This four-part series aims to help executives better understand how to succeed in digital transformation. In part one, we identified three critical pillars of success:
- The right strategy, culture and partner relationships.
- The adoption of sophisticated cloud marketing technologies and data.
- A direct-to-consumer brand digital commerce channel.
Here in part four, we’re focusing on the third pillar: brand digital commerce.
We’ve all heard the stories when it comes to digital commerce. Amazon is using your brand’s data, along with the customer reviews and insights they gather on their site, to determine which markets to enter and how to best promote those products. The life raft many companies rely on to sell their products online is now drowning them with its own private-label brands.
But what can you do about it?
That is the question most executives can’t answer.
Amazon is not your brand digital commerce channel
Completely cutting off Amazon isn’t advisable in today’s world, where the consumer path to purchase is increasingly self-directed, digitally led and crosses numerous digital channels—social, marketplace, brand site, etc. Amazon plays a distinct role for many consumers along this path to purchase. For both legacy and new brands, it offers an opportunity to generate immediate revenue and act as a discovery platform for new customers.
Unfortunately, many brands continue to sell exclusively through Amazon or other online retailers, believing this is the best (or at least easiest) way to reach shoppers—i.e., meet them where they are. But this isn’t where shoppers want to be. In fact, according to a digital preferences survey, eight in 10 consumers want to transact directly on a brand’s site. They turn to Amazon because, frankly, most brands fail to meet customer expectations. (See infographic below.)
What companies need to grasp is that Amazon is not their brand digital commerce channel. A brand digital commerce channel gives a brand ownership over its customers’ experiences, user insights and data. By increasing the investment in your direct-to-consumer channel, you can gather real-time feedback and unlock the ability to engage consumers with personalized content—something you can’t do when you sell solely on Amazon.
Consumers expect differentiated experiences with brands online
Consumers visiting a brand’s website seek an experience beyond the ability to transact. They want an emotional connection with the brand. Brands can deliver this through an immersive user experience, one that reflects the brand’s unique value proposition, culture and identity, which help drive purchases. When you extend this experience through the entire customer journey—post-purchase communication, packaging, customer service—you create a five-star “click-to-home” experience that ensures a lifetime customer.
For example, our client, Le Creuset, a French cookware manufacturer, launched its brand digital commerce site over seven years ago but continues to sell products through Amazon as part of its omnichannel strategy. As a premium brand, Le Creuset is a unique product for the Amazon marketplace, given its price point. Amazon certainly offers a path of discovery for customers unfamiliar with the brand’s products. However, most shoppers want to do some thorough research before purchasing a several-hundred-dollar cookware item on an online marketplace. When they want to learn more about Le Creuset and consider a purchase, Le Creuset’s brand digital commerce channel shines.
“There’s an expectation from the consumer that if you go directly to the manufacturer, you should see unique benefits you can’t get anywhere else,” says Andy Denton, manager of ecommerce strategy and optimization at Le Creuset. Le Creuset’s site provides shoppers features such as Shop by Color, free gifts, exclusive products and recipes. “Our customers love the free gifts; it’s a huge conversion boost for the site,” Denton says. In the past few years, the cookware brand has been investing heavily in its direct-to-consumer site, enabling it to be a significant portion of its total online sales.
The strategic benefits go beyond revenue
The direct relationship with consumers brand digital commerce enables has major downstream impact, including higher margins and higher media ROI as a result of more efficient ad targeting of known users. In fact, according to an Adweek/Brandweek Insights survey of marketers and ecommerce professionals, 98% agreed that data collected on a brand digital commerce site can improve the overall effectiveness of a brand’s marketing strategy. This is further proof that a data-driven approach to digital transformation will pay dividends for brands set up to capitalize on insights from the information they collect.
There are other advantages that offer the potential to drive incremental digital revenue growth. For instance, brand digital commerce is the ideal platform to display a wider variety of products, including hard-to-find or special-edition items not available at retail partners. Or your brand could offer unique ways to buy the product, such as autofill subscriptions or buy-online-pick-up-in-store.
Additionally, technology has made mass customization a reality. Computer manufacturer Lenovo gives consumers the ability to create a tailor-made, high-end computer at a marked-up rate, while our team supported Huggies with the launch of a fully customizable diaper gift offering.
Brands that sell on Amazon should reinvest the proceeds into their own brand digital commerce channel. This is a long-term play and a necessary one to ensure sustainable growth. The more you improve the customer experience on your brand digital commerce site, your dependency on Amazon will decrease as your direct-to-consumer channel’s revenue share increases. More importantly, the strategic benefits of selling to your consumers will accrue to your brand and not to an online marketplace that threatens your very existence.
Conclusion: Marry a clear strategic approach with the right capabilities to win
The digital customer experience spans your customer’s first engagement with your brand’s website to when products land on their doorstep and continues through the entire customer relationship over months or years. Mastering this experience is a transformative journey for many companies. Brands that have a clear strategic approach and the right internal culture have a head start. Together with powerful technology solutions and aligned partner relationships to make effective use of them, they are poised to win in their markets.