Lessons learned from selling direct

We’ve been helping some of today's most notable product and service brands stand up their direct-to-consumer channels and here’s what we learned…

We started seeing this trend as far back as 2017. Bai Beverages–one of the decade’s most successful CPG brands–had previously relied on IRL retail and Amazon for the majority of their sales before they started exploring their own D2C eCommerce experience. The business driver wasn’t about additional sales. Rather, it was driven by their need to own the data and the relationships with their customers.

At first, Bai had limited commerce functionality on their site so all traffic–and customer relationships–were sent off to Amazon. Once that customer was handed off, Bai didn’t know what that customer bought, how much, or even what they paid for it. And in true Amazon fashion, they were blessed with an annual six-figure bill from Amazon to be compensated for price matching. Amazon didn’t just own the transaction–they owned the customer relationship and–to an larger extent–the eCommercial destiny of Bai.

The challenger spirit was always baked into the DNA of Bai. So in 2017 they brought in Carter Edwards & Company to help define their new D2C commerce experience and take back control of their destiny. They weren’t the last either. Since then, we’ve been helping some leading brands like Bai, Keurig, Fidelity (yes, that Fidelity), and a handful of start-up brands better understand the opportunities, challenges, and tactics needed to build better direct-to-consumer relationships. Here’s what we learned…

Bai product design by James Cho, Head of Design,
Carter Edwards & Company

Why big brands are opting to sell direct

Building better relationships with the customers

The biggest reason we see our clients going direct is that it allows them to build better relationships with their customers. From community and brand evangelism to loyalty and 1-1 marketing, a brand’s ability to own the customer relationship is becoming a key competitive advantage.

Controlling the brand story

When you lose control of the selling experience, you also lose control of the brand experience and that’s bad business for some brands we work with. Selling direct-to-consumer helps maintain the quality of your product, packaging, and pricing.

Increasing sales

Selling direct is giving brands another storefront. For some, selling direct would have only had a marginal impact on sales–but for others, it was considered a large lift and a meaningful part of their commerce strategy.

More access to data

It’s no secret that aggregating and using consumer data can provide an edge. It’s allowing our clients to build better products, deliver on personalization, understand customer demographics/psychographics, and better monetize the customer relationship.

Increasing visibility

We recently worked with a large beverage brand with a growing presence in B2B office sales. They were missing out on bid opportunities because vendors were recommending higher-margin products. Selling direct has allowed them to directly bid on large accounts while side stepping distributors that weren’t giving them a fair shot.

Lesson 1

Your biggest challenge won't be eCommerce–it will be relationships

In a lot of cases, the decision to start selling direct entails a trade-off between what makes a business successful today versus what’s going to make them successful in the future.

Today, the success of both product companies and resellers are intertwined. These mutually beneficial relationships aren’t based on a casual exchange and a handshake–they’re formalized into contracts that define service-level agreements, data ownership, territories, and a myriad of other conditions. These interwoven interests are difficult to untangle so it makes sense that all parties are better off when “the way it’s always been done” remains in place. Markets aren’t static though. In fact, they’re probably more dynamic than they’ve ever been thanks to the advancement of digital.

For some of the business drivers listed previously, the next-generation of standout brands are investing in their future…and that entails rethinking the relationships that helped get them where they are. It will cause some friction in the short-term, but it’s necessary for some brands to stay relevant and ahead of the curve.

In comparison to the relationship challenges, there are already patterns and practices to leverage for standing up eCommerce capabilities. It’s a myriad of tactics that most companies can accomplish with the help of the right partner. Standing up eCommerce capabilities is the easy part–redefining the relationships that helped get them where they are in the name of future success is where the big challenge lies for most brands.

CE+Co Recommendations

Involve the sales team in strategy and design

It’s likely that compensation and relationships are going to be affected when introducing a D2C channel which can cause a lot of friction…rightfully so. Helping the sales team to understand what it means to the business and taking in their input early on can help keep momentum rolling.

Look for the win-win opportunities

If you look hard enough, you will find opportunities to redefine the terms of the relationship where businesses and resellers can benefit. For ex: selling directly to small businesses and underserved customers can deliver on your DTC strategy while also unburdening resellers from low margin, high lift customers.

Empathy matters…a lot

It’s easy to dismiss the reactions of those involved as “holding onto the old ways”, but their livelihood is on the line and personal relationships have been formed. We recommend spending time in the field, talking to those impacted, involving them in the process, and prioritizing those win-win opportunities.

Lesson 2

Why buy direct when customers can buy from Amazon?

This is the million dollar question…literally. When businesses step into the ring and fight for the attention of consumers, they’re inevitably going to find themselves standing in front of heavyweights. We’re not just talking about Amazon either. The reality is that a sea of eCommerce brands already have a laser focus on selling direct and businesses entering the space will need to do more than just stand up an eCommerce website.

In our experiences, product and manufacturing businesses have a strong bias towards competing on functional benefits such as cost savings and convenience. Unfortunately it’s usually a losing proposition. Existing agreements typically restrict underselling your partners and it’s going to be near impossible to compete on convenience when the incumbents have been investing in the technology for years. It also takes a lot of focus and investment to maintain a leadership position on cost and convenience.

"Our customers are loyal to us right up until the second somebody offers them a better service."
-Jeff Bezos

Rather than look towards the functional benefits as a differentiator, businesses need to look deeper into their purpose and capabilities to understand what they can deliver better than anyone else. A better experience, more tailored service, exclusive products, loyalty programs–these are just some tactics that businesses can apply to gain a sustainable advantage.


Define your "moments that matter"

For every customer journey, there are going to be particular moments that make a big difference in the experience for customers…in some cases, with just a small lift in effort. It could be the unboxing moment or maybe a support call when things go wrong. With these moments defined, you can focus your resources to create an experience that stands out against your average eCommerce competitor.

Create an ownable brand experience

This will be up to each brand to define themselves. Identify what you can provide that others can’t, and string together a commerce experience that feels uniquely you. When done right, you can carve out a space that no one else can deliver on.

Operationalize your brand

There's no way around it, you will have more interaction with your customers. If people within your company don’t understand the purpose behind the work they’re doing, they’re not going to represent your brand in the right way. Training your operations, support, and sales teams on the brand promise will empower them to deliver a truly authentic experience to your customers.

CE+Co Case Study

Designing an experience that’s uniquely Keurig

We were brought in by Keurig to help them design the next generation of their B2B commerce experience. The result was a collection of products, features, and field-support services that help Keurig stand out from Amazon and deliver a commerce experience that only Keurig can provide.

Office Collections

We re-packaged existing Keurig products and invented office collections that can transform the mood of your office.

Keurig’s Sustainability Story

We designed a better unboxing moment that helped tell Keurig’s sustainability story.

Design Your Space

The DYS experience builds on Keurig's coffee leadership so office managers can order just the right amount of coffee.

Field Service Portal

The field service portal is helping Keurig's suppliers and distributors install, maintain, and redistribute Keurig's commercial brewers.

Lesson 3

Product companies will need to be better marketing companies

This lesson wasn’t learned from the commerce or restaurant brands we work with. Rather, this became apparent when we were working with one of Boston’s largest financial institutions. They built their business on on the world of mutual funds that were sold through workplace retirement plans. Much like the world of commerce, their world is changing rapidly too. A decline in mutual funds meant they needed to find new opportunities in “retail relationships” (selling financial products directly to consumers).

They struggled…a lot. Selling to businesses is significantly different than selling to consumers–and the businesses that apply the same formula to each will fail in their D2C efforts. The pitch to resellers and distributors largely relies on economies of scale, ease of integration, and other highly functional benefits. The result is a customer experience that’s transactional and mechanical…and that’s not a winning formula for forging new consumer relationships.

Businesses that learn to adapt to a new way of selling and build more mature consumer marketing practices are going to be more successful in winning the hearts and minds of a new consumer base.


Understand what it means to own the customer relationship

It’s not enough to just drum up demand and get customers into a store location. You will be owning the customer relationship from acquisition to all the way through fulfillment. This will open up an entirely new set of opportunities that include 1-1 marketing and loyalty programs. Shifting your perspective from an advertising/campaign mindset to a customer experience mindset will go a long way.

Focus on benefits over features

Product and technology companies often make the mistake of using overly technical language and focusing on product features that customers don’t understand. Take a step back, think about the problems you're solving, and reframe your marketing to speak to how it solves those problems.

Experience is the product

Product companies intrinsically plan around features and operational functions, leaving the customer experience as an unintentional byproduct. In a time where customer experience is paramount, businesses need to think more holistically about the customer experience that their products live in from the start and consider it during product development cycles.

Best in Class

Nike’s new loyalty experience

Nike is doubling down on direct-to-consumer commerce. The new Nike+ loyalty program wraps up experiential rewards, exclusive access, and in-store privileges to create an experience that no one else can deliver.

See it for yourself
Lesson 4

It’s not about digital commerce–it's about commerce in a digital world

When it comes to direct commerce experiences–digital is the big enabler. So it makes sense that businesses often have a singular focus on the eCommerce website. The unspoken expectation is that, if we build it, consumers will come. This will hold true to some extent, but as the eCommerce traffic scales, it will begin to put undue pressure on other parts of the organization unless the broader implications were considered from the get-go.

For example, we work with a large brand in the food and beverage industry with over 3,000 franchise locations. Digital commerce was such a strong focus of their organization they lost sight of the broader business context. Pilot efforts were successful but, as they rolled out nationally, transaction fees increased for franchisees, staff weren’t trained correctly, and–as it turns out–consumers still had a strong preference for real-life interactions.

It’s convenient to conflate “selling direct” with “going digital” but businesses should understand that a sound eCommerce strategy should seen as a compliment to a broader business strategy and not a replacement of it.


Define the broader Northstar experience and roadmap before diving deep on digital

Product and manufacturing businesses are culturally biased to produce products as quickly as possible. The desire to jump right in and start building the eCommerce experience will be strong, but businesses must be disciplined enough to understand their digital efforts in the context of business operations, sales incentives, support teams, and fulfillment logisitics.

Take a transformative approach to selling direct

Looking at a direct-to-consumer capability from the lens of business transformation will help executive teams understand the broader implications. Processes, incentive structures, existing SLAs, and a myriad of other business functions will need to evolve and a transformative lens will help make the transition easier.

Connect the customer experience to your operations with Service Blueprints

Service Blueprints (or Service Maps) have proven to be one of our most helpful deliverables. An extension of the customer journey, Service Blueprints start with the experience and then connect all the internal processes and hand-offs needed to bring that experience to life. This view helps unite marketing, operations, and technology stakeholders. It helps uncover operational hiccups that could hinder the experience. And Service Blueprints also serve as the foundation for planning and change management.

Wrapping it up

We live in exciting times. Commerce is going through a historically transformative period of change and the brands that take control of their destiny are going to shape commerce for years–if not decades–to come. And as partners in change, we love that brands are inviting us in to help. We’ve been able to build on our human-centered background to create experiences and organize businesses to deliver on something special. And along the way, we’re happy to share what we learned…

The business drivers behind new direct-to-consumer channels extend beyond additional sales. The ability to capture data and use that to form a loyal customer base and inform product innovation is becoming a key competitive advantage.

Navigating and rethinking relationships with resellers and distributors is proving to be a really big challenge, but businesses that can do it will enjoy the advantages for years to come.

It’s not enough to just set up an eCommerce website. Businesses will need to unlearn and relearn marketing practices that cater to a savvy generation of consumers.

Brands aren’t going to beat the big players like Amazon on price and convenience alone. They will need to dig deeper into their brand promise and create an experience that’s uniquely them.

Setting up a new DTC channel will touch many parts of the business so they should think about the implications in a broader context. This will help avoid unintended consequences and bolster buy-in from cross-functional leaders.

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