The Integral Role of Customer Service in Making a D2C Model Work
Retail is officially being disrupted, and it’s consumers doing the disrupting. With more choices about what, where, and how to buy, they’re increasingly going straight to brands to get exactly what they want. Startups like Warby Parker, Everlane, Casper, Glossier, Allbirds, Birchbox, and the Honest Company have unseated top traditional brands across categories and taken a big piece of the pie from third-party retailers like Amazon and Alibaba, too. These once-scrappy direct-to-consumer (D2C or DTC) startups are quickly becoming the main retail contenders, and that’s creating more competition among brands.
Consumers aren’t just comfortable buying directly from their favorite brands online. They increasingly prefer to skip the middleman and interact directly with brands that align with their preferences, interests, and values. They’re more sophisticated about how to shop directly from the brands they love, and those brands are stepping up their efforts to serve. They’re offering a highly personalized experience across the entire customer journey. They’re building relationships in their marketing, their transactions, and, ideally, their excellent customer service.
Why customer service matters so much to D2C
“There’s still a lingering idea that DTC is innovative. That simply isn’t the case anymore…It’s about how you do it now that’s innovative.”
— Ben Lehrer, an early investor in Casper and Warby Parker
A decade ago, the idea of buying directly from a digital brand was virtually unheard of. But technology has gotten much more sophisticated. Digital-native consumers have become the prominent demographic of shoppers. And, more recently, people have been staying home versus shopping in stores. All of these things have created a surge in D2C buying. But even before the pandemic, over 80% of consumers said they planned to do a good amount of their shopping from D2C brands within the next five years.
D2C brands have the advantage of owning the entire value chain, from creating the product to selling and shipping it. Most of these brands were born digital and innately know how to speak the language of the digital consumer, from their marketing to how transactions take place. Being direct-to-consumer also means they’re in charge of their own customer service, and that’s where both the risk and potential of D2C lies.
Bonabos, a men’s apparel brand that’s a subsidiary of Walmart, boasts a distinct reason for its rampant success on its website: “Ninja Customer Service. No, seriously. We have Ninjas, and we had ’em before everyone else used the word.” Bonabos was winning customer experience awards years ago based on its commitment to ultra-responsive customer support. The brand has a 90% success rate of responding to calls within 30 minutes, a 90% success rate at getting “great” email ratings, and a below-24-hour response rate for email.
Taking ownership over customer support
Still, is a 24-hour response good enough? When Bonabos launched five years ago, it may have been. But today, consumers expect instant answers. The goal of most D2C brands is to spark customer delight, not just with their products but by solving their issues right away — not in 24 hours or even 30 minutes, but right now. It’s about building a strong relationship right in the moment where things might otherwise have gone wrong. It’s about delivering instant answers, and when an issue isn’t instantly fixable, applying real human empathy, at scale.
If you’re hoping to compete with Bonabos — and any other brand — your ability to serve customers in the moment, and in ways that appeal to their communication style, can be the real differentiator for your brand. For instance, ordering online holds a lot of convenience for the consumer, but it also tends to bring up a lot of questions. Often, those questions are repetitive and predictable. Automation is key to scalable, efficient customer service that attends to customer needs quickly. A customer service platform that combines answer bots with a strong knowledge base is the first step to empowering customers.
But automation must be combined with intelligent routing so that when customers do need to speak with live agents, it happens quickly and seamlessly, in whichever channel the customer chooses. And when those live agents come on the line, they have to be fortified with the customer’s backstory so they can jump right into problem-solving. Best practice today is a customer service platform that marries human agents with automation and AI.
Automation supports agents with various common tasks such as tracking orders and onboarding new customers. Combined with a highly usable agent dashboard, this gives human agents all the data they need to be of instant service to customers. It’s a high-touch experience, driven by low-cost automation. Digital-first customer service is an essential offering for CPGs that want to appeal to increasingly savvy customers.
The new norm for retail
Today, D2C isn’t just for scrappy startups like Warby Parker and Dollar Shave Club. (The latter was acquired by Unilever for $1B — not so scrappy anymore). Recognizing that the new wave of digital consumers wants a personal experience from even the biggest brands, they’re turning to consumers to create a tight one-to-one relationship.
D2C brands used to be the exception, but they’re quickly becoming the norm — which makes it harder and harder to stand out. It will continue to be the brands that master customer service that succeed in the D2C space and the market in general.