“D2C and Other Digital Adaptations During COVID-19” is a digitization action plan for consumer goods companies during a time of great turmoil, totaling over 50,000 words.
Amid this massive, societal uncertainty, one thing is clear for businesses:
The new economy is increasingly digital. And digital business models may even help to keep people safe.
Brick-and-mortar retailers are trying to account for newly developed lockdown habits. Brands/manufacturers are still trying to figure out how to manage their relationships/tensions with Amazon and the big retailers.
Despite the devastation and business closures, some businesses and verticals have been disproportionately overwhelmed by commercial opportunities. Many D2C brands that provide products or services primarily intended for at-home use have thrived, especially after cracking the code of their customer acquisition.
“The pandemic accelerated trends that were already underway” was a commonly heard refrain in the business community throughout 2020. However, this observation has its limitations and depends on the particulars of the business, category, market, and consumer segment.
To the extent that the pandemic has created and accelerated trends, for what duration will they last? They could be short, medium, or long-term.
A business can’t meaningfully adapt unless it consciously, deliberately, and strategically remains sensitive to its customer base. It must look at relevant segments closely and anticipate their needs.
This Policy2050 report examines the various D2C strategies and digital adaptations that have been utilized during the pandemic, which may be critical to sustaining growth, mitigating decline, turning things around, or blazing a new trail.
The report will analyze the strategies and adaptations that are being overlooked, and it will aim to supply contextual details that further illuminate what is more widely-known or observed. Now is the time to use resources more efficiently and amplify results.
D2C is sometimes misrepresented as a streamlining of operations. In reality, it has its own complexities and requires its own forms of specialized knowledge, especially in terms of customer acquisition, retention, and order fulfillment. The best D2C brands view this as a global market opportunity and as a strategic opportunity to exercise more control over key factors in the customer experience.
As the world continues to rapidly and dramatically change, so will consumers, and so must businesses.
The report is structured as follows:
- Executive Summary: The most important findings are extracted, paraphrased, and categorized.
- D2C Strategies: 12 core strategies are explored in great depth. Specific examples, challenges, and tactics are laid out within each strategic section. This report gleans insights from D2C brands that struggled, adapted, and grew during the global pandemic.
- D2C & Amazon Factors: U.S. political developments have freshly highlighted the ethical considerations and uncertainties of big tech. As a result, there’s also more attention placed on the Amazon seller’s dilemma. With careful objectivity, this section of the report explores questions such as: Will Amazon sales undermine a D2C site? Will Amazon analyze your product, market, and customer data in order to launch a competing product?
- Digital Adaptations for Retailers: Brick-and-mortar might be increasingly perceived as a financial burden. Digital channels are critical. And yet, there’s more to it than that. It takes the right strategy, scale, and optimization to digitally match or exceed previous brick-and-mortar margins, for retailers and brands alike. The best retailers will also harness technologies that are unrelated or adjacent to D2C, in order to address long-existing problems such as return fraud and shopper confusion.
This information and analysis could be useful to an executive determining a strategic direction, or an investor determining what is still relevant within their portfolio and what could become increasingly relevant.
The strategic section of this report will provide comprehensive answers to the following key questions:
- How are D2C brands thinking about customer retention during the pandemic?
- How are different business models evolving, overlapping, and competing?
- How can D2C brands establish the level of credibility required for conversions and subscriptions in their category?
- How are disruptive startups optimizing their channels, clarity, and timing? What’s the ROI on different digital tactics?
- What’s the most important quantitative data pertaining to CX expectations and implementations?
- What are the organizational, strategic, and capital-related advantages or disadvantages of disruptive D2C startups?
- How are D2C brands incentivizing email sign-ups and faster conversions?
- What are the overlooked risks of data-driven strategies?
- How are D2C brands targeting overlooked or misunderstood consumer segments and building online communities?
- How are D2C brands fostering and leveraging creativity to fulfill orders, allocate digital budgets, and gain market share?
- How are supply chains affected by new technologies, government policies, and pandemic-related disruptions?
The Amazon and retail sections will address pressing business questions and concerns, such as:
- How might brands evaluate the advantages and disadvantages of maintaining an Amazon presence in addition to a D2C channel?
- What digital adaptations are major retailers currently implementing and iterating on?
- What structural shifts, new margins, and organizational incentives might be associated with these tech implementations?
- What future technologies and transformations are just beyond the horizon?
Additional, category-specific D2C insights can be found in the following Policy2050 reports:
- D2C brands of all sizes
- brands evaluating D2C or Amazon options
- major retailers, especially those selling outdoor equipment/apparel, and/or those seeking a better understanding of potential disruptors
- management consulting firms
- investors and investment banks
- government bodies and regulating authorities
Companies Mentioned in this Report
Companies mentioned in this report include:
- SK-II (Procter & Gamble)
- Dollar Shave Club (Unilever)
- Peace Out Skincare
- Bokashi Steel Knives
- Rad Power Bikes
- Luke’s Lobster
- Mirror (Lululemon Athletica)
- Bonobos (Walmart)
- Kraft Heinz
- Reckitt Benckiser
- Mountain Equipment Co-op (MEC) (Kingswood Capital Management)
- Bed Bath & Beyond
- Waitrose & Partners
- Appriss Retail
- Thrasio Holdings
- Ad World Masters
- GE Additive (General Electric)
- Brooks Bell
- 3PL Central
Policy2050 excels at identifying the strategies and patterns within complex data that is gathered through exhaustive secondary and primary research. This process includes publicly available sources, such as annual reports, academic journals, consumer surveys, trade publications, industry symposia, and podcasts, along with interviews and inputs from a wide network of market experts and internal knowledge. Strategic perspectives are leveraged from across the value chain and from relevant tech vendors causing disruptions or reconfigurations in markets.
Information is filtered and validated through this lens of expertise and scrutiny, or contextualized to expose differences in results and industry disagreements. Perceptions of current trends, as reflected in reporting, often translate into actions and investments with consequences. The nearly 300 hyperlinks included throughout this report help to ensure that important figures, strategic statements, and other market characterizations are easily and fully traceable.
All of this analysis is delivered within an actionable framework that outlines best practices, proposes innovations or adaptations, and extracts insights from case studies. Infographics and imagery are used to express key concepts and enliven this comprehensive overview where appropriate.
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