Almost three quarters (73%) of brand manufacturers are failing to use effective loyalty and sales models, yet the same companies are looking to direct to consumer (D2C) to gain more insights on behaviours of shoppers, according to a new survey by Mobiquity.
Customer service and support was the second largest shortfall identified (38%), with D2C companies failing to meet basic service and support criteria.
The report has revealed that pricing and loyalty strategies executed by brand manufacturers pose the biggest challenge in their D2C uptake.
The report, How to win big in a competitive D2C market, reveals only 27% of brand manufacturers are using effective loyalty and sales models, such as scarcity conversion optimisation techniques and personalised pricing, in order to reap the true benefits of having a D2C channel meaning the remaining 73% are falling short.
Customer service and support was the second largest shortfall identified in the report, with 38% of D2C companies failing to meet basic service and support criteria, such as always-on live chat functionalities.
Key drivers for D2C activation revealed that the second biggest incentive behind opening a D2C channel is to gain more insights on the needs and behaviours of their shoppers the first being to generate a new revenue stream.
Gustavo Quiroga, APAC General Manager for Mobiquity, says that the survey highlights a key gap between brand manufacturer drivers for D2C deployment and their executional shortfalls.
"Our report highlights the desire for brand manufacturers to know their customer better through a direct sales approach, but what we found is that almost three quarters of companies (73%) are blindly missing an opportunity to do exactly that with brand loyalty programs," he says.
"To truly stand out from the competition, brand manufacturers must adopt a user-centric approach to D2C and leverage basic tactics such as personalisation," he says.
"This begins with the development and execution of an effective loyalty program, which allows users to set their criteria and disclose information based on their likes and dislikes, essentially feeding the platform that delivers a personalised and memorable experience its a win-win for manufacturers and customers alike."
Opportunities to optimise delivery and returns (39%), MyProfile (40%) and payments (50%) rounded out the top five D2C shortfalls identified in the report. User experience and interface (78%), sales funnel (74%) and product information (61%) criteria performed strongest among the global D2C respondents.
Yogesh Johar, Assistant Vice President at Mobiquity, says the report confirms that the opportunity is ripe for brands to enlist loyalty programs and leverage their gravity with customers.
"Loyalty is an important tool to build brand equity. It is a fact that large businesses focus on explicit loyalty programs, but it is equally important for small- and mid-level organisations to take advantage of," he says.
"Depending on spending power, this can be enabled via a bespoke loyalty program or loyalty platform, that nowadays is readily available for adoption and integration. It is definitely a great way to reemphasise brand messaging, gather feedback, and re-gaining customer loyalty."
Based on the findings, the report provides five key criteria for brand manufacturers to activate a successful D2C strategy: commitment and funding, talent and drive, agile work environment, good and fair product, and a composable technology stack.