What is D2C (direct-to-consumer)?

D2C (direct-to-consumer; also written DTC) is an ecommerce business model where a merchant produces their own products or services and sells them directly to consumers. This differs from other business models, where third-party retailers or wholesalers can be used. Because businesses have a direct line to customers with the D2C model, direct-to-consumer brands typically have more control over their customer journey than traditional retailers, resulting in a more seamless and cohesive customer experience. Today, the D2C model is becoming increasingly popular among online stores looking to boost brand loyalty and customer retention.

Advantages for direct-to-consumer brands

With this business model, D2C brands have full control over the customer experience, including brand positioning, brand identity, product design, digital marketing, supply chain and shipping logistics, and more. What’s more, they also have direct access to customer data and feedback, allowing them to more effectively track product performance, customer satisfaction, and key metrics over time. Because of this, D2C brands have the potential to deliver a superior customer experience to traditional brands, as they have control over their entire process and can easily shift and adjust their offerings to suit their target audience.

What is v-commerce?

V-commerce, or virtual commerce, is an ecommerce term that has a variety of possible definitions. It often refers to the buying and selling of goods and services with the help of virtual and augmented reality technology. Examples of this include augmented reality applications like virtual reality fitting rooms, shopping online via voice technology or voice assistants, and visiting “virtual stores” with the help of a smartphone or VR glasses. 

Alternatively, this term is sometimes used interchangeably with ecommerce. Some companies also use the term specifically to reference voice-powered commerce, or the buying and selling of goods and services via vocal commands on a compatible device. 

Voice assistant technology and online shopping

Voice assistant technology continues to grow smarter and more flexible. Natural language processing (NLP) and natural language understanding (NLU) allow virtual assistants to get smarter and smarter as they learn to accurately deduce what users want without getting stuck on how they say it. In other words, a voice assistant will be able to infer that asking, “Is it nice out?” means you’re interested in your local weather information. 

Online shopping through an artificial intelligence–powered smart speaker like Google Home or Amazon Alexa is growing in popularity with consumers and retailers as more and more homes become populated with voice assistant devices. 

For example, in the smart homes of the near future, shoppers could ask their voice assistant to buy more coffee from their favorite brand, seamlessly purchasing from the business’ virtual store and avoiding a need for a traditional retail trip to the store entirely.

What is subscription commerce?

Subscription commerce is a business model where businesses offer products and services on a recurring basis. Subscription services and businesses can include SaaS companies, subscription box companies like meal kits and pet food companies, streaming services, recurring memberships, and more. Subscription commerce revenue is frequently calculated in terms of monthly recurring revenue (MRR) and/or annual recurring revenue (ARR).

Why do consumers love subscriptions? 

Subscriptions offer a multitude of benefits for both consumers and businesses. From a user experience perspective, customers benefit from its convenience, as they only have to input their payment information upon signup to receive recurring deliveries of their desired products or access to certain services. Often, subscription products and services also offer subscribers a discount for their repeat purchases (“subscribe-and-save”), as well. 

How do businesses benefit from the subscription business model?

For brands, subscriptions create a dependable source of revenue that recurs on a set cadence. This not only makes forecasting revenue easier, but also streamlines ecommerce processes like inventory management. Additionally, subscriptions have the potential to increase average order value and customer lifetime value across verticals and categories, as we found in our latest State of Subscription Commerce report. Particularly when coupled with customizable product offerings like cross-sells and upsells, as well as flexible checkout and delivery options like skipping an order or swapping products, subscription model businesses can improve customer retention and loyalty, reduce churn rate, and optimize the overall customer experience.

What is click and mortar?

Click and mortar (also known as bricks and clicks, or the omnichannel business model) is a business model that combines both online and offline commerce experiences. For example, businesses in this category might enable customers to shop in both a brick and mortar retail store and via an ecommerce store. This integrated business model enables businesses to reach a wider group of customers while allowing customers the flexibility to shop and browse products using a variety of methods, independent of location. Because this model has so many benefits for both consumers and merchants, more and more retailers are employing the approach, from small business owners to large retail chains.

Benefits of the click and mortar business model

Transitioning to this business model can benefit both ecommerce and brick and mortar retailers. For ecommerce companies, adding a physical storefront can reduce digital marketing expenses and shipping costs while driving traffic to both their website and physical storefronts. For brick and mortar stores, integrating ecommerce strategies into the overall business strategy allows for the automation of certain business operations, such as customer service and inventory management. This model can also provide retail stores greater insight into consumer information and shopping data, influencing marketing strategies and allowing for more personalized approaches to the shopping experience both on their website and via their physical store.

What is omnichannel retail strategy?

An omnichannel retail strategy enables click and mortar business to seamlessly combine online and offline operations. This can include shopping for products in a physical store, browsing on mobile applications, and browsing on a website. The deeper the integration is among these various channels, the more seamless the customer experience will be, helping foster brand loyalty, boost retail sales, brand awareness, and more.

What is mobile commerce (m-commerce)?

Mobile commerce (also referred to as m-commerce or mcommerce) involves the buying and selling of goods and services via wireless handheld devices such as mobile phones and tablets. This can include financial services such as mobile banking and mobile payments, retail sales, and more. It can take place via a web browser on a mobile device or via a mobile app (also known as app commerce). Mobile commerce sales continue to grow steadily as content delivery over mobile devices becomes increasingly fast and secure. 

What are the benefits of m-commerce for customers and businesses?

This type of ecommerce offers enormous flexibility and convenience to the customer shopping experience, enabling shoppers to make online purchases without logging on to a desktop computer. For example, mobile device users can make purchases while scrolling through social media platforms, book appointments online, or utilize mobile wallets like ApplePay from a smartphone to easily make payments from a connected bank account on the go. Offering mobile commerce services also creates advantages for brands, improving customer retention and conversions by meeting customers where they are.

What is direct-to-consumer (DTC)?

Direct-to-consumer (DTC or D2C) is a ecommerce business model where products or services are sold directly to end customers, without the use of third-party retailers or wholesalers. This model allows direct-to-consumer brands more control and customization over the customer journey, creating a more seamless customer experience. 

Benefits of the DTC business model for brands and customers

By eliminating the middlemen, DTC companies can both optimize the customer experience and boost profit margins, maximizing customer lifetime value. With more control over the consumer journey and overall purchasing experience, your brand can offer customers flexibility in the form of cross-sells and upsells, and use strategies like A/B testing to determine optimal pricing for your customer base. DTC businesses also have full control over their branding, allowing them to properly set customer expectations on product detail pages and across their sites.

What is ecommerce?

Ecommerce (electronic commerce; also known as internet commerce or e-commerce) refers to any commercial transaction that takes place electronically via the internet. These transactions can include the buying and selling of physical products and services, as well as digital products and services. Ecommerce business models are often organized into the following categories:

Many merchants will use an ecommerce platform, such as Shopify or BigCommerce, to manage some or all of their ecommerce experience, including their website, domain name, checkout experiences, inventory management, credit card processing, and customer service. Alternatively, businesses can reap the benefits of headless commerce architecture, which allows for greater customization. 

What are the benefits of the ecommerce business model?

A major benefit of the ecommerce business model is its convenience and flexibility for both merchants and shoppers. Customers can shop for goods and services independently of geographical location and make purchases much more quickly without visiting a brick and mortar store. Ecommerce provides scalability, enabling businesses to grow and adapt quickly to market demands. With the right ecommerce strategy, you can launch new products, enter new markets, and respond to customer needs more effectively, driving sustainable growth and long-term success.

Additionally, completing purchases online allows businesses to collect customer data and shopping data, which they can use to reach new customers and personalize the customer journey, thus increasing brand awareness, brand loyalty, and average order value. 

What are the features of an ecommerce store?

In order to facilitate a seamless shopping experience for the customer, online stores need intentional, user-friendly design, including site functionality elements like logical product search and filtering tools and easy-to-navigate checkout flows. To meet the increasing demand for mobile commerce, these sites should also be compatible with mobile devices. Customer reviews and ratings can increase trust in the products and services offered. Finally, security is a necessity when dealing with online payment processing.