Carina McLeod of Ecommerce Nurse: What Brands Need To Know To Build a Healthy D2C Strategy

“Long term, definitely, you want to be able to get to that point of direct to consumer because of the wealth of data that you get … [and] that control as well … And you can see many brands out there are all testing the water, so you don't want to be the last one either.” — Carina McLeod, CEO and Founder, Ecommerce Nurse

With brands facing pressure to squeeze more profitability out of their ecommerce sales, direct-to-consumer (D2C) is starting to look pretty appealing.

Margins have the potential to improve when selling D2C, and brands can collect more consumer data, too. However, there are tradeoffs in the form of greater resource investments and the need to build new infrastructure.

Carina McLeod, CEO and founder of eCommerce Nurse Limited, frequently helps brands prepare for D2C success. In the “Unpacking the Digital Shelf” episode “A Health Checkup for DTC,” she gives a thorough explanation of what brands should know before launching their D2C strategy.

Here are some of McLeod’s insights on how to ensure D2C health.

When Is It Time To Move to D2C?

McLeod believes that most brands should explore the potential of D2C and consider whether it’s right for them. “Long term, it is becoming an area that most brands need to understand and play in,” she says.

But, she continues, “It's a gradual stage, going direct to consumer because a lot of brands that we speak with are still going through basic digital transformation … We see that as stage one, just being able to really sell your products [online].” Only when a brand has excellent product page content and an effective digital shelf strategy should it start thinking about D2C, McLeod says. 

For that reason, McLeod says that in her conversations with clients, “there's a lot of that key question of, do we stay wholesale or do we go to marketplace? A lot boils down to infrastructure and resources.” 

After examining the infrastructure and resources they have in place, some of her clients ultimately decide that it’s better for their brand to remain wholesale for the time being.

That being said, “long term, definitely, you want to be able to get to that point of direct to consumer because of the wealth of data that you get … [and] that control as well … And you can see many brands out there are all testing the water, so you don't want to be the last one either.”

For brands that decide to tackle D2C, the next step is to expand their knowledge base so they can develop a successful D2C strategy. Understanding factors like managing digital sales, forecasting inventory, leveraging data, and more all require overcoming a learning curve when adjusting to D2C.

Closing the D2C Knowledge Gap

Launching an effective D2C strategy starts with developing new skills and processes within the organization, such as forecasting, inventory management, and customer experience.

Data can help with this, and selling D2C means brands will obtain more data about customer behavior and desires. But that wealth of data brings its own learning curve, as McLeod says she sees “a bit of data paralysis with a lot of brands, as in, they've got access to all of this [data], but they don't know what they're necessarily doing with it.”

The brands she works with typically bring in agency or consultant support to develop their data management skills and other capabilities they need for D2C success. “A lot of these skills are new,” she says. “The knowledge is new. And so it is definitely a big challenge for brands, especially larger brands, to really get set up for success there.”

Even when knowledge areas aren’t new, they often require a mindset adjustment. McLeod uses the differences in D2C sales to illustrate this. “The sales team for digital is more focused on the marketing [and] is focused on the content in terms of the product pages and how to make those product pages get traffic and convert … Whereas a lot of brands that are used to wholesale are used to managing those more B2B relationships, and [are] more on the road.”

She continues, “When we see the real turning point of success is when the teams then realize that it requires different resources or a different mindset to manage the digital side than it does to manage that wholesale side.” Embracing that difference and growth leads to a more successful D2C strategy.

The prospect of overcoming this skills gap may sound overwhelming, but it doesn’t need to happen all at once. McLeod advocates for scaling up on D2C skills gradually.

“When we see the real turning point of success is when the teams then realize that it requires different resources or a different mindset to manage the digital side than it does to manage that wholesale side.” — Carina McLeod

Testing and Learning on Marketplaces

McLeod advises that brands take a “test and learn” approach to D2C so they can build up their experience over time.

“It's trying a marketplace; it's not full on creating your own website … It’s just trying to get a bit of an understanding of the infrastructure, being able to respond to customer questions … being able to send an inventory.”

When selling on an Amazon marketplace, for example, “You can send in larger shipments, and Amazon can do [fulfillment] on your behalf. So it's almost like a middle ground before you are having to send orders directly to the customer … but you're still getting used to managing your own inventory and being able to forecast.” 

So selling on digital marketplaces is a great way for brands that are new to D2C to gradually expand their capabilities, build up their experiences, and gather the data they need to grow.

As a bonus, selling on marketplaces makes it easier for brands to try out new products or product bundles. “A lot of the time, if you are working wholesale … you've already got set products that have already got momentum. So trying to … launch a new product in that way isn't so easy. But with a marketplace, you can easily just set up your own product, send in inventory, and you're testing it straight away. So it enables you to really play.”

Whether a brand chooses to remain on retailer marketplaces over the long term or eventually move to an owned D2C site, this approach of gradual experimentation can help them develop the skills and knowledge they need for true D2C health.

Develop a Healthy D2C Strategy

Moving to D2C is important for brands that want to lead in their space, especially as demand for profits increases. But that doesn’t mean you need to rush into it.

By evaluating your resources, growing your expertise, and trying out D2C in a gradual, measured approach, you can build the foundation you need for long-term D2C health.

For more insights on how to build your D2C strategy, listen to the full episode.