Our Analysts' Insights

Consumer and digital marketers have so much to deliver that it often looks as if they’re trying to balance multiple spinning plates in the air. One of the trending initiatives that they must integrate into their strategies is the option of direct-to-consumer (DTC), in which their organizations revert to marketing, selling, and supporting individuals – rather than filtering them through third-party marketplaces such as Alibaba, Amazon, or Rakuten. This is a major shift for many medium- to large-sized firms, with the global customer journey oftentimes not receiving as much attention as it should. We explore why more companies are going this route, and how localization teams can help their marketing colleagues do a better job of reaching international audiences as they do so.

Why Are Companies Bypassing Intermediaries to Reengage Directly with Customers?

One of the biggest reasons for the move back to selling directly is that many people and business entities expect to have that option – even when products and services are available through other channels. Brands want to own and control everything that contributes to creating satisfied return customers and brand ambassadors.

• Own your brand experience from pre-sales onward. When selling through an intermediary, you can’t predict how your product or service is presented. It may even be lumped together with another (counterfeit) product, service, or brand that reflects negatively on your offering. Owning the customer journey means that you will control presentation, pricing, margins, shipping, delivery, returns, pre- and post-sales support – every touchpoint that allows you to build more trust and brand loyalty, rather than leaving everything up to fate with Amazon or Alibaba (“The State of Global Customer Experience”).
   
• Be in charge of your data. Data provided by third parties is often aggregated, high-level, and delayed – if you can even gain access to it. As a result, you’re blocked from being fully informed about what your customers think of you, what they view as trending, and what your next actions should be to further refine offers or tweak your product and services. Being caught unaware is a sure way to cede market share – especially with international audiences courted by savvy, nimble local competitors. Once you switch to a DTC model, you will be able to better personalize what you deliver to build greater long term loyalty, rather than leaving everything up to marketplace algorithms.
   
• Make pricing and profit margins yours. Amazon takes anywhere from 17% to 20% off the top to deliver the services they provide. It’s difficult to accurately forecast revenue if you don’t manage the beginning-to-end sales process. Shifting part or all of your model to DTC allows autonomy in this area.
   
• View DTC as a way to invest in your forthcoming customer base. Regardless of product, vertical, or current sales channels, the newest members of your audience will increasingly discover and make purchases via their phones and other devices. Getting to know them up close and personal, based on data-driven insights into their purchasing behaviors, is a critical step in building the bridge to your firm’s future.

A third-party marketplace can be an effective sales channel at the beginning for your brand – or a supplemental one. It offers a huge number of prospects and excellent logistics to support international markets that you might otherwise not have the right level of access to. Pulling out or never going the route of third-party marketplaces may not solve every issue – it depends on where prospects and customers expect to engage with a particular brand. Companies should review their own strengths and weaknesses before making such a move. For example, how strong is your customer base? Will it make up for or exceed lost revenue from the third party? What will be the fallout in terms of economics and reputation from dropping an intermediary?

How Can Localization Teams Leverage DTC to Improve Global Customer Journeys?

Localization teams have the power to assist sales, marketing, logistics and support colleagues, and other teams to do a better job of reaching international audiences as they implement a direct-to-consumer model. Here are four areas where they can offer help to ensure that DTC takes off successfully worldwide.

• Prepare your website, apps, and back-end infrastructure to handle increased traffic, sales, and post-sales requests. Make sure that all software purchased or developed internally is properly enabled for localization and that all testing from day one is based on international test cases and data. If you’re switching from a traditional retail to a customer-facing system for the first time, the process will be complex and time-consuming. Make sure that international requirements are integrated into all planning and deliverables. Collaborate with language service providers and local marketing partners and staff to offer training for other teams so that they know exactly how to design deliverables to meet international and domestic multicultural expectations.
   
• Educate marketing colleagues on what your competitors are up to in local markets. One of the biggest complaints of marketers that we field here at CSA Research is the inability to get their hands on reliable local market data. The localization team can do its part by supporting corporate and local marketing teams to constantly run A/B testing – third parties are fine for this – and by helping other colleagues to experiment with different touchpoints throughout the entire journey. For example, does the older cohort of your audience in a particular market crave human contact via phone both pre- and post-sales? Run a pilot to see if investing more money in this option will increase sell-through, decrease returns, and lead to more loyal customers who buy more from you over time.
   
• Review tone, voice, and style. Engaging in real-time, authentic, back-and-forth conversations with prospects, customers, and brand ambassadors may require tweaks or a full overhaul of your firm’s sales, marketing, delivery, and customer support content – including apps (“The ROI of Customer Engagement”). Personalization for domestic audiences may fall flat with those across the border or overseas. However, if you let customers guide you and you make genuine progress in fine-tuning what you deliver, people will notice (“The Style Guide Challenge”). Creating a scale to show which markets want to be even more engaged – and the ways in which they prefer to undertake this with brands – compared to those that expect less, can go a long way to steering corporate teams in the right direction. You may also need to consider adding additional language support to reach individuals under the new model (“What is the Value of a Language? 2019”).
   
• Communicate to domestic colleagues what it really means to “own” the customer experience – internationally. It’s not just about that first sale, but about installing the people, the processes, and all other resources required to support delivery, customer support, follow-on sales, and brand loyalty – in real time – just as you do for domestic audiences (“Pragmatic Global Content Strategy”). All of these areas may have slightly different meanings across various markets. For example, more sophisticated packaging may be expected for higher-end items among Japanese customers, while the same age group in the U.S. may prefer minimal packaging to lessen environmental impact. Secure payment types, shipping and delivery requirements, and local warehousing may also be defined differently around the world. If you’re selling direct, you own these pieces of the journey – not Amazon or Rakuten.

As you consider whether to begin selling direct to your customers, or to further enhance what you’re already doing, the choice is not either/or. It’s estimated that only 10% of product purchases are currently made online. Segment your customers and figure out where they expect to find you, as many continue to be comfortable shopping across multiple channels. Help marketing colleagues to understand what your most important local markets or domestic multicultural audiences expect, whether online or offline. These may include traditional stores and marketplaces or something a bit more current such as pop-up stores or a new partnership with a local or regional company.