DTC (Direct to Consumer) strategy is facing the most severe test in businesses throughout the UK, with London being a particular focus as the coronavirus knocks on its door again. Whilst the north of the country takes the brunt of restrictions, the capital, according to word on the street, lies not far behind.
As any PESTLE analyst will instruct you, you have to take account of the political and societal factors – the P&S in this useful acronym – in designing strategy.

“Keep calm and carry on!”, as the saying goes: it’s a Brit’s approach designed to introduce a degree of lightheartedness in what is clearly a serious situation with no certain end in sight.

Leaving circumstances to luck is a flawed policy in such circumstances. Fortunately, today’s professional marketers– unlike the scientists and politicians who have to make decisions around how to deal with a new virus and handle an economically devastating pandemic – have far more knowns on which to build workable sales strategies which can help take maximum advantage of the sales opportunity represented by the upcoming 2020 Christmas holiday period.

In previous years this has represented the single most valuable business period in the calendar. However, with the current situation so uncertain, realistically the HORECA sector is very unlikely to see anything like the same business opportunities as Christmas 2019. Even the pressures were there to be seen:up 4.1% overall nationally on 2018, but just 0.1% in the pubs' sector, so direct to consumer (DTC, sometimes also written as D2C) and what it represents as a sales opportunity becomes an even more vital tool in the marketer’s armoury.

Whilst DTC is indeed one possible solution – and has been something of a saviour for a number of drinks companies during the current pandemic, what with the effects the virus has reaped on a whole sales channel – to be successful it requires a number of factors to be taken into consideration.

It’s certainly not something to be done half-heartedly or as a one-size-fits-all solution. The start point, as always, with quality products and great service as a given, is to put a solid marketing strategy in place.

• Selling alcohol, whatever the channel used, adds a number of special requirements: businesses, organisations and individuals who want to sell or supply alcohol in the UK must have a licence or other authorisation from a licensing authority and understanding the stringent rules and regulations that apply are completely necessary – ignorance is no defence.

• London, the capital city, centre of wealth creation and fulcrum of society has seen a significant change as workers have realised the benefit of working from home and the leafier suburbs. Urban bricks and mortar hospitality might be suffering, but that doesn’t mean to say that these same distant consumers won’t want your DTC offer shopping remotely.

• As to Christmas 2020, whilst many will talk down the economy and the opportunity, it’s actually those that can look adversity in the eye and identify what consumers are looking for that will define the winners.

- Alcohol is an affordable luxury and, whilst many big-ticket items will be left on the shelf or in the garage, those with remaining disposable income can (and will) afford a drink.

- Whilst the latest unemployment figures that have been reported (August 2020)have risen to 4.5%, this still means that 95.5% of the workforce is working and earning – so I’d say it doesn’t make commercial sense to join the doom and gloom merchants. 

- It’s far more to do with defining your product and pricing bearing in mind these background factors, remembering that value still has to be retained by all – consumers, your business and suppliers.

• With DTC part of e-commerce sales that are forecast to reach $4.1trillion (that’s 4 followed by 12 noughts) by 2021 (source: Statistica), it’s important to choose the right e-commerce software solution. Google will throw up any number of names, of which Woocommerce, Magento, Shopify and Core DNA are leading contenders for your attention – and choosing the right one for your business can make or break. 

• Particularly so as e-commerce is no longer just about browsing for items on a smartphone, tablet or laptop, and adding purchases to the shopping cart and checking out with a payment card. Today it’s all about convenience and what omnichannel experiences can bring, involving researching products on social media channels and YouTube, with the entire journey personalised for the visitor.

Also read, Building An E-commerce Strategy

• So you need to look for an e-commerce platform that’s both affordable and low maintenance, scalable, secure and easy-to-use and which provides multiple payment options, as well as allowing for omnichannel delivery.

• Then there’s how you’re going to communicate with your DTC audience. A DTC site needs engaging content, good(better still, great) imagery, and well-written and winning-copy, especially when it comes to descriptions about your product. 

• Key to any DTC plan is to know as much as possible about your audience (DTC can itself be used as a marketing intelligence tool) – who they are, what they bought, and, ideally, how they interact with your brand so you can optimise your market positioning and your pitch and make that sale. Knowing your audience allows for segmentation and the ability to provide a degree of personalisation to any approach. There’s plenty of evidence around to show that online consumers get frustrated with a website that doesn’t provide content that is specifically tailored to them.

• ‘Nuts and bolts’ issues are how you’re going to support direct orders: depending on the size and setup of your business this might very well involve working with a 3rd party logistics company to store the product, then get it selected, packed, labelled and shipped.

• Size doesn’t mean that you can’t work with big distributors. SEO optimisation can be a long-drawn-out process, especially in the highly competitive alcohol marketplace, and it can be a real struggle to gain visibility and traffic. So working in parallel with the likes of Google and Amazon as sales channels can be a viable route to market (there are a number of caveats here in selling alcohol through these channels – all necessary licences will be minutely scrutinised). 

• Some products require more of a hand-sell and may not be suitable for DTC, so that will have an effect on the range/product line you sell. If there are to be limitations, you’ll need to set out those limitations at the outset, whether that’s by product type and/or by price segmentation.

Also read, What Wineries Can Do To Protect And Promote Themselves Through These Times

• DTC allows you to offer a subscription service and to set up a loyalty reward programme with all the benefits that can result in terms of deepening the seller/buyer relationship, developing an on-going dialogue – made all the more interesting by including special offers – which can help cement loyalty in the longer term.

• Notwithstanding the crash that is the current on-trade sales channel, DTC needs to be handled sensitively when it comes to other sales channels. Rather than being seen potentially as ‘channel conflict’, it should be viewed (and handled) as an opportunity to create a new sales channel going forward, and not to damage previous trade relationships – we have to believe that the scientists will find an antidote to this damned virus and previous sales channels will pick up again in the not too distant future! 

• These points are more than generalisations, based as they are on decades of drinks marketing experience. As far as making sales in London: in 2019 London accounted for 23% of the whole UK economy, some 18 million potential customers (the population of London and the south-east), with earnings two thirds higher than the rest of the country – it’s where opportunity lies and DTC has the potential to deliver.

About The Author

The article is contributed by Alistair Morrell a Wine Inspector, wine industry consultant, journalist and, commentator. Over 30 years as a wine business professional, Alistair shares his global knowledge, network, and experience of growers, importers, distributors and buyers.