how to start building your d2c channels · 2019-05-13 · unilever case study –baby dove d2c...
TRANSCRIPT
Logistics
Digital Merchandising, Assortment & Pricing
Strategy
Channel Design Development, &
Management
Commerce
Payment Processing &
Revenue
Fulfillment Strategy & Fulfillment Center Design
Warehousing Execution
Automated Kitting & Order
Assembly
Last Mile Selection & Management
Strategy
• Identify & develop unique value of DTC proposition
• Product identification, differentiation & economics
• D2C channel management, consumer analytics & transaction management
• Select fulfillment center locations based on demand & company’s supply chain
• Choose layout, storage, robots, etc. for efulfillment requirements of a business
• Variably priced fulfilment center processing
• Agile robotics enable ultimate sortation flexibility
• Last mile management through partner network
ECOSYSTEM
End-to-End Program Management & Customer ServiceData Capture & Analytics (Customer 1st Party Data)
Enabling Technologies
D2C Enablement: From Strategy to Delivery
Before I answer the question, let’s define D2C
In a direct-to-consumer model brands sell directly to consumers, bypassing the long-time model with a retailer in the middle – in simpler words, brands move from a B2B company to
a B2C company and start shipping ‘eaches’ and not ‘pallets'
Market trends directly impacting CPG brands
CHALLENGER BRANDS
SHIFTING CONSUMER
PREFERENCESRISE OF AMAZON
Consumer tastes and preferences are evolving and they are demanding more out of CPG brands
Long-term benefits
▪ High-protein, plant-based, low-carbs, no-sugar, vegan, gluten-free, etc.
▪ Plant based products
▪ Chemical-free formulas
▪ Vegan, gluten-free options
Visually appealing
▪ Bold solid colors, in packaging
▪ Instagram ready
Lifestyle-focused
▪ Personalized products
▪ Convenience focused
▪ Products bundles with services
▪ Promotes energy, quality of life, sleep
Smaller D2C and boutique brands continue to emerge and disrupt established players
Disclosed funding: $295M
Retailers own the customer but CPG brands continue to spend significant dollars on digital marketing without getting measurable ROI
- Cannot measure ROI
- Driving sales to retailers who are
selling many other categories
(including competitor products)
- Hard to measure time taken for
customers to actually purchase the
product
- No access to critical customer and
transaction data
https://www.emarketer.com/Chart/US-CPG-Consumer-Products-Industry-Digital-Ad-Spending-2014-2020-billions-of-total-digital-ad-spending-change/186604
Expected spend on digital
marketing in 2017
$7B
The unintended consequences of Amazon’s rise are now being felt
- Amazon is driving consumer behavior and the
relationship with the end consumer, not the
brand
- Private label explosion
- Customer specific data masked
- Alexa reduces brand choices as it focuses on
categories
- Marketplace monopoly
Rise of Amazon’s Private Label
- Amazon’s private label brands have
grown from around 30 in 2017 to over
100 as of March 2018
- Amazon’s private label business could
be worth $25 billion in sales by 2022
- Amazon also has access to Whole
Foods’ 365 private label brand
portfolio and continues to promote it
on Amazon and through on-demand
delivery channelshttps://blog.iserve.com/the-rise-of-amazon-private-label-brands-how-can-you-compete
“
Pure eCommerce will be reduced to
a traditional business and replaced
by the concept of New Retail―the
integration of online, offline,
logistics and data across a single
value chain.
”
- Jack Ma, Alibaba Founder and Chairman
New Retail requires brands to consider commerce as ‘Uni-Channel’ centered around consumer experience
Seamless user experiences
Efficient & agile supply-chain
New business models Collect and analyze data, take real-time
actions
The Program
The My Baby Dove D2C program directs customers to a branded microsite, where they can create personalized Baby Dove products and have them delivered directly to their home.
Unilever Case Study – Baby Dove D2C gifting channel
Key Objectives
1. Add new revenue streams2. Obtain consumer insights3. Strengthen the relationship between the consumer
and brand (email opt-in as well)4. Market differentiation - provide a unique product
offering to Canadian customers
Unilever Case Study – Baby Dove D2C gifting channel
Seamless user experience
A mobile responsive eCommerce site with minimum distraction, easy payment options
and order tracking
Efficient & agile supply-chain
Collaborating across the value chain to build a model that
enables on-demand printing and daily
fulfilment of orders
New business models
Consumers buy directly from Unilever and are
willing to pay a premium price for
personalized products
Collect and analyze data, take real-time actions
A comprehensive suite of customized dashboards
enabling brands to access critical insights in real-
time
Brands need to ensure better visibility, transparency and agility across the value to chain to succeed in the world of ‘New Retail’
Accelerated innovation cycleContinuous experimentation with limited understanding
of demand
Short runs, quicker go-to-market channels
Localization and customization based on the
market and local environment
Efficient supply chain which brings brands closer to your
end consumer
Cost Management
Quality & Traceability
Sustainability & Waste Reduction
Service & Speed
Building direct relationships can unlock tremendous value across the organization
- Create your own unique branded customer experience
- Get access to critical 1st party data
- Drive customer intimacy - the data collected is better because every transaction and
interaction is captured. It’s one CRM. It’s one store, where everybody knows your name.
- At scale, the product gross margins are at least twice of eCommerce (e.g. 65% versus
30%). The contribution margins can be 4–5x higher (e.g. 40–50% versus 10%).