Navigating Legal and Regulatory Challenges in the World of DTC ECommerce
Learn about legal and regulatory considerations for eCommerce businesses with this in-depth guide for brands and eCommerce orgs for a smooth customer experience.
The client, a US-headquartered company pseudonymized as Consumer Products Co (CPC), came to 2 Visions with only a limited track record of selling direct to consumer online with a few stalled attempts and whiffs at-bat. While they had success in international wholesale and retail distribution, they feared that internet sales, and the profits promised in selling direct to consumer, would need to be more than just a side hustle and instead serve as a concrete strategy for long term survival. Furthermore, it was clear the competition had found success and gained traction while CPC was still contemplating competing for direct-to-consumer sales.
C. Yates JarviS
Principal, 2 Visions
What most clients like Consumer Products Co share in common are a very limited understanding of the breadth and depth of investment required to gain a DTC or D2C capability. This is a double-sided error because it also limits their confidence in a vision of compelling returns. Without this vision, companies that could sell directly to consumers treat the opportunity (or threat) as an experiment instead of a requirement for future survival. This allows confusion in strategic prioritization which diffuses the investment required to succeed.
In fact, most companies like CPC don’t view direct-to-consumer as a capability to build at all. Instead, many companies that manufacture or design their products right now see direct to consumer just as a distribution channel with simple levers to switch on and off. They view the technology piece as perhaps the largest hurdle to hop.
Having worked with hundreds of these companies, we’ve seen the full spectrum of mixed expectations and questions:
“We have already proven that our products are solid, the price is right, and people like it. So now we need to just turn this on online and get going. How long does it take to turn on our own store?”
“I’ve heard it takes more than just throwing up a website, I know it’ll take advertising too. How much do we need to budget to advertise?”
“Will we need someone internally to help with this at all?”
For those who have built and sustained successful direct-to-consumer sales for product brands, you can see very quickly in the quotes above the lack of visibility that these clients have into the true requirements to succeed.
Through in-depth consultation, 2 Visions helped Consumer Products Co to:
The developing of the strategy and capability itself is the result of much of our work; this is a precious resource and competitive advantage for our clients. However, in many instances such as this case with Consumer Products Co, we continue with our clients to help assure performance towards the direct-to-consumer targets. For CPC, this equaled:
- Sustaining monthly revenues in excess of $1MM annually for Phase 1
- Sustaining monthly KPIs in excess of $5MM annually for Phase 2
- Sustaining monthly gross and net profit KPIs
In addition to helping the client hit their targets, part of our work at 2 Visions is assisting with cost reduction. We do this primarily in the strategic planning stages and for CPC were able to save in excess of $3MM over 36 months. Furthermore, we expeditiously helped introduce CPC to the right technology, agency, and freelance talent required to execute to plan. This included maximizing contract terms with vendors and 3rd parties via full-service contract negotiation for talent acquisition, technology platforms, creative agencies, etc.
Our work is a holistic set of services all bent towards assisting our clients in achieving a competitive advantage through sustainable capability creation. For CPC this included work such as:
Learn about legal and regulatory considerations for eCommerce businesses with this in-depth guide for brands and eCommerce orgs for a smooth customer experience.
Providing the best customer experience for eCommerce is essential for every DTC online store. Here are some expert tips to help you amplify ecommerce results and drive growth through the implementation of great customer service experiences.