-person shopping or via other distribution methods such as dealer channels. While these channels are still important, many manufacturers and retailers have been greatly impacted by stay-at-home orders that limit these buying channels. Below are some examples and advice from Brian and Scott on how the pandemic has provided more opportunities for manufacturers to shift to D2C.
Brian explained an experience with a client that manufacturers textbooks for schools all over the U.S. Historically, they sold these educational books through school district buyers and teachers, though there were some online sales. With the current pandemic, schools closed their doors early, teachers were “voluntold” to conduct their courses via video calls using online resources, and tangible textbooks were no longer the main resource of education.
“Homework became digital very quickly… the conversation quickly changed from school district buyers to individual teachers. This client needed a solution, fast,” said Brian.
BizStream helped them digitize the lessons from the classroom to ebooks and online PDF resources, and provided them to teachers for free for a limited timeframe. This D2C sales shift opened new avenues for the future and expanded buying options for teachers in need of these educational resources.
“It was a great example of shifting from using a set of goods in a new way,” said Brian.
Scott has seen the pandemic open up the market in unusual ways for manufacturers and retailers. One of CQL’s lighting manufacturing clients saw a 40% increase in sales by expanding their online presence. “Since more people are staying home, home improvement and DIY projects are underway for many households. This provides a unique opportunity for those in the home appliance and manufacturing fields to strategize and double down on ecommerce efforts,” said Scott.
Also, with Amazon focusing attention on the delivery of PPE products, manufacturers and retailers are seeing reduced competition and therefore enjoying more direct interactions with end consumers. Finally, more of these manufacturing companies and retailers are investing in SEO, digital marketing, and design opening the door for small- to midsize businesses to advertise and increase their organic search.
The Internal Systems Necessary to Support a D2C Sales Shift
With the need and timing right, it next comes down to how you’re going to make the change. What systems are necessary to accommodate this D2C shift?
For both Brian and Scott, it mainly comes down to these three things:
- Knowing the Order Lifecycle
- Having the Staff
- Weighing the Right Payment Options
Knowing the Order Lifecycle
In order to accommodate the right systems to perform a D2C shift, it’s important to understand the steps your business takes internally to process that order, and what happens thereafter. This is called the “order lifecycle.”
Both Scott and Brian expressed the importance of knowing your business’s order process, from the handling of product support to shipping, tracking, returns, and warranty claims. As you shift from a B2C model to a D2C approach, the work changes from something as simple as printing brochures to selling products contained in that brochure to an online storefront. This means knowing how those products are seen (product images, descriptions, and features), and who is handling order inquiries. This brings us to the importance of having available staff to support the order lifecycle.
Having the Staff
By bringing your business online, you’re expanding your consumer base. When you broaden your audience, you need the internal support to accommodate the potential of more orders being processed. Staff will need to handle orders, payments, billing increases, and of course, customer support.
According to Scott, there are options when it comes to expanding your staff. After all, you want the right staff, not just anyone.
“Most businesses start small, so to accommodate the growth, they outsource staff to handle the volume of orders in the interim,” said Scott. “Third-party platform solutions offer customer support, as well as product support. In addition, you can take the opportunity to expand your staff by hiring directly in-house. There are many recruiting resources available to hire people with experience in ecommerce.”
Weighing the Right Payment Options
Now that your business has defined its order lifecycle and you have the staff to manage these orders, it’s important to have the right technologies to process payment. Both Scott and Brian offered opinions for weighing payment options.
According to Brian, some businesses have trouble in the beginning with merchant gateways and payment accounts. These are key to think through because they don’t always come with most ecommerce packages. He suggests you think internally of this first. Work with your bank or third-party providers to get this locked down. if you talk to your bank, they typically give you a better break on the per-transaction fees.
Scott provided another perspective adding that technologies over the past five years have come so far for online payment options alone. There are payment integrations and gateways like PayPal, Apple Pay, Google Pay, and more that can easily connect with your ecommerce platform. Finding the right payment gateway for your sales funnel can come down to a couple of things like fees and volume of sales. You can balance these fees by generating more sales, something to consider when deciding on using a payment gateway.
Third-Party Systems and Tools Available for Manufacturers
When considering the shift to ecommerce, it’s helpful to know there are tools out there to help assist and align with your business goals.
“It’s shocking how much is out there,” said Brian. “There are search engine optimization (SEO) tools, graphic tools, and marketing stacks with ecommerce platforms. You don’t need 5 million dollars to make this happen. There are many platforms that make this easy.”
Brian also expressed that you absolutely need an enterprise resource planning (ERP) system and you can add some out-of-the-box platform tools that don’t take that much customization. Briand said to start simple and that there’s an ERP option for companies of all sizes. It’s better to buy and configure than build from the ground up.
The Risk and Investment When Shifting to D2C
When people ask, “is there a typical investment when shifting from B2C to D2C?”, Brian has a solid answer: “There’s no typical investment.” He heavily recommends starting small, first.
“When choosing an ecommerce platform at first, they may not be perfect or fit every need, but they are a great start to getting basics down,” said Scott. “One example of this is Shopify, an easy start-up solution for brands just starting an online commerce space.” From there, maybe step into a “commerce package”, like Workarea, which allows you to create and set up some customizations and options, including marketing toolsets with email communication to help improve conversion rates. Scott indicated that “these middle-tier platforms have commerce and digital marketing capabilities. For larger brands, a solution like Salesforce Commerce Cloud can allow for full customizations, integrations, cartridges, and more.” Additionally, platforms such as Magento provide still further alternatives for organizations. Scott added that “much of the early work in the planning process is identifying which alternative fits best with an organization’s strategic commerce intent.”
With each solution, comes a risk – mainly security. Brian says, “Having data security with the California Consumer Privacy Act (CCPA) and General Data Protection Regulation (GDPR) is mandated, so understanding what you’re doing with your customer’s data is super important. In an ecommerce context, what you do with this data and how you store it is huge. Ask any vendor or partner that comes to you should really be around security.”
Another thing that doesn’t come up often is accessibility. This is super-critical in 2020 since online accessibility factors will soon become law and force domains to meet certain guidelines. These work for disabled and multilingual users.
Getting Help for Your New Ecommerce Business with The MEDC
Speaking of accessibility, if you need help getting your products and services in front of international audiences, the Michigan Economic Development Corporation (MEDC) offers methods to help you achieve those goals.
They cover 92 global markets and offer multi-market research, export readiness support, and international trade services. Additionally, MEDC offers grants for brands looking to build a smaller website that is accessible to other countries and multilingual marketing campaigns. For additional information on how the MEDC can help your business expand to global markets, visit their website here.
CQL and BizStream: An Ecommerce Resource for Manufacturers
As manufacturers look to shift from traditional B2C channels to D2C, there are many resources available to assist in this transition. Both BizStream and CQL are viable resources to assist with questions, examples, and inquiries on service and platform interests. For more information on CQL’s ecommerce platform partners, D2C solutions, and custom options, contact us today.