When starting an eCommerce business in the frozen food industry, you might wonder if direct-to-consumer (DTC) is the right model. Understanding what DTC is and the benefits it offers can help you successfully integrate it into your business operations.
What Is DTC for eCommerce?
Historically, businesses would typically sell to retailers while retaining control over sales and merchandising. Customers could then purchase the company’s products from a particular retailer that carried them.
DTC works differently as it enables brands to connect with consumers more directly, eliminating the need for retailers. In addition to selling directly to consumers, brands can directly communicate with consumers. Whether through the brand’s own website or a site like Amazon, DTC brands can make direct sales while bypassing other retailers.
Why Use the DTC Model for Frozen Food Brands?
There are certain benefits that come with the DTC model that may make it more compatible for your business than going through retailers. The following are some of the main benefits of DTC for frozen food brands and others:
A Better Connection with Consumers
One of the main advantages of the DTC business model is the ability for producers to connect directly with their customers. They’ll have access to their customers’ names, email addresses, physical addresses, phone numbers, and order histories. In the process, they’ll establish a more personal relationship with their customers.
Building a better relationship with customers is also critical for encouraging repeat sales. Without the ability to directly contact consumers, businesses won’t be able to drive repeat sales as easily. Through DTC, you can make offers such as “Free shipping” and “Get X% off your next order of $X or more.”
You can also ask for feedback from customers, which can help you pinpoint what audiences want and make any necessary changes to your business.
Increased Customer Lifetime Value
The customer lifetime value (CLV) refers to the overall value a customer brings to your brand over the course of your relationship. If you want to maximize the average CLV for customers, you can more easily accomplish this with DTC.
Through DTC, you can ultimately avoid splitting the profits as much as you would through a retailer, boosting CLV.
You Have More Control Over Branding and Data
Another benefit of DTC is the ability to gain more control over your brand, reputation, and the data you collect and maintain. This has the chance to dramatically improve your branding efforts and establish yourself as an industry staple.
Otherwise, through a retailer, you may not have that same level of control, which could hold your business back. Keep in mind that once a retailer is in possession of your products, you have to rely on them to increase sales. With DTC, you don’t have to depend on these third parties to generate more sales and raise brand awareness.
Improved Product Launches
DTC also makes it easier to launch new products and make audiences aware of them. This is due to the ability to speak more directly to consumers. You can use multiple channels to communicate new products to customers, including your website, social media channels, and email lists. You’ll also have complete control over the specific message you send and can tailor it to different audience segments.
Consumers Like DTC
Consumers also tend to like buying direct as opposed to going through retailers. This is largely because producers are more accessible today. Another reason is the fact that the manufacturer knows the ins and outs of their products, which third-party providers may not know as well.
Customers may have specific questions about products and seek direct, quick answers. Working with manufacturers directly allows for this, which can help build trust among consumers and make them more loyal.
Determine Whether DTC Is Right for Your Business
The DTC model isn’t universally suited to every business, but it does come with several advantages that may make it more ideal than working with a retailer. The key is determining what you can work with, as DTC is often demanding seeing as businesses need to handle most operations on their own. However, with ample resources and skills, you can make the most of DTC as a frozen food brand.
Need some help deciding on the right business model and other aspects of your business? The professionals at Gray Growth Logistics can help you succeed with your brand.