The AI balancing act: 3 tips for a successful D2C strategy

Getting the right mix of automation versus the human experience can help you prevent fulfilment problems damaging customer experience and loyalty. But when do you need the human touch, and when is it best to deploy AI?

Reem Al-Basri, Head of Digital Media Strategy, Theorem Inc. explains why the reduction of brand awareness associated with search and in app purchases can be offset by social and influencer marketing to result in full funnel impact.

The ecommerce market boomed in 2021 as a result of the global pandemic and as 2023 begins it seems that online sales are still growing steadily, making up 30% of total retail in the UK. And yet, with 61% of consumers planning to cut discretionary spend in 2023, D2C brands hoping to hit the ground running are facing a tough challenge to remain competitive in this difficult economic climate.

The key to success is not new - it lies in building that personal relationship with a consumer. It sounds simple, but with the demise of the cookie leaving brands fragmented in their data collection and the rise in digitalisation leaving the average person seeing up to 10,000 ads per day - the competition to break through the noise, reach the target consumer and convert them to a customer is fiercer than ever. 

For D2C brands to keep pace, win business and promote customer loyalty in 2023 they must engage in 3 core activities:

  1. Automate your data collection

As the cookie conundrum continues and with an increase in privacy conscious consumers, brands are continually striving to find ways to gather data on their target audience to facilitate the creation of personalised marketing strategies. There are many ways to do this, such as surveys and sign up forms, social media and website analytics, CRM tracking tools or third-party data providers to name a few.

The most recent trend in acquiring much desired first party data is partnering with Retail Media Networks (RMNs). These advertising platforms are becoming essential to the modern digital marketing landscape because they run on the digital properties of specific stores, allowing brands to reach consumers near the closest point of sale.

Regardless of the collection method, these data gathering processes use a myriad of tools and output the data in many different ways which can often lead to a data paralysis whereby the information collected cannot be analysed or compared in a meaningful way.

This is where adopting automation tools is crucial, as they can help manage high volumes of data and continuous, real-time analysis at scale, across all devices and platforms. These tools can also help businesses scale their first-party data collection and analysis to drive deeper personalisation strategies, meeting marketing and customer experience demands in real time.

Despite unease in the workforce over automation replacing human roles, this type of technology actually creates efficiencies, making it easier for people to evaluate the meaning of the data and feed it back into business strategy. 

  1. Utilise Influencers

With 72% of customers stating they will only engage with personalised messaging, the preference for customised content has driven a huge increase in social and influencer marketing, not least because it is a consumer-lead process. The customer chooses who they connect with on social media based on their personal interests and the same methodology applies to the brand too - advertisers can choose to collaborate with influencers whose followers match their target audience. 

Similarly, with 95% of consumers utilising product reviews when considering a purchase, user-generated content from social media is unsurprisingly one of the most high impact strategies for promoting a D2C brand. Not only does the content shared by these channels result in higher engagement rates and ROI compared to other types of digital advertising, the leads obtained from this type of activity are already much further down the sales funnel than those garnered from a less targeted or personal approach, making for a more efficient conversion process.

  1. Embrace the Human Experience

75% of consumers state that a good customer experience is key to influencing their brand loyalties, this means that D2C marketers have the added challenge of providing a seamless end to end service in addition to attracting the customer in the first place.

The rise of digitalisation has led to a demand for an ‘always on’ customer service and an increase in the expectation that brands should meet the customer on their terms, across channels they prefer, at a time and on the device that best suits them. Brands have been quick to embrace live chat, messaging and video channels and more advanced tools such as chatbots, cloud technology, augmented and virtual reality are becoming increasingly popular.+

These technologies promote the ability to track, monitor and manage all customer interactions and touch points across the customer journey, from first engagement to fulfilment and allows a full 360 degree view of the process.

AI can also be a powerful tool for reducing churn by identifying customer pain points so they can be addressed preemptively. For example, based on the analysis of buying and behavioural patterns, AI-powered programs can flag unhappy customers early in the game, allowing businesses to address customer pain points preemptively. Similarly, there are fully automated customer retention platforms that use AI to predict when a consumer may be about to abandon or cancel an order and provide enticing incentives at just the right time  - a competitive advantage as long as the need for human interaction is not bypassed.

Chatbots, for example have the power to guide a customer through many decisions and troubleshoot numerous issues but essentially can direct a user to a customer service representative if necessary, it is this kind of personalisation that has lead to the expectation that chatbots are likely to generate over $100 billion in ecommerce transactions this year.

The ecommerce market will likely continue to experience significant growth as our world becomes ever digitised. Successful D2C brands will be those that adopt digital, social, automation and intelligent technologies to garner the right customer data, evaluate it and utilise it in a meaningful way without losing sight of what the consumer really wants - personalised experiences.

By Reem Al-Basri

Head of Digital Media Strategy

Theorem Inc.