In this webinar we outline why setting up an eCommerce presence will help you secure ALL your sales channels – and help you serve your customers better in a post-covid19 landscape.
This webinar is hosted by three experts from Magento, Maginus (a Naveo Commerce company) and Consultant, Aidan Connor.
*You might be wondering why this webinar mentions Maginus and/or Digital Goodie….Digital Goodie acquired Maginus back in December 2019. The two products have now combined and in September 2020 Naveo Commerce was born!
Let’s discuss why setting up an eCommerce presence will help you secure ALL your sales channels – and help you serve your customers better in a post-covid19 landscape.
This webinar is hosted by three experts from Magento, Maginus (a Naveo Commerce company) and Consultant, Aidan Connor.
Aidan Connor, the former Global Digital Platform Manager at Mayborn, will share his experience going direct-to-consumer with Tommee Tippee, focusing on the customer journey and personalisation.
Afternoon everyone, thank you for joining us today at our direct-to-consumer webinar. Can everyone hear me okay? and see the screen okay? If you want to send a chat or unmute yourselves just say so to the Maginus Conference.
Before we begin I’d just like to mention that this webinar is being recorded and we will send out the recordings to all participants – you will all remain anonymous as well.
So the speakers we have today are myself – looking very happy in that picture. I’m an Account Executive at Maginus/Naveo Commerce, we also have Jason Ford from Magento who is a Solutions Consultant, and finally we have Aidan Connor who is Head of Digital Experience at RICS. So just a quick run-through of what to expect from today’s session – the webinar will last around an hour. This will include an induction from myself – I’ll be going through some of the key benefits and challenges of opening up a direct-to-consumer (D2C) eCommerce channel. I will also touch on possible third-party conflicts you may face and how to overcome them and also a few areas you should consider such as marketplaces and warehousing capabilities. Following this, Aidan will give a presentation on his experience with working with a manufacturer who opened up a D2C channel and some top 10 tips to get started when opening a D2C channel. Finally Jason will give a demonstration on some of the key areas we’ve touched on for a product demo, and also detail on how we can take advantage of Magento’s subscription offer. Then for the final five minutes we’ll open it up to the floor to ask any questions. Again please open up the zoom chat and send any questions you have throughout this webinar to the conference contact. I’ll share these questions with some speakers and also my colleague James Jones from Maginus/Naveo Commerce and we’ll try to answer as many as we can at the end of this session. Any questions that we don’t answer – we will respond via email.
So, where do we begin? Well, this is a time of uncertainty as retail stores temporarily shut down, Amazon suspend shipments to its warehouses, and consumers are staying at home. We’re seeing a drastic shift in the retail landscape which is affecting businesses of all shapes and sizes.
According to the Center for Retail Research, which has been forecasting retail trends over the past two decades, they predict that by the end of the year that a total of over 20,000 retail stores will have pulled down their shutters for the final time. This is why a direct-to-consumer channel should be considered as an insurance policy against an uncertain future for manufacturers, brands and distributors.
Now traditionally distributors don’t just push products they also provide customer feedback and insights, possible products improvements, the distributor is essentially the experts on the customer while the manufacturer is the expert on designing developing and producing the product. When selling directly to the customer, manufacturers now have to become specialists in every aspect of the marketing and supply chain strategies. Involved in this is building, storing, marketing, selling and delivering their products to the customers retail stores and other outlets.
Change is ahead. It’s only a matter of time before these changes are inevitable. In fact, according to Forbes, “Over a third of consumers report that they bought directly from a brands manufacturers’ website last year” and the number of manufacturers selling direct-to-consumer is expected to grow by 71% – to more than 40% of all manufacturers.
So, what is the opportunity for B2B to go to D2C? Well without selling directly to the end-user – it’s very difficult to shape their thinking, influence their purchasing decisions, and understand what motivates them. Especially in the manufacturing world where you have lack of control in terms of where your products are positioned in a store – which can quite often be next to your competitors products.
If a consumer chooses your products over competitor on a retail site you may have won the sale, but you’ve missed a huge opportunity to build a relationship. So by dealing directly with your customers, manufacturers can get a much clearer view of who they are, what they want and don’t want, and how best to engage with them… and what they expect from their Brand and its products. So how would you gather this insight? Well, this new found information can be collected from, for example, your web analytics. So you have a much broader set of data – giving you control over the end-to-end user experience – from product design which is having access to customer feedback, creating a more customized user journey – which is improving your customers’ experience with your brand, and also allowing you to market a clearer message directly to your end-users that creates awareness. I mean nobody knows their products as well as manufacturers or are as passionate about telling their customers about them – so why leave it in the hands of distributors and resellers who are also trying to sell your competitors products? You now have this huge opportunity to directly engage with the customer. It’s also a great opportunity to fully explain the provenance, craftsmanship or story of your brand, and their products – creating valuable interest. You can offer post-purchase services such as offering the chance to review products online or inviting customers to loyalty programs.
So, by orchestrating the entire journey from discovery to purchase, not only do you have invaluable data in fingertips, you have this option to own and nurture these relationships and improve your overall brand’s image. Along with this a strong web presence with eCommerce, can help introduce more customers to your brand, spread your reach, and lead to further sales but directly and indirectly.
I mean it can be frustrating for consumers to discover a new brand – but being able to buy products without searching through shops or other online retailers and the hope finding what we’re after .
You can also offer products resellers didn’t have available, or chose not to have in-store, this joined up with a much more customised user experience allows you to cross-sell and upsell more effectively. On top of this having more range of products available online will limit customers looking for products elsewhere and also gives you the opportunity to educate users on products that they may not associate it with your brand and expand your market share through reduce barriers to entry. This is due to reduced costs in expansion such as rent on retail stores, warehouses or having to set up new sales channels.
When expanding its new territories, you can tailor the site to enhance your customer experience by using local languages, currencies, correct taxation policies and relevant payment systems.
So, we’ve seen that a direct-to-consumer eCommerce channel promises the potential for increased direct sales at a lower cost, improveed access to customer data, and the opportunity to gain more control over the entire customer experience. But one of the biggest barriers we find when working with manufacturers and B2B brands is the fear that this DTC transition will jeopardise their partner relationships. There’s a fear that this D2C transition will cause potential conflict with keeping your retail partners on-side – at the same time as carrying out new business change projects.
Will your partners see the shift as a threat? and consider you new competition? Will they drop you from the shelves completely? Well it is a possibility – but firstly you have to look at what you currently have in place use your distributor connections to your advantage. Bring the your distributors and retailers along with you. Manufactures could for example use the website as a catalog to which the site can direct customers to certain distributors – but where they can complete the purchase – especially for distributors providing services to customers that a manufacturer doesn’t. Enabling the distributor to fulfill the orders can keep that customer in place – you could offer the basic product on your own DTC channel, or offer an exclusive range or bundles to your retail partners. Again pushing customers to the retail stores. Your eCommerce website, could be used to launch a smaller niche range of products, sub-brands for example, that aren’t available through existing third-party channels – and also use it = to sell spares or accessories that might be carried out by other retailers, particularly on discounted or legacy products. So you’re not directly competing against one another – you’re complementing each other.
Now the transition to a new selling model can be daunting, not to mention recruiting a new team of eCommerce and online marketing experts. But before you do that – have a look internally to see if see if you currently have employees from a B2C background that can help.
You also must consider how to utilise your warehouse – ask yourselves are you optimising your warehouse space to cater to both B2B and B2C customers, consider order size – B2B orders tend to be much larger both in terms of number of lines and product quantity per line – than compared with individual customer orders.
Storage – B2B stock will invariably be stored in large quantities typically on pallets. Well there may be some bulk storage for B2C stock – a significant proportion of it will be held on shelves and bins for example that can be easily accessible for picking.
Delivery Time – B2C customers will be expecting theit goods to arrive within the shortest possible time, that can be next day or even in some cases the same-day.
Shipping – B2B orders are loaded onto pallets either shipping using your own transportation fleet or third-party pallet distribution companies. B2B orders are generally shipped using the third-party carriers such as Royal Mail or DPD.
Regarding returns – Is your warehouse catered to deal with the possibility of high number of returns?
Now marketplaces such as Amazon or eBay can be seen as an attractive way of going down the D2C route, but they are really just the modern equivalent of the traditional department store – whilst you may feel you’re selling more directly to your end consumer by using the platform – the reality is that you’re just replacing one retail channel with another. And one with far more control over your product than most retailers enjoy.
Well further to this – you won’t get much in the way of customer or marketing insight for marketplace partners. Most are highly protective of their data, limit contact with the buyer, and post purchase aftercare. That said – if the alternative is losing business to competitors or your product NOT being available online at all. Then marketplaces may be viable as a short-term alternative, or better still as a supporting channel to your own direct-to-consumer presence.
Your main focus should be about taking all the knowledge you’ve gathered on your customer and portraying that on a D2C channel.
So just a few points I’d like you to take away and consider:
Is your warehouse currently set up for the DTC transition? Can you look internally for D2C experience? Reach out to your current partners and learn best practice – they’ve been doing it for years. And most importantly it’s all about giving your customers the best possible experience.
Now I’d like to hand over to Aiden who’ll be giving his presentation on his experience with working with a manufacturer who opened a D2C channel, so Aiden – over to you.
Hi, I’m Aiden Connor – I’m currently Head of Digital Experience at the Royal Institute of Chartered Surveyors. Previously I was Global Digital Platform Manager at Mayborn Group and International Digital and eCommerce Marketing Manager at Rajovac / Energizer.
I’ll pull some kind of real-world examples from both of the latter two today. So, why go D2C? So, the businesses that I’ve worked with in the past worked – the reason that they’ve gone direct to consumer is to take back control and put their customer first so you can remove that disconnect between you, the brand manufacturer, and the consumer themselves. And I think that at this point it’s really important to kind of make a differentiation between who your new customer is (so if you hear me saying customer then typically oh I mean the retailer) if I say consumer then I mean the new D2C end customer.
So, who are you taking back control from? So, there are two kinds of institution organizationally that you’re taking back control from. The first one are your key accounts and the second one is your global accounts or the global market places. Key accounts will try and leverage cash flow against you they will try and leverage your individual sales targets so if you know a sales guy needs to hit his number by the end of the quarter he’s almost more on their team about where what’s happening with your price or your terms, than he is on yours. They’ll also try and barter with you based on economies of scale. You know if they’ve had a great year selling your products – they won’t use that to invest in a partnership with you – they’ll try and use that to reduce price per unit and turn it to their own advantage.
As Toby says you know these global marketplaces are now just did the new digital vision of these traditional bricks and mortar retailers. But what they’ll do is they’ll leverage customer demand – and although they’re actually providing a service to you – for example on Amazon they will actually impose SLA’s and fines onto you and remove you from that supply chain. So, for example, Amazon recently last year backed out of their next-day commitment for prime in some areas now it’s just free, fast shipping, that is usually next day. So you know in terms of that control over that channel it’s another loss of control. But the biggest loss across all of these is most likely, depending on your industry, is the pricing and the true SRP. So all of these retailers or marketplaces will discount your product and the opening gambit will never be standard retail price. So it means that the perception of your customer and the value that your products are worth will be so much lower than actually the true SRP which you can reinforce with your own D2C transaction.
Now there is also of course the unexpected – so it will be a real cliché need to say use Covid as the example for the unexpected – but what I wanted to do is share with you a real example from which I worked through from 2019 which was when Mothercare closed.
So working at Tommee Tippee obviously Mothercare was a massive account for us in terms of our bricks and mortar retail partnership with them. They were our biggest bricks and mortar partner, within our biggest market in the UK – and as you can imagine although it didn’t necessarily lead to a loss of earning within the market – because the mums and dads who are going to shop at these stores were still going to have to buy the stuff elsewhere. It was about a mad scramble to be able to then think “okay, we you know they were gonna go and buy Tommee Tippee from Mothercare” – they still need to buy a Tommee Tippee. Now as luck would have it, we actually launched the Tommee Tippee direct to consumer store the month before this all happened.
So we up-weighted our spend, we made sure that actually our our communication with all the customers was around you know it’s a real sad time by Mothercare but you know look we’re here direct, and actually that proposition and our ability to really operate that communications and own that entire channel was so quick that actually as far as I’m aware, although I’ve since left, it didn’t have the negative impact that it could have done had we not had the direct to consumer channel. And we would have had to have supported the other retailers to try and get them to invest in Tommee Tippee stuff more when you know all of the other competitors are doing the same.
So, we know who we need to take back control from, but we don’t really know why at this stage. So a good quote from Bill Gates is “your most unhappy customers are your greatest source of learning” – so keep that in mind and I’d like you to meet Lisa. So Lisa is a consumer, she might be a happy consumer, she might be an unhappy, or she could be a surprised and delighted consumer. Now in the traditional retail model you actually probably wouldn’t know about Lisa the individual – you would not know, as that product flies off the shelf, whether actually the fact it’s got a four star rating is down to the fact that she didn’t like the product or she just didn’t like the service that she was provided from that particular retailer.
So then the other interesting quirk depending on what industry you’re all in, is that in some cases Lisa won’t actually know who you are. Another case study of that from one of the considerations we had when we took Rayovac direct to consumer was that industry model. Rayovac produce 60% of the world’s hearing aid batteries. How could a consumer not know about a brand that manufactures 60% of the product within the market? Well there’s two reasons for that. The first reason is because rayovac sold or provided more than 90% of the batteries to the NHS which would then go to the consumer. We can see here we’ve got a happy consumer and because it wasn’t a purchase by the consumer it’s just a medical service they didn’t take any brand into consideration they were just kind of getting what they were given. So in that respect when it came to when they’ve ran out of the the standard amount that they would be given when – it they’re kind of back in the wild as it were – they don’t have that relationship with the brand exactly just her we talked about earlier now. Conversely when you have the users who go through and they had they’re not entitled to free batteries through the NHS you have the like of Specsavers and Boots opticians who actually in some cases would be either buying them white label from Rayovac and branding them as their own product – so in case actually the user was using Rayovac batteries but didn’t know about it – this leaves a lack of control over that as a sales channel, because that retailer and at time could change their manufacturer – keep the package almost identical and actually you’ve lost an entire channel. But it’s business as usual as far as the consumers are concerned.
Additionally because of the model within the opticians because it was such an ancillary product they were often given away free again by the Specsavers and Boots opticians so that they and similar businesses – so they could use it as a little tit bit to try and tempt in people – because if you’re picking up a pair of hearing aid batteries for free – then they know that you’ve got a hearing aid and that was the real thing that they were interested in buying. So that was something that we had to overcome and start to build that brand. Be active within the hearing impaired community to be able to then initiate that conversation with the consumer and build that relationship with the brand.
In both of those examples, I’ve talked about getting to know the customer – so this big purple circle that you see here… Imagine this is customer insights – this is purchase data; it is information about how the customer is, where they shop, how long, how many times, did they have to return to our site before they bought everything? Everything you can possibly imagine and then some of that data will make its way back to the retailer. But the important thing is that it’s only the data that the retailer is interested in themselves.
After that, in a traditional model then a little bit of that data then goes back to the distributor and as you can see – at every stage this is getting diluted – and these diagrams are obviously not proportional but it’s just to illustrate that kind of loss of knowledge, and then by the time it finally gets back to you guys (the brand or the manufacturer) actually this reduction in insights is so it’s so severe that actually you may be dealing with incomplete data sets, it may not actually be useful to you anymore because it’s been retweaked to the retailer’s and the distributor’s needs. We call this the distributor disconnect so you can see that the insights are just going downhill.
The missing data insights are huge and really far-reaching. I just want to highlight a few of them for you. When I’m trying to work on this type of project what I do is I try and lump those missing insights into three buckets which are consumer insights, transactional insights and product insights. So your consumer insights are things are really getting to know that the value of your customer and what would happen if you invest further in a customer. You know what is their lifetime value so if you know that a customer’s lifetime value is ten thousand pounds for example you know you would be willing to invest a lot more in getting that customer on board. What’s their lifecycle? How often do they purchase from you? What is the brand perception of you? So if you do start to invest more – if they have a negative brand perception – will you have a high drop-off? and you also get to learn about customer retention because one of the really important things about dealing with a customer via a retailer is you don’t know about those sequential transactions. So you know that you sold 15 cars for example or 25 t-shirts – but you don’t know if that’s 25 t-shirts to five people or 25 t-shirts to five people or two to 25 people. You then have the transactional insight – so things like return on investment? What’s the cross sell information? You know how many people bought jeans with those t-shirts, what’s the cost per acquisition of a customer? Or a particular sale and also purchase patterns as well – are people buying two t-shirts at once? Do they buy them one at a time for example. Then you also get product insights as well… so you get product satisfaction insights, service satisfaction and this is really important because as Toby said about before you’ve got the likes of Amazon, or eBay where – actually you’ll see a product they might have a three star rating but it’s actually because it got delivered late – which was no fault of you the manufacturer that it got delivered late so the product and service insights end up getting lumped into one. The customer may make a snap judgment on your product without in many cases reading the comments associated with those star ratings. You also have the ability to make product improvements. Having that relationship with the consumers means that you can tweak and try and change things. You’re also a lot faster getting to market with product testing.
So when you take all of these into consideration the reason we’re all in business is because we want to benefit the bottom line. So how does acting upon these insights show in the bottom line? What I’ve seen for working with many brands, not just the ones shown here, is that actually within every market, the traditional distributor or retailer model, will reach a revenue cap – and what that revenue cap is, is when you’ve sold to all of the distributors that you want to sell to, you sold to all of the retailers who are big enough to buy your product with the credit terms that you want to run, so what you do is you say right let’s expand into new markets and start the process again. However, by going direct to the consumer you can also demonstrate vertical growth and break through that revenue cap because you can sell one product at a time two products at a time direct to that consumer who may never, in the cases of say Germany or the US, where they don’t have the national coverage with with some of their chain stores. You may never even got listed with that retailer because of this revenue cap and then of course it goes without saying that there’s the added benefit of the increased margin.
What about the elephant in the room… keeping distributors happy and maintaining control. There’s three ways to do this, or three ways that I’ve done in the past, which is: stage releases partial releases and exclusive releases. So stage releases you have NPD and NPI launched over different channels at different times. You have partial releases which are individual SKU’s released on some channels, but not on others. Then you also have exclusive releases where you would have an exclusive product line which would only go to certain channels.
So again back to Tommee Tippee for an example of this – so those of you who are a parent may notice Tommee Tippee prep machines, so in a first example which is a stage release you may have your direct to consumer release which could be one week, three weeks, ten weeks before the retailer release – and all of the models within the range will get released on the the retailer site at that time. The next stage is the partial release so you’ll have a direct to consumer release and the retail release at the same time but you hold back you know unique SKU’s, it could be a certain colour way, it could be a certain enhanced version of the product with the better feature. It totally depends on your how your business operates in your catalog. Then the next one is the exclusive release which is where only direct to consumer would have the product line and the retailer wouldn’t get it.
Now depending on how aggressive you are in your approach to direct to consumer – you can actually just flip this model on its head and actually initiate the retailer release first so you would support your retailers then launch later on your D2C site to show your commitment to them, and then realise the direct to consumer benefit. You can do the partial release where you would have core lines yourself, and you can also do the exclusive release with your retailers and then just have the classic find a retailer link.
Now there are reasons why you would do this the other way – first of all is to be less aggressive but also in terms of the exclusive releases – it may be because you sell something like a pram or a car seat that requires either some kind of fitting or requires some kind of practical demonstration, and the customers don’t yet have the confidence to buy that product online.
So with all that in mind – what are the top ten considerations for starting direct to consumer?
When Naveo asked me to do the “top 10”, I started off thinking what would be the considerations – but actually when I think back specifically to what are the considerations that a B2B business has to take into account over one say going fresh into D2C as a start-up – is actually the considerations that you need to be most wary of are the differences between trading between B2B and B2C – so the content style and tone of voice. It’s very different – you know a lot of you guys who are in B2B will be used to sending out spec sheets, talking about what support you can give in-store just as much as the product itself. Whereas customers need to know about their real-life use cases.
Number two is understanding where the consumer lives – so you know this is the difference between going out and finding your customers (your retailers on LinkedIn) versus your consumers on Facebook, or Insta or tik-tok, depending on where your demographic is.
Forecasting – forecasting becomes very different because because you’re sellinh stock one item at a time and in some cases you’re selling it with different minimum orders. So for example, you might be selling a bundle with five products but those five products are also available individually. You need to kind of have a different thought process with your forecasting to deal with that incremental sales style.
The next thing is packaging – so obviously customers expect to have that brand proposition and the packaging – it’s all part of that experience of receiving and communicating with the brand. That is very very different to having a pallet with a number of products on top.
Then there’s also warehousing and logistics which i think is probably one of the most obvious ones but something to check is that a case study that I had recently with actually a well-known adult product manufacturer is that they had a really good relationship with DPD but actually DPD have a completely separate department that deals with deliveries to home as it does with deliveries to businesses. So actually their economies of scale that they had and were getting a great price on B2B was not then reflected instantly because it’s on a totally separate P&L and that’s just the way the logistics companies work.
The next thing is pricing – you’ll need to obviously have a different pricing strategy for how do you handle promotional discounts and things like that. Consumers will expect a very different style of promotional discount to the kind of bulk quantity discounts that you have within your B2B proposition.
Marketing conflict – so the other interesting hit thing here is this is probably where as far as the summer is concerned you become a competitor with your own Euro retailers. So for example, this is a very real case study where Mothercare used to bid on Tommee Tippee as a keyword within Google Adwords so when they’re doing that, and then we were doing that, it actually drove the price of the click up and that doesn’t benefit anybody but Google. Being aware of this and trying to be really clever about your keyword strategy (because your retailers will not be being clever) they’ll be going for the obvious stuff because they’ve got a thousand categories and whatever else to try and manage.
The next one is customer service – your customer service will change. You’re going to have to start dealing with some calls from customers about “they’ve forgotten a password”, “where’s my order?”, “I ordered it two days ago and it hasn’t turned up?”. Things like that – so you know the nature of customer service will change. Positive customer service is very much linked to reorders, so in order to preserve that that customer lifetime value that we talked about earlier you know you’re really going to want to have a strong well-planned customer service experience.
Then the last one is payment handling and refunds so being able to process payment handling. Think about that early on – look at which of the payment gateways is right for you based on the services that they provide and also the regions that they’re active in. Also having a refund process as well – a lot of customers won’t be refunded back to the card that they bought on for example they don’t just want to be sent the check in the post or have a credit memo sent like a lot of B2B customers would would be accepting of.
The final one is taxation – so if you’re operating internationally have a good taxation plan upfront for those of you who ever travelled in America personally you’ll know that places an absolute mild minefield for taxation laws so you know it’s it’s not something that is is necessarily has to be an issue it’s just sewing these up. I don’t see any of these as barriers to entry. They’re just things that if you can start talking about them early on – your life will be a breeze. When you leave these things to the last minute because you haven’t a visibility or awareness of them then actually that’s when you start to get some some complications in the process. That’s it so thank you very much for listening.
Fantastic Aidan that was brilliant! We’re going to move on to Jason now for the Magento segment of the presentation.
I’ll just very quickly introduce myself, I’m Jason Ford I’m the Senior Solution Consultant for Adobe for Magento software. I’m based in the UK but work across the whole of India and before sort of joining Magento I worked agency-side so similar to Maginus actually building, developing and launching sites and a lot of D2C type opportunities came across in Magento is incredibly flexible in terms of supporting that and that’s hopefully what we’re going to look at today. I’m going to show you some of the aspects of Magento that can really support you in that journey to launching a brand D2C. So, firstly we are going to look at those customer journeys and from what Toby and Aiden have been showing you so far. Obviously the customer journey and building that relationship with the customer is a real key to making D2C work. So firstly I’m just going to throw a little bit data out there. There’s quite a lot of research around personalised experiences and making a journey personalised. Now a huge amount of companies, nearly 90 percent of companies say that personalisation is going to be crucial to the success of running their commercial endeavors but when we actually talk to customers it’s around 30 percent of customers that actually say that their experiences and their shopping experiences are personal enough. They’re not just being talked at – they want to have a conversation and a relationship with a brand. There’s obviously a little bit of a way to go and what we’re going to look at are ways of achieving that without having to invest huge amounts of time and effort into it. So what do customers get when they’re going to a site so we’ve got a customer he’s gone to a site at the moment and some of you might recognise our looma brand which is one of the themes that sort of out the box but we’ve got someone going to the site and the site doesn’t really know anything about this person and so it’s just giving them a generic experience but what we can do – when we do know somebody – and maybe we know them because they’re our customer of ours, maybe we’ve got them as a customer and stuff like that. Or maybe we just know the products that they’ve been viewed previously and maybe added to their basket. We can start tailoring that shopping experience and and providing a much more relevant shopping experience to this customer – rather than showing them just our generic products on the homepage and hoping that we’re matching the right products to the right customer.
We can actually use their shopping habits to start tailoring banners and promotions and all sorts to that end user. Now the way that we do this is using customer segmentation. So, customer segmentation is really powerful set of tools that essentially allow you to group up customers and make relevant content that you can then promote throughout their customer journey. Really simple quite common D2C or retail type promotion – you know free delivery when you spend a certain amount having a customer segment where customers spend up to 50 pounds they get a message saying you know spend over 50 pounds get free delivery as soon as they spend over that 50 pounds maybe we’ll want to target them with content that says spend over a hundred pounds and get free next day delivery. You’re constantly incentivising them and talking to them in the moment to try and and build that relationship and build that shopping experience around their current situation. Now when you’re looking at customer data and we talked about talking to partners and figuring out how they’re communicating with some customers when you start getting more information from your your web presence as well as you know ERP systems and any other systems that you’ve got. You’ll want to be able to pull that all together to get a really clear idea of who your customers are, what they’re doing what they’re looking for. But also start looking at some of the data around products that sell well compared to those that are selling well in retail stores. Try to figure out why that is and where that information is coming from. To do that we’ve got Magento business intelligence it’s a full data warehouse reporting tool allows you to create really rich and engaging dashboards that you can use to analyse your data and this can be data that’s built into Magento but it can also pull in data from your warehouse management system. Your ERP system, Google Ads, Facebook Ads, all of those sorts of things – so you’re really creating this central data warehouse where you can you can pull these reports together and then have them shared with people internally either via view and edit access or by email on a regular schedule so again distributing that information giving it to people that can actually take action on that data in terms of the integrations.
I already mentioned a couple of these but it goes at a database level or an API level into into these core platforms there’s a few different ways of integrating additional data so you’ve got the ability to push data to it as an API, as well as upload flat files into that, as well so really really open platform there’s pretty much no data that can’t be added in some form or another so it really lends itself to being your go-to reporting tool in terms of building and analysing the reports. It’s all visual and you don’t need to know any coding or anything like that. You can essentially build up these reports really easily analyse data you can create additional metrics based on existing data so if you wanted to combine your sale price plus minus your cost price to get the actual true margin of that individual sale then you can do that live in the graph without having to pull that data into Excel combine it do vlookups, all of that stuff that can lead to mistakes, and the great thing is – once you’ve done it once you can save that chart to a dashboard and it’s there and it’s constantly being updated.
Now the other thing that we we were talking about and something that might concern you is, it sounds like there’s a lot of heavy lifting in terms of getting ready to sell direct to consumer – well with Magento that’s not necessarily the case. Magento comes shipped with payment providers, shipping providers, all pre-integrated and we actually have a huge marketplace that supplies additional integrations that are for the most part just plug and play into various providers. We also ship with a really streamlined simple checkout that has been tested against best practices and we know that it actually helped conversion with customers so we simplify the whole checkout process. If they’ve got a pre-defined shipping address then it’s automatically selected for them. We automatically create shipping methods and pricing for them to get the items to their doorstep and then when we come through to the actual payment stage if they’ve got a saved credit card again this is using a tokenisation method so is avoiding any PCI compliance here nor storing card information on the site. It’s all handled by the payment provider but it gives your customers a really simple way of engaging with your brand and placing repeat orders so all of that together really helps the customer achieve a nice customer experience and removes a lot of the barriers for yourselves, as well to kind of implement that in terms of integrations – as I said we’ve got a huge range of payment gateways included out the box so things like play PayPal and Braintree which are common payment providers in the in the retail market. We’ve also got things like cloner which allows for three stage monthly payments and and split payments and they take on a lot of the own onus on validating whether that customer is a good quality customer and allow them to get that credit and that all comes pre integrated. Similarly you can go to the marketplace and add additional payment methods or additional integrations into couriers and shipping systems so people likeUPS and DHL is just the case of integrating directly into you into the system. So your warehouse manager can essentially scan those items have them bundled and packed and ready to pick up for by the courier.
Now in terms of managing the products on the site there’s a huge range of tools that make this really simple and easy to manage. So, if you don’t have if you don’t have merchandisers or a merchandising team in-house there’s a huge range of admin tools that make this really simple and really easy to manage on an ongoing basis and the first of which is product types. If you’ve got complex products they can all be handled by Magento so we’ve got things like simple configurable bundled groups, virtual downloadable gift cards, these are all different types of products that are handled by Magento and give you additional options and configurable to your typical product variant in terms of colors and sizes.
In terms of you supplying your customers with all of your product variants it’s not a problem when it comes to actually merchandising and showing products on the front end, we implemented a VIP visual merchandiser which allows you to essentially just drag and drop products around to organise them into a relevant order for the customer to see so that way it’s taking a lot of the guesswork out of what you’re doing in the admin to make sure that customers are seeing what you’re intending them to see. Now where this gets really interesting is a new feature that we’ve launched a few weeks ago which is actually using the power of Adobe sensei to do product recommendations. Now I know a lot of us have shopped on Amazon and we’ve seen the the reams and reams of product carousels that have recommendations in there in terms of customers who bought this ultimately added that, and customers who viewed this product ultimately bought this product, and with Adobe sensei – the product recommendation engine that’s been added to Magento – you have that same capabilities so you don’t need to invest in machine learning or AI technology because it’s just a plug-and-play solution. You can just drop that onto product pages and allow the AI to to learn about your customers and then make relevant product recommendations. Enhance that average order value and improve that conversion rate by recommending the right products to the right customers. The these can be added in a variety different methods on the page using things like related products, upsells, cross sells and lots of different tools at your disposal.
When we come to actually the the visual presentation of the site Magento has a piece of technology called page builder.
Page builder is a drag-and-drop CMS editor so you don’t have to know HTML, you don’t have to know CSS, no coding is involved. What it is is a set of tools that are just drag-and-drop so from this left-hand menu you can drag new elements onto the page – it’s all fully responsive and and will reflow on to Mobile’s very nicely and this is just a typical what-you-see-is-what-you-get editor but with a huge amount of power behind it in terms of doing backgrounds banners including products directly into into pages and this can be used across a variety of functions on your website. So, not just the homepage – but landing pages, category pages, product pages can all use this drag-and-drop technology to create really unique and engaging content for your customers.
Okay I’m going to hand back to Toby now.
Fantastic! Thanks Jason – so before we move on to questions – I’d just like to say thank you to the presenters and everyone for attending today’s session. Hopefully you’ve all found it useful.
In this article we outline 5 essential must-haves for a winning D2C strategy – specifically for the home appliance market.
The current COVID-19 crisis has turned D2C routes to market from an opportunity, to a lifeline for many businesses. Take a look at our infographic to find out why.