The global crisis has in many ways fast-tracked the adoption of the direct-to-consumer (DTC) approach, which allows businesses to have increased control over their brand and product, while gaining valuable customer insights. Mike Thornhill, Business Manager at Michael Page Marketing, recently spoke to Jeremy Schwartz, a Senior Advisor at McKinsey’s Business Transformation Practice. Jeremy is also the former CEO of L’Oreal, Pandora, and is currently chairman of the board for Good Hemp. In this fascinating interview, they discussed the important presence of ecommerce during the pandemic, how manufacturers can win online, and the future of the consumer industry. The online marketplace can at times be overcrowded, making it difficult to stand out. So, how can manufacturers and retailers overcome this?The two roles that companies have with their ecommerce sites:Attract the right people effectively to visit a siteDrive conversion to sales once they have arrivedThe biggest things ecommerce teams and their leaders can do is to drive ecommerce conversions and focus on the product landing page (PLP). Also, add as much information as possible to help customers make a choice. This should include a video of the product in action as it would answer the huge variety of questions customers have, but might be afraid to ask. Amazon is the best in class example of what brilliance looks like and is the most successful ecommerce company in the world. Also, the payment system is the biggest reason to lose conversion, which is why customers stick to consolidators like Amazon, eBay, Next etc. People should not have to enter lots of personal data, but rather leverage third-party systems like Paypal etc. However, there is a balance to be struck. Using Google and Facebook, between re-engaging bottom-of-the-funnel existing buyers to return, with new customers at the top of the funnel. At every point, and every week of every month, teams need to be adding services and adjustments to make it simpler, and more compelling in a bid to attract new consumers.What infrastructure is needed to be effective, efficient, and make a profit from the direct-to-consumer approach?This is a whole new business model, although very effective to build brands and sales. Retail space can allow a brand to be present, to complete a brand range, and bring to life a total brand immersion experience. However, in this present retail environment where footfall is declining, it cannot be entered into lightly. Covid has driven consumers to engage even more in ecommerce, further suppressing retail sales. It has also forced property owners to reduce rent and embrace a sell-out linked rent model, which can make a DTC retail model more viable. There are too many elements connected to succeeding in retail to cover here, but know-how is the most important starting point and not signing a (tenancy) contract that is longer than five years. Resist the temptation to open in a particular location that may lead to a rent premium being paid, which the bricks and mortar store sales will never payback.What importance would you place on consumer data and marketing when establishing a successful DTC or online platform?Consumer data is now the number one asset companies can generate and leverage. The appeal of ecommerce and DTC is that it allows companies to both ask for consumer data directly, and to track consumer behaviour in order to generate data. Data allows targeting, engagement, and segmentation of customers by their value to the company amongst other attributes. For me, consumer data is as valuable as the products themselves. In some ways, the biggest challenge is to have people in the company who are smart enough to use, interpret, and act on the data, but that is not always the case.What has been your biggest lesson from overseeing DTC or an online platform from your previous organisations?There are so many, and they differ by channel, but first and foremost it is to know the profitability of every store and ecommerce platform-both owned and operated by a third party. It is vital to both allocate costs in a very systematic and proper way, and to pursue cost reductions line by line to optimise profitability. It is very easy to lose money in both channels by making decisions that become very hard to get out of. For DTC, this can be taking a lease that locks you into a low-profit situation.For ecommerce, it is about offering customers discounts, free delivery, and high returns, all of which dilute profitability and are hard to reverse once offered.What is the future of the consumer goods industry post COVID-19?The consumer goods industry will be fine post Covid because most of what is offered is in many ways essential, or at least span from essential to useful. Some consumer goods during lockdown were unexpected stars, such as flour and baking goods, and the question will be whether this passion for baking will continue post lockdown. The rising levels of unemployment across the world could also suppress all sales as disposable incomes are threatened.Mike Thornhill Business Manager, Michael Page Marketing Tel: +44 161 829 0395 Email: [email protected]MarketingLinksAbout usSalary comparison toolTestimonialsJobs in ScotlandBrowse for jobsGet in touchIf you are an employer and would like to talk to us about your current recruitment needs, fill in the form below and one of our consultants will call you back.
