D2C Can Help Brands Build Stronger Customer Connections Through Data

Third-party cookies that track consumer behavior are going away—eventually. Apple already gave its users the option to limit cookies, but Google has moved its deadline for third-party cookie deprecation in Chrome until 2024. That’s good news for brands that need more time to gather first-party data on their customers. One way to start or accelerate data collection now is through a direct-to-consumer (D2C) channel.

This year, 64% of global consumers routinely shop directly with brands, up from less than half in 2019, and while digital-native D2C brands generate a lot of attention, the numbers show that established brands “drive the vast majority of D2C ecommerce sales.” Adding a new channel when the economy seems to be slowing down may seem counterintuitive, but the data indicates that consumer spending is shifting in ways that may benefit D2C retailers. For example, while most consumers are trimming their dining-out budgets, some are spending more on premium D2C groceries for meals at home. D2C products positioned as high-value essentials are likely to do better with consumers than D2C items marketed as indulgences. Other best practices can help brands connect with D2C customers and gather first-party data.

Refine existing products and develop new ones

D2C site analytics can show which products and categories earn the most attention from shoppers. Order data shows which items sell best and which items customers often buy together. Voice of the customer data from surveys, reviews, and customer service contacts can identify product features that work, those that don’t, and new features customers want. This data can help to refine merchandising and to identify areas where more product investment and refinement holds the most potential for ROI.

Gain insight into your customer journey

Site analytics also show how customers find the D2C website, so brands can optimize their D2C ad spending in the marketing channels that drive traffic most effectively. Another way to optimize ad spend: By identifying where customers go next when they leave the D2C site, analytics show marketers where they can most easily reconnect with those customers via personalized ads, abandoned cart recovery messages, and other offers.

Analytics also indicate which pages and experiences on the site are most compelling, based on time spent on each page and activity on the page. That can help identify the types of content to expand across the site. For example, static product pages may not generate as much engagement or conversions as pages with video content.

Leverage any existing retail presence

Retail presence is one advantage that many existing brands have over digitally native D2C brands. That’s because even though more than half of consumers shop online, most prefer to buy in person. For example, for the 2022 back to school season, 81% listed mass retail stores as their favorite place to buy. Digital-only sites came in second, at 56%.

With their pace of growth slowing, many digital-native D2C companies are now establishing physical stores and wholesale partnerships with retailers. Brands that already operate physical stores or sell to retail chains are ahead of the game and can promote that physical presence in their D2C messaging. Letting D2C customers know where they can try on, test out, and experience products in person now can build the confidence they need to make digital D2C purchases in the future.

Optimize checkout and order decisioning

It’s critical to give D2C customers a frictionless, reliable purchase experience, so minimize the amount of data they have to enter at checkout to reduce cart abandonment. 35% of online shoppers in a five-country March 2021 survey by ClearSale said they’ve abandoned purchases online because checkout took too long or was too complicated.

Screening orders for fraud should be quick and seamless as well. Because personalization underpins the D2C journey, failing to recognize a good customer and rejecting their order as suspected fraud can end the relationship. 40% of consumers in the survey said they’d never shop again with a website that rejected their order. Adding analyst review of flagged orders, rather than automatically rejecting those orders, can avoid offending good customers and increase order approval rates without raising the risk of fraud losses.

Enhance security and fraud prevention

When first-party data is unified with fraud-screening data, the D2C shopping experience can be safer for customers. More first-party data can help fraud-prevention algorithms determine whether an order is coming from a trusted customer or from someone who has taken over that customer’s account. Does their behavior during this visit align with what’s already known about the customer and their past behavior? If not, an analyst review may be required before decisioning.

This matters because account takeover (ATO) fraud increased by 131% from January through June 2022. Rising ATO rates increase the chargeback risk to retailers. They also put customer relationships at risk. 84% of online shoppers in the five-country survey said they would never shop again on a website that allowed a fraudster to make a purchase with their payment data. With more customer data, it’s possible to screen orders more accurately to avoid those outcomes.

Starting a D2C channel takes effort and careful planning, but the returns can go beyond revenue from a new stream. With more first-party data from D2C engagement, brands can improve their products, their marketing, and their customer experience while reducing fraud and strengthening customer loyalty, even when third-party cookies finally disappear.

Original article at: https://retail-today.com/d2c-can-help-brands-build-stronger-customer-connections-through-data/