The Logistics of Logistics 5 Keys to Direct to Consumer (DTC) Success with AJ Khanijow
AJ Khanijow and Joe Lynch discuss the 5 keys to direct to consumer success. As the founder of an e-commerce fulfillment company, AJ works closely with direct to consumer companies and he has helped his clients avoid the many pitfalls.
About AJ KhanijowAJ Khanijow is the founder of Fulfyld, a warehousing and fulfillment company based in Huntsville, Alabama. AJ and his team at Fulfyld specialize in e-commerce fulfillment. Prior to founding Fulfyld, AJ held business development and leadership positions in the manufacturing, technology, packaging, and consulting industries. AJ earned an industrial engineering degree from Auburn University.
About FulfyldFulfyld is an e-commerce fulfillment and warehousing company based in Huntsville, Alabama. Fulfyld's unique service offering includes the technology and customer service required by direct to consumer brands along with deep expertise in value-added services, product sourcing, and packaging that enables them to become an extension of their customer's supply chain. Customers range from local to global companies, each with unique e-commerce fulfillment needs. Fulfyld integrates directly with e-commerce marketplaces and shopping carts to simplify your shipping process. Fulfyld ships same-day, every day, for one flat-rate.
Key Takeaways: 5 Keys to Direct to Consumer (DTC) SuccessDirect to Consumer (DTC) Success Background
- Most DTC brands included above have a few things in common:
- They sell mainly physical goods as opposed to services like home cleaning or music streaming.
- They are mostly vertical brands, meaning they produce and distribute their own physical goods, rather than acting as marketplaces that sell many brands.
- Many DTC firms have backed by venture capital at some stage(s).
- They have smaller product catalogs than traditional retailers.
- They avoid mainstream manufacturing.
- They appeal to younger generations by evidencing their ethical supply chains and using their brand's story to connect with their audience.
- The DTC e-commerce revolution is still pretty new, with e-commerce still only representing about 10% of retail sales in the U.S., according to the U.S. Department of Commerce. During the pandemic, e-commerce sales surged, and it may result in permanently higher sales for the e-commerce sector.
- The ten top DTC advertisers: SmileDirectClub, DoorDash, 23andMe, Poshmark, UNTUCKit, Touch of Modern, Hims, Casper Sleep, Stitch Fix, ThirdLove,
AJ Khanijow's 5 Keys to Direct to Consumer (DTC) Success
- Develop a Great Brand. A company's brand is it's promise to its customers. The brand tells them what they can expect from the company's products and services, and it differentiates the company from its competitors'. While some DTC companies skimp on branding in the start-up phase, the best DTC companies develop strong brands.
- Create a Memorable Customer Experience. Whether they are buying online or retail, customers increasingly expect a great experience. The best DTC businesses have learned to create a great consumer experience. DTC brands can most effectively build relationships with consistent yet personalized communications, delivered throughout the customer's lifecycle.
- Data, Data, Data. Every DTC firm recognizes the value of customer and marketing data. In AJ's experience, many DTC firms struggle to develop good supply chain analytics. As a result, some DTC brands struggle with sales forecasting and product shortages.
- Prepare to Sell on Every Channel. Many of the successful direct to consumer businesses have begun selling in traditional retail stores. While this may seem counter-intuitive, the businesses are responding to the needs of the consumer. Conversely, older brands (pre-DTC) are beginning to adopt DTC offerings. The bottom line, companies need to offer their products on the channels where consumers want to buy.
- Select the Right Fulfillment Partner. Hiring the right e-commerce fulfillment company is key because that fulfillment partner could be the difference between success and failure. The fulfillment partner can greatly impact customer satisfaction because they own the order fulfillment process (order processing, pick and pack, shipping, documentation, delivery, and if necessary, returns). Fulfillment is just the starting point. DTC brands often need expertise and service beyond warehousing, fulfillment, and distribution. The right fulfillment partner should be capable of providing whatever value-added service is needed for the brand to succeed and grow. Look for a company that can assist with the following services: procurement, sourcing, manufacturing, and fabrication, assembly, and packaging.
Selecting an E-commerce Fulfillment Partner with AJ Khanijow
The Logistics of Logistics Podcast- If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues.
- The Logistics of Logistics Podcast: Google, Apple, Castbox, Spotify, Stitcher, PlayerFM, Tunein, Podbean, Owltail, Libsyn, Overcast