D2C has exploded onto the scene over the last number of years, but its uptake has really been ramped up since the pandemic hit. We’ve dissected how D2C brands overcame lockdowns and restrictions quicker than wholesalers here, but today we’re going to talk about making the leap to this strategy when it comes to logistics…
As with any business or retailer, growth can happen extremely rapidly – but eventually, a glass ceiling needs to be shattered to get to the next stage of the life cycle. Similar to switching from a wholesaler to D2C, the pain points lie within the supply chain – warehousing, distribution centres, order management and delivery. So, where do D2C aspiring retailers start when it comes to logistics?
To answer this, we recruited the help of our internal experts. Kooomo, ZeroGrey and Go Global eCommerce are on a mission to simplify business expansion and globalisation, so we asked Simone De Ruosi – General Manager at ZeroGrey to share his expertise when it comes to D2C client projects…
When a brand decides they want to become direct to consumer, what are the biggest obstacles in terms of logistics?
The biggest challenge to overcome is efficiency. To meet the needs of B2C customers retailers need to provide quick and reliable operations. Inventory management of B2B completely differs from that of B2C. B2B logistics deals with pallets, standards and larger orders to fewer customers.
B2C is the complete opposite – single item orders, personalised orders and potentially infinite customers. The warehouse has to change completely, resembling something closer to a supermarket than a B2B warehouse.
They have an easier pick up compared to B2B, and the packing operations are often done manually because orders are very unstandardised and a lot of marketing materials are used (thank you card, gift card, gifts, stickers, branded packaging, etc).
Pick and pack also needs to be reviewed completely and, of course, express couriers need to cover the last mile.
Are there any projects you have worked on where you have identified this problem and how did you overcome it?
In Zerogrey, the team provides continuity to our clients and we can help throughout the whole value chain, logistics included. They can give us the eCommerce stock and rely on us to provide the best experience to the final customers. We can of course help them in improving their own internal processes.
In Kooomo, the team provides support to our clients and we can help in the whole value chain. We have 200+ integrated partners, 3PLs included, so in case of need, we can find together the right choice.
By partnering with a 3PL, D2C brands can offer Amazon-like logistics by tapping into services and capabilities such as fast shipping, deliveries and fulfilment automation to quickly scale. This helps them compete against Amazon and other major eCommerce marketplaces.
Let’s talk automation – how best can aspiring D2C brands deploy this to assist with the transition?
Automation and software tend not to be too costly, so that should definitely be taken: having an eCommerce platform that instantly transforms orders paid into warehouse movements is part of our job and it is something affordable for SMEs. However, when we talk about warehouse architecture, pick/pack lines or sorters, investments are of 6-7 digits so they can be justified by business volumes.
If a brand is not used to offering individualised deliveries and packaging, how can they prepare?
Any express courier has a department studying eCommerce customers and defining new products. A brand should create a strong partnership with them and define the best service for its clients. Regarding the packaging, it can be considered part of a marketing strategy rather than a simple operation.
In fact, through the packaging, a brand can deliver the product together with the brand identity and specific communication. The marketing department has to be involved in the decisions and it is plenty of companies that can create personalised packaging for you.
How long before becoming a D2C brand do retailers begin to notice the benefits?
Time can be accelerated by investments, but the maturation of a new D2C approach takes at least from 6 to 12 months.
If retailers currently offer next day delivery through their vendors, do they need to maintain this throughout the transition?
Yes, we can ensure the same services are offered. However, white papers published by the major express couriers’ companies suggest that consumers are looking for other options too – economy, next day, lockers, etc.
Switching to D2C might seem like a daunting task – but once a business is in a position to overcome the pain points discussed above, retailers stand to gain control and consistency of their brand. Two aspects of running an online business that has proven to be vital as we steady volatile lockdowns and restrictions.
Kooomo, and our sister company ZeroGrey, want to help retailers overcome the logistics with ease and will deploy the help of Go Global to absorb these complexities – helping companies take their online sales to a more international audience.
Find out more about how Kooomo and our partners can support and upscale your business by booking a virtual consultation with our team today.