August 9th, 2021 | 6 MIN READ

How to Avoid Channel Conflict When Launching a D2C Website For the First Time

Written by author_profile_images Hannah Jarrett

Hannah Jarrett leads Product Marketing at Elastic Path.  In this role, she focuses on bringing differentiated products to market that help digitally-driven brands drive revenue growth. 

Times have changed for branded manufacturers who traditionally sold only through third party dealers. At Elastic Path, we see proof of this every day. More and more brands are eager to expand their reach and connect with customers by selling directly to them. These brands often come to us looking for a partner to help them drive new digital revenue through D2C AND keep their existing dealer relationships. In this post, we will dive deep into this trend and explain how Elastic Path can now help businesses avoid channel conflict when launching a D2C (direct-to-consumer) thanks to our newly launched Pre-Composed Solution™ for Dealer-Enabled D2C Commerce.

 

Why D2C Now?

 

There isn’t one single reason why brands are embracing D2C with more enthusiasm now than ever before. But, there are several contributing factors to consider:

  1. Customers want to buy direct: As customers become more comfortable with purchasing via digital channels, they are less likely to visit their local brick and-mortar distributor. Instead, they want to go straight to the brands website to quickly and easily make a purchase.

    According to a PYMNTS report, “the use of online direct-to-consumer (D2C) channels to purchase consumer-packaged goods (CPG) has grown by 50.1 percent since the pandemic began”

  2. Pressure to drive growth with digital: Many brands are feeling the pressure from their c-suites and boards to drive increased digital commerce revenue. Whereas digital commerce was once a small portion of total revenue, we now see it making up a larger share of businesses focus. Brands are looking for new ways to increase this revenue source, such as launching D2C.

  3. Freedom to innovate & differentiate: When a brand adds a D2C channel, they no longer have to conform to dealer regulations. This empowers them to display a broader product range, control their pricing and discounts, use their preferred content, and speak in their own brand voice. Brands long for this control as it means they can finally create truly unique experiences that differentiate them from the competition and “wow” customers. As markets become more crowded, this differentiation is critical.

  4. The Covid-19 Pandemic: There are two main reasons the pandemic accelerated digital commerce growth. First, many brick-and-mortar stores closed up shop for safety reasons. This meant that brands who relied heavily on in-person shopping needed to find another way to drive revenue. Many of these brands, went direct-to-consumer for the first time. A second reason was availability. During the pandemic many dealers struggled to stay fully stocked on key products. The manufacturers of those brands prioritized keeping their limited products to sell directly to consumers for the highest ROI.

    According to eMarketer, US D2C eCommerce sales grew 45.5% last year—generating $111B and making up 14% of total retail ecommerce sales.

It’s clear that there is a massive opportunity for brands who want to launch D2C commerce for the first time. But before going all-in on D2C, brands need to consider how their new D2C business will impact their existing dealer partners and if it will cause channel conflict.

Simply put, channel conflict is when two or more partners in a sales channel oppose each other. In this case, brands need to make sure that they are not competing against their dealer partners. Neglecting to evaluate channel conflict to the point where you alienate your dealers can cause brands to:

  • Lose access to customers who have strong, loyal relationships to your brand, specifically through your dealers
  • Lose a vital distribution channel, especially when it comes to brick-and-mortar
  • Blindside your dealer partners, damaging relationships and negatively impacting your bottom line

 

Adapting a Multi-Channel Strategy

 

If this sounds like a challenge your business is currently facing, do not fear! Many brands have navigated channel conflict when launching D2C commerce for the first time and you can too. A thoughtful, multi-channel strategy can help you reap the benefits of both going D2C and keeping your dealer partnerships intact. For example, enabling consumers to purchase on your direct site and picking up at a dealer location. Brands who embrace a multi-channel strategy are able to drive rapid growth, power convenient experiences for your customers (regardless of how they choose to shop), and supercharge brand differentiation.

But how do I adopt a multi-channel strategy? Great question. One of the key enablers to successfully going multi-channel is technology. Flexible digital commerce technology that empowers brands to customize per their unique use cases, easily integrate with core third party technology, and launch in weeks, not months –is key to multi-channel success. That is exactly why Elastic Path is announcing our new Pre-Composed Solution™ for Dealer-Enabled D2C Commerce, built by our partner Cnetric.

 

Pre-Composed Solution™ for Dealer-Enabled D2C Commerce

Elastic Path eliminates the complexity of launching a dealer-integrated D2C channel by pre-assembling core commerce functionality from Elastic Path with Contentful for CMS, Algolia for search, and Stripe for payments.

Go to Solution

New: Pre-Composed Solution™ for Dealer-Enabled D2C Commerce

 

At Elastic Path, we understand the need to balance speed to business results and the ability to customize for your unique use cases. While API-first commerce is a great fit for innovation, some solutions are extremely time consuming to launch and optimize. That is exactly why we offer Pre-Composed Solutions™. These business-ready solutions are pre-composed from a combination of Elastic Path commerce capabilities, 3rdparty integrations, and customizations that brands can use to quickly deploy a commerce solution; with greater flexibility and less risk.

Our new Pre-Composed Solution™ for Dealer-Enabled D2C Commerce, built by Elastic Path partner Cnetric, reduces the complexity of composing and launching a net-new D2C channel by combining core commerce capabilities from Elastic Path, a D2C storefront built on REACT , Contentful for content management, Algolia for search, and Stripe for payments. This solution also eliminates channel conflict by integrating a dealer portal for fulfillment management so that orders placed online can be picked up in store or shipped from store. Plus, since this solution is built using microservices-based architecture and Cnetric’s Universal Commerce Framework, it’s easy and fast to optimize on demand as customer needs and competitive pressures change. Brands can switch out preferred third party technology such as their CMS or search provider in as little as 30 minutes.

Core functionality includes:

  • D2C web & mobile storefront built on REACT
  • Pre-Integrated Best-of-Breed Technology
    • Contentful for CMS
    • Algolia for search
    • Stripe for payments
  • Builtt on Cnetric's Unicerval Commerce Suite which enables low code/no code swapping of technology partners as neeeded
  • Fully Integrated dealer portal
    • Inventory management updates process in real-time to the storefront
    • Pickup and delivery order processing with order status updates to customers
    • Support for curbside pickup

 

We'd love to connect on how this Pre-Composed Solution™ for Dealer-Enabled D2C Commerce could help you launch a D2C channel without creating channel conflict. Reach out today or, join us for a live “All Demo-No Pitch” session of this Pre-Composed Solution™ on August 25th. Register Here.

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