Nov 19, 20183 min read

The Direct-to-consumer model: What retailers can learn.

by Klarna.com

The latest trends in retail innovation focus on one big idea: staying in tune with consumer expectations. No one does it better than direct-to-consumer brands. These retailers are pros at creating custom experiences that meet their customers’ changing needs and habits.

E-comm giants can take a page from the direct-to-consumer model’s playbook. Here’s a look at how to delight consumers and make payments smoooth for big growth in a fast-changing industry.


The rise of the Direct-to-consumer model

Home goods, jewellery, eyewear, sporting goods, furniture, electronics, health, clothing — you name it, and there’s probably a direct-to-consumer brand for it. Big names, like Warby Parker, are the innovators everyone looks to. But you’ve probably also heard of brands like Bucketfeet and Sleep Eve. What’s behind their success?

Unlike the traditional retail model, direct-to-consumer eliminates the middleman, bringing an entire business under one roof. Design, production, and marketing through to payments, distribution, and sales are all managed by one company.

This shift empowers brands by giving them control over the entire shopping journey. Retailers manage every detail — from product design to checkout experience — for a more-streamlined sales cycle.

Keeping everything in-house also means more access to invaluable customer data. That data helps retailers get to know customers better, and those insights lead to tailored products and services that meet market demand.

Brands that control the entire e-commerce experience – from the time a consumer visits a site to when a product shows up at their door — unlock valuable insights into how people prefer to shop and pay.

How direct-to-consumer brands are closing the deal at checkout

The direct-to-consumer model is anything but traditional, and that extends to the checkout experience.

Consumers like options, including flexible ways to pay online. Industry research found that the best checkout experiences offer customers 7+ payment options. Consumers are drawn to retailers with alternative payment methods that allow them to dictate how and when they pay. Whether it’s through a digital payment method or a flexible financing option, choice empowers shoppers to be in control of their journey.

Big brands can replicate the success of the direct-to-consumer model at checkout by integrating new payment solutions. For big-ticket purchases, instant financing makes it easier for consumers to add to cart. It’s quick and simple to get approved for credit, empowering shoppers to buy more now and pay down purchases month to month.

Want to make shoppers exceptionally happy? Take the try before you buy option for a spin. Customers have the chance to receive a product, test it out, and decide if they want to keep it — and then pay for it. If not, they get to send it back at no cost. It’s the ultimate in flexibility that solves one of the conundrums of online e-commerce — being able to experience a product just like in the store.

Checkout is one more place where you can offer custom experiences just like direct-to-consumer brands. And when you do that, customers know it, love it, and, best of all, will stay loyal to you.