This is an excerpt from Ryder E-commerce’s latest ebook “Unleashing the power of creative channel expansion for D2C brands.” Check out the full ebook here.
Until recently, the direct to consumer e-commerce model represented the gold standard for how to engage consumers and build loyalty. But as acquisition costs climb and mature D2C brands struggle to reach profitability, it’s clear that merchants need to think beyond the primary shopping journey to achieve sustainable growth.
As online channels continue to proliferate, it’s become less likely that an e-commerce website is a customer’s first touchpoint with a brand. Wholesale partnerships, loyalty programs, resale platforms, and more offer robust discovery opportunities to consumers. Yet finding the optimum mix of channels is an ongoing challenge for merchants.
According to a 2023 survey of retail CEOs, founders, and C-suite executives, almost half (47%) feel there are too many channels available to deliver a good customer experience, while 49% struggle to evaluate how successful their omnichannel strategy is.
‘Too many channels, too little time’ might as well be the calling card for contemporary retail. If brands fall into the trap of investing in too many channels – but not the technological infrastructure to manage them – there’s a high risk of the customer experience becoming fragmented and difficult for shoppers to navigate.
To manage creative channel expansion effectively, brands must balance both operational and marketing demands to find the right channel mix that serves customers while optimizing for cost.
A channel doesn’t have to be transaction-focused to provide value. An initiative that provides brands with more opportunities to connect with potential and existing customers should be considered as an additional channel for consumers to support your brand.
By framing these engagement opportunities as channels, e-commerce brands can ensure that these efforts complement each other and provide customers with a cohesive brand experience.
Today, multichannel retailing encompasses far more than the e-commerce-retail- wholesale trifecta. Creative channel expansion requires brands to look outside of siloed sales workflows and fulfillment strategies. This means finding fresh ways to nurture consumers toward purchasing – and having the necessary infrastructure to support them.
As the e-commerce playing field levels out, it’s becoming apparent that digitally-native brands are no longer leading the charge. In 2022, established retail brands accounted for 75% of total direct to consumer sales in the U.S., a clear sign that an acquisition-driven approach is not reaping rewards.
The steady growth of additional channels, such as localized retail and secondary markets for returned or last season merchandise, has highlighted the importance of curating experiences for different audience segments. If customers feel that a brand genuinely understands their needs, the pathway to securing higher levels of customer loyalty is clear.
But brands need the right operational architecture to support building out these channels. As the pendulum swings from seamless shopping experiences to meaningful brand interactions, it’s no longer enough for merchants to remove points of friction; they need to actively build relevant touchpoints that foster emotional connections with shoppers.
For this to happen, customers must feel supported not only in the channel they begin their journey in, but within any subsequent channel they move to. This demands a true omnichannel approach that unifies data across channels to provide personalized, relevant brand experiences. With the right systems in place, creative channel expansion will inspire anticipation rather than panic for fresh engagement strategies.
As e-commerce growth tapers off from the heights seen during the COVID-19 pandemic, digitally-native brands are faced with the question of where to go from here. Merchants have numerous avenues at their disposal to bring their brands to market. But which channels are worth the investment?
Choosing the right creative channels to market and sell your products is no longer a question of who is in control of what. Just 10% of U.S. consumers start their product discovery journey using a brand’s website. While managing channels directly has its advantages, it’s more important that a channel is capable of reaching its intended audience.
The pivot currently underway towards wholesale selling is a clear sign that the limits of the ‘go it alone’ approach are being felt. There is significant power in brands moving past the idea of ‘owned’ channels and working to maximize convenience and discovery opportunities for consumers. Rather than diluting the brand experience, expanding beyond D2C enables merchants to bolster their brand ecosystem and build more touchpoints with potential customers.
At the same time, it’s vital that brands continue to leverage the strengths of direct-to-consumer retail. The ability to connect with consumers directly to deliver personalized experiences, ask for feedback, and invest in loyalty initiatives is more valuable than ever as growing digital competition makes it harder to stand out from the crowd.
Research from Glossy and Modern Retail demonstrates how D2C brands are reckoning with a retail landscape influenced by growing saturation and shrinking investment. Their 2022 survey of D2C brands found that 80% of respondents expect wholesale activity to grow, while just 62% are confident in direct retail revenue increasing.
It’s clear that D2C e-commerce brands need to adapt or face becoming irrelevant as customers choose to interact with brands beyond the digital storefront. In an increasingly multi-channel retail environment, every additional channel represents new opportunities to connect with customers and build brand equity.
The path to creative channel expansion will not always be intuitive or easy for merchants. Maintaining the right infrastructure to manage your channels is a key investment to ensure your business can construct a full brand ecosystem of engagement efforts that complement each other, rather than a patchwork of channels that lack visibility and coordination.
The evolution of brand interactions online means that e-commerce represents far more than just a single channel, paving the way for D2C brands to augment the digital experience. A streamlined combination of direct sales, wholesale, and resale initiatives presents shoppers with an abundance of ways to interact with brands, while investing in post-purchase channels such as email and SMS helps to shorten the path to the next purchase.
Monitoring the success of your existing channels and speaking to customers is an important first step to help you understand where gaps exist in the brand experience and which creative channels can play a role in filling them. As consumer shopping habits continue to shift, staying in the loop with how consumers want to engage with brands online is key to staying relevant and maintaining your competitive edge.
By viewing creative channel expansion as an opportunity for more robust customer interaction, rather than just a way to boost short-term sales, brands can build more sustainable sources of revenue and foster increased trust in their customers.
Want to learn more? Check out the rest of our ebook on how brands can effectively expand their selling channels and find more opportunities to creatively engage customers: