D2C e-commerce vs. B2C e-commerce: What are the differences?
Choosing the right e-commerce strategy comes down to the brand, the product, and the consumer.
3 minute read
Choosing the right e-commerce strategy comes down to the brand, the product, and the consumer.
3 minute read
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But as a marketing strategy and a customer journey, D2C/DTC e-commerce, or Direct-to-Consumer e-commerce, has pronounced differences from B2C, or Business-to-Consumer. Foremost, D2C means the product reaches the consumer directly via digital channels without a middle distribution channel. While technically a B2C model, Amazon is popular with direct-to-consumer brands looking to expand their reach and increase their sales, and actively encourages D2C brands to join their network. According to the Direct-to-Consumer Purchase Intent Index, four in five consumers will make at least one purchase through a D2C brand over the next five years. Over half of shoppers now make purchases through D2C, according to research by Gartner.
Except for one of the letters, D2C and B2C sound similar enough. They are processes to get products to consumers, which is the ultimate objective of businesses. But as a marketing strategy and a customer journey, D2C/DTC e-commerce, or Direct-to-Consumer e-commerce, has pronounced differences from B2C, or Business-to-Consumer.
Foremost, D2C means the product reaches the consumer directly via digital channels without a middle distribution channel.
B2C also gets goods to the customer, but — obviously — it's not a direct route. Retailers or wholesalers might be parts of the equation.
That's why D2C advertisers like to tout the saying: “We cut out the middleman.”
Whether that's a prudent strategy depends on the brand, the product, and the consumer. Sometimes, a transaction with a distributor, wholesaler, or retailer has as much value as a direct sale.
The benefits of an online D2C e-commerce strategy are numerous. They include personalization and customization, greater product variety, guaranteed inventory, increased cost control, actionable data insights, opportunities to engage and influence over marketing, production, and distribution.
As a business model, B2C e-commerce can take a few forms, but in simple terms, B2C companies are intermediaries who don't actually own products or services, but connect buyers and sellers together - examples include Expedia and Etsy, subscription-based streaming services like Netflix and Spotify and community-based social media platforms such as Meta, where advertisers use the platform to promote products directly to consumers.
While technically a B2C model, Amazon is popular with direct-to-consumer brands looking to expand their reach and increase their sales, and actively encourages D2C brands to join their network. D2C brands can leverage Amazon’s reputation as a well-established online shopping brand and buyers have peace of mind about customer service and order fulfillment and can shop more confidently.
80%
55%
31%
In terms of customer relationships, D2C e-commerce is hardly a new trend. Merchants have sold their wares directly to consumers for centuries. But as transportation, industry, and technology evolved, businesses saw the need to expand, provide a new customer experience, and reach a more geographically spread-out customer base.
Digital commerce changed market dynamics. Until 20 years ago, B2B and B2C had clear distinctions. Factories sold to stores in bulk (B2B) and stores sold to consumers in smaller quantities with a markup (B2C).
Brands now could test how and where they would distribute and what retail relationships would look like, and whether they wanted their customer experience to take the form of a brick-and-mortar retail store or an e-commerce website.
By utilizing D2C, businesses could offer customers an online shopping experience tailored to their preferences and behaviors from end to end. In the beginning, large companies had a learning curve to master before investing fully in their e-commerce website.
Since the pandemic, consumer expectations have changed considerably, with preferences increasingly given to brands that offer omnichannel shopping experiences. Meanwhile, more and more brands are turning to composable commerce solutions that give them the freedom to flex in the moment and adapt to evolving consumer trends and demands.
The D2C retail model is disrupting traditional retail because it offers numerous competitive advantages. What are those advantages?
Here are seven benefits to consider:
Having a D2C strategy increases brands' resilience in their market route. It's a direct route, yes. But brands should also count on multiple routes between destinations. Just like investing, brands should diversify and have other options.
If a brand has only one route to their consumers, then any disruption — supply chain and inventory management issues come to mind — will be painful, if not a deal-breaker.
By planning ahead and establishing multiple routes, a brand can weather any storm without significant disruptions.
A D2C channel allows brands to build direct relationships with their customers — and by direct we mean a close connection, just short of being a personal concierge. Ongoing engagement provides learning opportunities for brands. They can absorb crucial data — preferences, dislikes, aspirations, and future needs. Leveraging this information, brands are able to tailor interactions and create experiences that help customers build trust and loyalty.
A solid D2C strategy needs a foundation of solid data. Using up-to-date, real-time information, brands can create relevant, personalized, omnichannel experiences that make customers feel truly seen and understood.
Delivering these types of tailored experiences at scale requires a next generation solution –this is where Sitecore can help.
To find out more about how Sitecore can transform your e-commerce business, reach out to one of our experts.