Consumer and durable goods lose their customers: Four opportunities for a better D2C strategy

In view of the subdued consumer sentiment, more and more companies such as adidas, Puma and Zalando are under enormous pressure in the new year. Falling sales are making urgently needed investments in sustainability or artificial intelligence increasingly difficult. The effects are being reinforced by the bankruptcies of start-ups (+65%) and companies (+26%) compared to the previous year, which corresponds to a total of 15,000 companies.

The fashion industry in particular has been experiencing an unprecedented wave of insolvencies for months: Peek & Cloppenburg, Görtz, Reno, Hallhuber, Impressionen, Madeleine, Peter Hahn, Galeria Karstadt Kaufhof, Wormland. With the Sigma insolvency, Sportscheck, Fahrrad(.de) and Tennis-Point also slipped into bankruptcy. In addition to consumer goods, consumer durables such as Römertopf, Zeller Keramik and Weck were also hit. Furniture manufacturers such as Arco, Nolte, Hülsta, Wesco and a number of kitchen manufacturers also filed for insolvency in 2023. These included companies such as Warendorf, Hansa, Störmer, Lechner, Dan, Alno and Quelle.

And so the new year begins for many with postponed investments, extended supply chains, reduced production and overtime cuts, also in view of new problems in the Suez Canal. Knife manufacturer Zwilling is putting its workforce on short-time working, just like 40 percent of furniture manufacturers.

Does this sound familiar to you?

Complex situations require focused action. The time of silos is over. Now all those with responsibility in the company need to sit down at the same table.

Task: Everyone works on a joint strategy for the future from their own area.

Procedure: Business model, organization, brand and sustainability together create a solution scenario.

Opportunities: Those who build up direct customer relationships as well as retail relationships usually also succeed in capitalizing on these. In other words, developing significant eCommerce margins from direct-to-consumer channels. Since 2000, adidas has been showing us how to do this and make retail partners and customers happy in the process. Active customer data offers monetary and planetary earnings potential in several respects.

• Only those who use their customer data can differentiate themselves in the market through target group-specific innovations. For example, two founders with over 12,000 fans developed their first pan design via a crowdfunding campaign. Today, Pfannenhelden(.de) is read by over 100,000 people every month. With their STUR cast iron pans from Germany, Filip Mierzwa and Simon Köstler not only win design awards, but also offer a 50-year guarantee on a pan costing between 150 and 300 euros.

• However, consumers are not only digging deeper into their pockets for design. As the example shows, they are just as happy to avoid coatings that are harmful to health (PTFE, PFOA, PFOS). In every product area, there are target group segments that are willing to pay more when it comes to sustainability. This is the quickest way to replace plastic kitchen utensils with other materials, rent out kitchens temporarily or refurbish electrical appliances in new cycles.

• And once a specific target group segment has been conquered, internationalization is just as cost-effective via social media. Marketplaces are identified in advance, portfolios are tailored and Go-2-Market campaigns are reviewed on a country-specific basis. This not only allows additional sales potential to be leveraged, but also increases the earnings per product through economies of scale.

• Those who actively use their customer data in times of substitutable products are also able to significantly increase the overall duration of their customer relationship, i.e. their customer loyalty. This not only reduces marketing and returns costs. Most consumers value personalized shopping experiences and direct service contact. Precise targeting can encourage customers to make specific purchases at each stage of their lives, which ultimately increases the total revenue per individual customer, i.e. the customer lifetime value.

Objective: To further develop the core business with an efficient set-up and actively use direct customer relationships to generate a higher price premium through sustainable innovations.

Result: Every crisis is overcome with the company's own customers and their willingness to pay. This is the only way to sharpen portfolios, measures and earnings horizons.

This creates clarity in times of change and moves the company and the planet forward.