How performance-based D2C marketing is powering brands to COVID era

Neha Kulwal, Country Manager, Admitad India, and a well-known woman entrepreneur, writes about the growing popularity of the direct-to-consumer (D2C) business model and how marketers can best unlock its potential.

Every business needs customers and vice versa - and the nature of this relationship is determined by various business models. Intermediary-based approaches such as B2C, which depend on retailers and distributors to connect brands with their target audience, have conventionally dominated the business ecosystem. Alternative models such as D2C have also gained popularity in recent times, thanks to the growing wave of digitisation.

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Typically, brands would choose the right mix of different business and marketing strategies to achieve their goals. However, the novel coronavirus outbreak currently sweeping across the world is making them reprioritise their objectives. The pandemic has restricted people’s access to physical spaces. With offline business opportunities severely restricted, for the time being, brands are turning to a more direct digital route to sustain business as usual.

The need and benefits of going the D2C way

The direct-to-consumer (D2C) business model, as the name indicates, carves a direct relationship between manufacturers and consumers by removing the middleman. This method differs from the traditional B2C model, as D2C brands sell directly to consumers and have more control over their customer experience and communication.

Before discussing the benefits of performance-based D2C marketing, let us first go over some of the most prominent challenges brands face in the wake of the viral outbreak:

• Customers are hesitant to visit local shops, as they fear accidentally contracting COVID-19
• Lockdown-induced isolation is impacting brand-consumer interactions, especially for B2C brands that depend on intermediaries to maintain these relationships.
• Brandsrisk losing out on the connection they already have with their customers. Recapturing it will take a significant reinvestment in terms of time and effort

This is where the D2C model enters the picture.

Millennials and post-millennials - one of the largest, most dominant, and fastest-growing consumer demographics today - make more than half of their purchases online. This behaviour has become even more widespread in the wake of the pandemic, making a digital-first D2C approach the best bet for brands looking to offer the most streamlined, convenient, and straightforward shopping solution.

Direct-to-consumer marketing allows suppliers to provide a personalized, end-to-end brand experience because they retain control over the entire process from production to distribution. They also have more flexibility in terms of product innovation; they can quickly gauge changing consumer sensibilities to test and deploy new products, services, or features to stay ahead of the market.

This direct interaction with consumers also means that brands now have access to enormous volumes of data about the preferences, buying patterns, and the demand cycle of their consumers. To maximize their profits, all that brands need to do is to translate this goldmine of data into actionable insights. Doing so can not only optimise their marketing strategies but also drive superior outcomes as far as customer outreach initiatives are concerned.

This is exactly why D2C brands are increasingly turning towards performance-oriented channels to expand their business and thrive in the post-pandemic economy.

Affiliate marketing: The key to unlocking the best of D2C

Most brands want to have a performance-led marketing strategy that can drive transactions and focus on delivering high ROI. However, the involvement of intermediaries often does not allow advertisers to achieve these goals. For instance, when selling via a third-partye-commerce store, brands may not receive access to any of the in-depth data - such as website heatmap, average session duration, etc. - required to enhance operational efficacy.

On the other hand, if all marketing and sales activities are under the producer’s control, they haveseveral opportunities to optimise their operations. Performance-based affiliate marketing serves to empower the manufacturer to act upon these opportunities to yield optimum dividends. Affiliate marketing aggregates various types of inventory and traffic sources under a single umbrella. This provides a one-stop-solution to brands to drive superior as well as diversified customer acquisition, without having to worry about how to manage too many partner relationships.

Further, relatively newer brands can leverage this pocket-friendly and ROI-driven channel to take their products directly to their customer base. Innovative tools offered by affiliate marketing channels help brands generate a heatmap to observe customer behaviour on their social media and/or website. This, in turn,helps them identify what factors are working in their favour and which areas of improvement require their urgent attention.

D2C brands will continue to smartlyleverage digital resources for the foreseeable future – andaffiliate marketing will continue to add a superlative touch to the advantages it offers.This will help brands in turning what’s good about them into the best that it can become.