03 February 2022
DTC and the benefits of a single service provider
Over the past two years, the Covid-19 pandemic has drastically changed the retail landscape. With the unprecedented disruption of business as usual and the temporary closure of physical stores across the world, brands had to quickly reassess and adapt their strategies and infrastructure to continue operating and getting their products to consumers efficiently without the support of traditional offline channels.
As a result, ecommerce surged, and more than two billion people purchased goods and services online in 2020. Rather than dying down, the digital momentum continued despite the easing of restrictions and the re-opening of physical stores. For example, between the 1st of November and the 24th of December 2021, online sales increased 11% year-on-year in the US, according to Mastercard.
DTC: challenges and opportunities to weather the storm
While the majority of brands were operating online long before the pandemic started, for many, the global shake-up brought about by Covid-19 marked a turning point, emerging as a favorable moment to assess and rethink their digital model. Where brands looked to break away from a heavy reliance on third-party resellers and online marketplaces or intermediaries, DTC offered them the opportunity to gain greater control of their operation and more ownership of the customer experience. This while providing the flexibility to scale both locally and to foreign locales efficiently.
And although DTC can be key in helping to enable growth and support a brand’s expansion, it can feel like a daunting move for some, due to the multiple business aspects — from tech infrastructure and logistics to brand building and marketing — that need to be managed and looked after.
This, in turn, means that brands are often faced with the need to work with different suppliers and solutions for all these areas — something that potentially creates a disconnect between the different parts, making it hard for a business to expand smoothly. In this sense, working with a single provider that has the ability and expertise to provide all the different components of a DTC model can help remove many of the complexities, challenges and costs associated with a multi-partner approach.
At THG Ingenuity we have helped countless brands from a range of industries accelerate their DTC journey and grow their digital operations seamlessly and flexibly with our end-to-end ecommerce solution and without the need for additional suppliers. As expert tech partners we have supported these developing brands and their customers every step of the way, from first click to last mile, and have learnt what their key concerns and requirements are when transitioning to a DTC model.
Speedy re-platforming: Cult Beauty X THG Ingenuity
Speed plays a key role when switching online business models. Many organization heads and tech leaders fear that the transition to an entirely new platform will be long-drawn and disruptive to their day-to-day operations. However, it doesn’t have to be — especially when working with partners with years of experience in platform migration who can look after the process every step of the way.
The online beauty reseller Cult Beauty, acquired by THG in August 2021, offers the perfect example of how efficient and speedy a platform migration can be, and the extent of the positive impact it can have on performance and conversions. THG Ingenuity successfully migrated Cult Beauty to its platform in 10 weeks, within just six months of acquisition. This change delivered immediate improvements to Cult Beauty’s site, including a 30% uplift in conversion rates, a 6% increase in average order values and a 36% reduction in page load times.
The speed of migration to the THG Ingenuity platform meant that Cult Beauty’s website was ready for Black Friday — a key trading period that puts ecommerce sites to the test due to a sharp increase in web traffic. Following the re-platform, the reseller was able to sell 11,500 units of its advent calendar in two hours with no website outages or disruptions — something vital not only for boosting conversions, but also for offering a positive customer experience.
Integration for success
A speedy migration and a high-performing site are two of the key factors underpinning a successful move to DTC. However, they are only a part of the overall process, and it is the ability to integrate technologies effectively into wider business functions — such as warehousing and fulfilment — that can prove make-or-break.
Over the past two years, the Covid-19 pandemic has negatively impacted supply chains and availability of labour, making the efficient fulfilment of customer orders a true challenge. That is why at THG Ingenuity we have doubled down on automation capabilities, delivering our first automated warehouse in Q3 of 2021, taking five months from ground up build to first product despatch, delivering a 40% reduction in costs to fulfil.
As the pandemic continues to transform entire industries, it is now more important than ever to build a resilient business that can thrive even as markets across the world continue to be in flux. Joining forces with the right partner, that can support your brand’s growth with state-of-the-art technology and years of digital expertise, is the first step to building a solid, future-proof brand.
Ready to accelerate your business’s digital journey? Get in touch today to learn how THG Ingenuity’s DTC end-to-end ecommerce solution can propel your brand to new markets.