Why You Need to Prioritize Direct-To-Consumer Strategies Direct-to-customer strategies can grow your business exponentially.
By Dr. Lilian Ajayi-Ore Edited by Bill Schulz
Opinions expressed by Entrepreneur contributors are their own.
I recently met with Rekha Brar, a successful small retail business owner who created Blossom Box and launched a second online store, Gilded Halo, during the pandemic. Her jewelry stores have seen a sell-through rate of close to 90% and her overall growth is close to 50%, year after year. Her focus has been on a direct-to-consumer model which accounts for 75% of total sales revenue. We discussed several reasons why her strategy sells.
Related: 4 Key Strategies Small Retailers Need for a Healthy Business
Maintain marketing budgets
When small retail brands set up their business, a lot of capital is set aside for product development, hiring employees, freelancers, etc. But little attention is focused on ensuring that a budget is also set aside for managing your marketing. One piece of advice for smaller brands, that are already generating revenue, is to establish a percentage amount you plan to reinvest in getting the word out there. Be sure to decide on a percentage that does not castrate your business and prevents you from making other decisions on where else is vital to spend.
Rekha invests between 5% to 7% of her revenue in the marketing budget, because it is a great way to attract eyes and grow your business independent of the larger retailers.
Channel surf
Rekha understands where her customers spend most of their time online and spends her marketing budget targeting them on those channels. Small retail brands should also allow themselves sufficient time to run three tests on the selected channels. The first test can occur in the first 30 days to the last 90 days of the advertising campaign's go-live date. When you test for a more extended period, you benefit from collecting historical data to continue making conscious decisions about performance against specific channels. You can also adjust your marketing spend accordingly based on overall performance.
Stay customer savvy
Rekha reads her online comments and makes adjustments where necessary. Patrons are delighted to know that their feedback created value for the brand, improved their business practices and increased customer satisfaction. This process is also a great way to find gaps in your business and to know where you are not meeting the needs of your clientele. Reading their comments gives you a chance to respond accordingly and improve your practices. At the beginning of starting Amazon, Jeff Bezos, incorporated user feedback into his business practices and still reviews customer emails to this day.
Related: Apparel Manufacturing Saviours
Extend your style collections
Rekha formed partnerships with discount retailers to move unsold units into their stores at a discounted price. That discounted price does not mean that it is not profitable, it just means that she is not at the higher index of where she should have preferred to sell her units. The advantage of extending your style collection is that you eliminate designs that do not work and allow customers to wait on a list for out-of-stock and in-demand items. This process also helps you determine your "top sellers" and your "slow sellers," but be sure to consider any seasonality factors that can affect your product's performance.
Search for a searching solution
The final step is to invest in improving your Search Engine Marketing and Search Engine Optimization strategy. SEM is your search engine optimization, allowing search engines to list your website. The more optimized your site by keywords, the greater the chances your rankings will improve. You are paying for specific keywords and your ads will appear when those terms are on the engines. Should the campaign meet specific criteria, your ads will appear for those keywords. If you are unfamiliar with how to set up your meta tags, invest in the right technology tools like SEOMoz or SEO Yoast to improve your meta tags and help you monitor the growth of your keywords search rankings. A well-optimized site will boost search engine rankings and organic search traffic to your eCommerce site. This also means that customers interested in your products and services can find you more quickly.
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