Covid19 will be forever changing retail, and with increasingly more people confined to their homes, there has been a surge of interest for companies to switch to online. Opening of new revenue streams, the reaching of new consumers and affordable marketing strategies are only some of the benefits going online offers young companies during this time.
Many companies have already taken advantage of changing consumer habits, plant-based meat startup The Meatless Co realized their consumers were actively reassessing their health and how they can now positively impact the environment post pandemic, and launched a d2c channel solely to cater for this expected demand.
As startups rethink their business models and find new and innovative ways to pivot quickly and efficiently to meet new consumer demands, the new online boom has even the biggest names in retail rethinking their operations; Amazon, the warehouse and delivery juggernaut, announced plans to take on 100,000 new workers as they struggle to keep up with demand. Fear of the unknown has sparked a desire in people to stock up and empty shelves, and with large retailers struggling, it’s the perfect time for smaller businesses to step in.
New to the e-commerce space? Don’t worry, at Food Entrepreneurs we have got you sorted and have pooled together a list of tips and tools you need to flick the online switch:
Shopify is the No.1 eCommerce platform for all businesses
1. Choose your e-commerce business model wisely
We all know social distancing is key to fighting the coronavirus, and so is offering new delivery and pickup options for your customers. With a plethora of different models out there, which one is best for your company? BOPIS i.e. Buy online, pickup in-store model is just one of the options to choose from for your online store, which allows customers to buy products online and get the items picked up from location while avoiding contact.
Brakes has gone so far as to set up a dedicated webpage for its new customer-facing ‘Food Shop’ service – only accepting orders via “call and collect”, in which customers place an order over the phone and then drive to one of its depots to collect the order. It also requires them to download and follow a specific set of instructions for each depot.
You might be running a marketplace, with multiple vendors registered to it. Each vendor sells a specific category of items on your marketplace, either digital or physical that need to be shipped. Running a Multi-vendor Marketplace? Opt for Store Pick up via Shopify for your customers to avoid in-person contact, which also allows you to avoid shipping costs. As the global supply chain relies more heavily on the proper management of logistics to ship the items to the destination, your order management process may suffer.
As smaller and more specialized companies enter the D2C space, they need to ensure their logistics are cost-effective and their D2C model is profitable. “The biggest challenge when you do DTC as a snack company is whether there is enough margin in the box that allows the seller to pay for the delivery…I’ll be in trouble if you order three bags of potato chips online, and I spend $7 for the shipping fee.” Jim Tompkins the CEO of Tompkins International, which helps direct-to-consumer companies reinvent digital commerce and supply chain.
Undoubtedly, COVID-19 is affecting many online businesses, but you have to understand the current scenario and online shopping behavior of your customers. Identifying emerging consumer behavior will help you understand their needs and cater to them in a better way. Priorities are changed now. For example, instead of focusing on selling luxury items, you can sell subscription-based products that will be extremely helpful for the people in the lockdown situation. If you have an Odoo store, check the Odoo Website Subscription Management plugin.
Bar-chain Brewdog has gotten creative with its latest virtual offering
2. Foster a community
Now more than ever companies are looking to connect with their consumers and D2C companies have significant opportunities to bridge the relationship gap between brand and user. How can we demonstrate that our products can show up and support people through these uncertain times? Take a leaf out of online drinks startup Minna, that is demonstrating their ethical foundations by donating a portion of their online sales to organizations working tirelessly amid covid.
Even grocery stores are exploring disruptive ways to support their customers. USA-based supermarket Giant Food is launching weekly classes to promote a healthy lifestyle and to provide a preventative step for people to take while non-urgent healthcare visits are on hold. The classes will cover topics like heart-healthy eating and weight and disease management. With people stuck at home with little to do now is the perfect time to get creative. UK-based bar chain Brewdog recently launched a free beer delivery service via their app, to be enjoyed during their online virtual bar the BrewDog Open Arms.
We hosted D2C pioneer Cortilia in our latest webinar
3. Learn from startups
If covid19 has taught us anything it’s that startups have once again demonstrated their ability to remain flexible and pivot quickly and efficiently to adapt to this new era. Our partner company Eatable Adventures has just launched a new series of webinars, their first episode last Thursday “The rise of D2C Food startups” hosted a number of important agents from the D2C world including Emna Neifar, Chief Commercial Officer at Cortilia and Ivan Farnet, Founding Partner at Five Seasons Ventures, where they came together to share their visions and opinions with José Luis Cabañero, CEO of Eatable Adventures on the present and the future of the D2C model and the fundamental role that food startups play in its propagation. Check out the video here.
Dinemarket is launching D2C online marketplace amid covid
4. Pivot, pivot, pivot
With people stuck indoors, consumer habits are bound to change. A recent study by Nielsen found that “pandemic pantries” have led to a spike in sales for some surprising consumer packaged goods (CPGs), such as a 305% increase in sales of oat milk. Products with longer shelf lives are easier to stockpile, and are therefore top of people’s shopping lists.
One trend we have seen emerge from this crisis are startups that once connected restaurants with food supply companies pivoting into direct consumers sales. DineMarket is the latest entrant we’ve come across in this category: the company launched its own D2C marketplace earlier this month. It’s not hard to see why so many restaurant-supplier services are making the consumer transition, it’s a win-win. Suppliers take the heat off exhausted retailers and open up a new revenue stream for themselves.
Wholesalers are another agent in the food industry changing up its business model; allowing them to gather important customer data that continues to be valuable even after the crisis. UK-based retailer The Sausage Man is a prime example of how to sell D2C as a wholesaler; the company has set up a dedicated online marketplace available 24/a day and offers reward systems and e-gift vouchers. Check out the best e-commerce platforms for wholesalers here.
Social media engagement numbers spike during crisis
5. Take advantage of social media
According to a Statista survey of social media users back in March, 43.1% of participants said that if isolating in their homes during COVID, they would use Instagram more during that period. With more people confined to their homes, there will be a spike in users logging in, tweeting, liking and discovering new brands; the perfect time to re-think your social media strategy, and if you don’t have one, what better time to start. D2C marketing strategies have taken on a whole new dimension thanks to social media.
According to a report by Talkwalker, shoppers are using social media more than ever to share their grocery delivery experiences with other shoppers. Although grocery companies are notorious for avoiding social media, more now than ever their presence is palpable. The Giant Company recently turned to social media to encourage shoppers to stop panic purchasing.
Social media tools: Taggbox ecommerce, Google Analytics, Hootsuite, Sprout Social