The Power of E-Commerce and Direct to Consumer

With the change in people’s ways of living and working brought on by the pandemic, consumers turned to E-commerce and deliveries for food and non-food items.

The online retail channel grew by 44.9% in 2020, and its growth is now at a level that surpasses the pre-pandemic predictions (Source: Mintel Online Retailing UK, 2021). And although digitally native brands were initially the ones to exploit the direct to consumer channel, the shift in shopping habits has led the world’s leading brands to go direct to consumer too.

So let’s take a look at the opportunities and challenges for brands online.

What’s in store for E-commerce

E-commerce experienced rapid growth in the past two years across all categories. That growth was mainly driven by existing online shoppers doing more online shopping during the pandemic, with 54% of existing internet users buying more online since the Covid-19 outbreak (Source: Mintel Online Retailing UK, 2021).

Some categories such as food and drink, clothing, DIY and health and beauty saw a sharp increase in online purchasing behaviours in 2020. And these categories maintained a significantly higher than pre-pandemic level in 2021.

Post-pandemic, E-commerce is set to continue to prosper. However, there are some key trends from the way online shopping is evolving that brands will need to consider to stay ahead in a competitive E-commerce marketplace.

* As more consumers buy from more categories, a broadened purchasing repertoire will be key for driving future growth in online retail.

* Social media platforms have become popular alternatives for online shoppers with 29% of online purchasing made through social channels in the past year, 2021. And sales through social media channels around the world are expected to nearly triple by 2025 (Source: Shopify Future of e-commerce trend report 2022).

* Online shoppers are more willing to support independent sellers and those committing to sustainability.

The rise and opportunities of direct to consumer

Although high street retail stores have re-opened, e-commerce sales don’t show any signs of slowing down in the years to come.

And the landscape of direct to consumer e-commerce has changed dramatically over the years.

Once dominated by digitally native brands, direct to consumer e-commerce attracted larger legacy brands who wanted in on the action. Furthermore, the pandemic exacerbated the competition when stores closed. Brands had to find alternative ways to sell their products, joining in on the direct to consumer journey.

Still, selling direct to consumer has many key advantages. One is that it allows brands to capture customer data. They can easily determine how customers interact with their website and who’s buying. By selling direct, brands have more control over their customer’s journey and can provide the best experience. Direct to consumer also allows brands to interact directly with their customers and build better, long-term relationships.

The latter is crucial considering the rising cost of customer acquisition is a recurrent challenge for online retailers. And businesses are overcoming this by investing in brand building. (Source: Shopify Commerce Trend Report 2022).

Online retailers are putting their brand identity at the forefront to build awareness and trust.

Pai Skincare is a Uk based brand selling sustainable skincare. And after experiencing 51% cost-per-click increases year over year, they are looking to invest in a long-term acquisition strategy through brand building. (Source: Shopify Commerce Trend Report 2022).

The changing role of physical stores

Some digitally native brands have made the leap onto the high street scene to integrate the in-store experience as part of their strategy to build relationships with their customers.

Brands can create a unique experience for their customers by having a physical presence and engaging with their community. For example, the Gymshark flagship store opening in London in summer 2022 will bring the conditioning community closer together. More than a space to sell the Gymshark range, it will provide special events, hangouts and workout spaces.

And although the pandemic rushed Beauty brands into e-commerce. Most online shoppers want to find all their beauty products under one roof and in a single transaction. Like they would at Boots or Superdrug.

New retail concepts are emerging that answer the needs of digitally native brands to allow their customers to interact with their products without any lease commitments. These stores curate products from direct to consumer brands, offering them a digital and physical platform.

The importance of the customer journey online and offline

According to Mark Murray Jones’s article on The Drum, ‘The relationship between online and offline experience is critical’.

Online and physical stores are blending. Customers expect to be able to buy online and return items in-store. 54% of consumers say they’re likely to look at a product online and buy it in-store, and 53% are likely to look at a product in-store and buy it online. (Shopify eCommerce Market Credibility Study, 2021).

Omnichannel presence is paramount for brands to succeed. Consumers’ expectations and buying journeys are evolving. And brands need to engage and communicate with their audience across multiple channels seamlessly.

Does your brand have a clear direct to consumer strategy?

Contact us at hello@thebrandmap.co.uk to discuss further