Blog Post - Shalina Ganatra, May 29 2019

Why Data is such a big benefit for brands in a DTC model

Why Data is such a big benefit for brands in a DTC model

Direct to Consumer (D2C or DTC) selling is a relatively new business model for established brands and it's a sales route that big brand manufacturers are taking cautiously for many reasons, one of which is fear of unsettling their existing distribution partner relationships.

The FMCG category in particular has traditionally taken a “product-centric” approach to its business – if FMCG organisations make a good product, distribute to retailers and create demand by informing consumers of their product, they will build a successful business. Whilst this may have held true in the past, the growth of digital has notably led to:

  • easier discovery of new brands for consumers
  • more sources of product information and recommendations
  • a greater choice of where to buy from

Brands now need to adopt a “consumer-centric” mindset, and one way of doing this is through the use of consumer data to drive decisions.

Wunderman Thompson Commerce work with a number of well-known FMCG companies and are often startled to discover how little data brands get from retailers. Retailers are reluctant to share the invaluable data they collect on consumers. This data is so precious that some retailers monetise this – for example Dunnhumby for Tesco in the UK. Acquiring their own data will liberate brands from depending on retailers for information on their shopper behaviours and purchasing activity.

Brands also undertake enough primary research into consumer behaviour within their category, especially around how shoppers use different channels for various parts of their journey. This means brands lack a clear understanding of how digital channels can be leveraged to address buyers triggers and barriers.

In her former role as Heineken’s Global Digital Marketing Director, Ghislaine Prins-Evers, spoke at the IGD Digital conference late last year*, and said “For Heineken to be successful in ecommerce, we truly need to understand the omnichannel interactions”.

“I do not think we understand our shoppers well enough to succeed. We need to convince e-retailers to start sharing data. In this changing world and with this changing shopper, we need to understand, and you cannot understand based on intuition; that’s the whole dynamic of this channel.”

A DTC-enabled website allows brands to collect insight across the online customer journey, and here are some of key things that can be captured on an ecommerce site:

  1. Onsite behavioural analytics data. Using free tools such as Google Analytics enables brands to track visitor behaviour, through each step of the purchase funnel. For example, it is possible to track page views so site owners can see which products got a lot of visitors but may not have converted into sales.
  2. Onsite search. One particularly interesting measure is “Onsite Search” which captures the search terms that visitors have entered into the search bar. Brands can use this information to see what consumers are interested in (for example, products or information not easily discoverable or available on the site).
  3. Customer Ratings & Reviews. Ratings and Reviews is a core part of most ecommerce sites - this is definitely something that brands should feature on their DTC site. Reviews are a valuable source of insight to establish what consumers think about products and what information is important to them when making a purchase decision.
  4. Purchasing trends. A DTC site would track order information – for example, the highest selling products, what products typically people buy together etc.
  5. Primary Customer Contact Data. DTC is an important route to acquire customer contact information i.e. actual customer data which brands can use to build a CRM database to for loyalty marketing activity.
  6. Customer service enquiries. Even customer service queries can provide insight on which aspects of the overall proposition to improve.

Brands are using data attained from their DTC sites to inform their NPD (new product development) pipeline and enhancing onsite content and experience to grow engagement and conversion. More mature brands are even personalising the website and incorporating insights into digital marketing activities.

Our guidance for brands who want to maximise the benefits of DTC is to:

  • Define a clear data strategy and plan – what do you want to know and why, and how are you going to use insight to drive action?
  • Identify where ownership of data lies – who will analyse it and who is responsible for driving action from the insight provided by the analysis?

Here at Wunderman Thompson Commerce our Digital Intelligence team specialise in providing data strategies for brands and retailers, and our Business Consultants work with brands to provide ecommerce strategies, operating models and organisation design. We have hands-on experience of creating and managing DTC businesses and can help your organisation win in ecommerce. Get in touch to find out more about how we can help you.

In the meantime, reserve your copy of the brand new Future Shopper 2019 report to find out what today’s consumers want from brands and retailers in the future.

Reserve your copy of The Future Shopper 2019

*Source: https://www.marketingweek.com/2018/10/17/heineken-dont-understand-shoppers-well-enough-to-succeed-online/