The online economy is booming as consumer behaviour continues to shift towards eCommerce at a rapid pace. 2020 saw years of digital transformation happening in months. The direct to consumer channel became the crucial source of revenue for many legacy brands, whilst many new brands seized the initiative and launched new offerings.
And whilst Amazon continues to grow, many are still eschewing marketplaces and deciding to go direct to consumer. Shopify's 2020 Economic Impact Report shows that there was almost £16 billion in economic activity on its platform alone, supporting 112,780 jobs in the UK.
eCommerce has changed business. The Office for National Statistics data shows that as lockdowns happened, internet sales as a percentage of total retail jumped to over 30%. Whilst restrictions easing has impacted this slightly, and this speed of growth will slow, it's believed that consumer behaviour will remain online.
It's never been easier to access the technology required to sell online. The shift towards SAAS (Software as Service) has been driving down the technological barriers to entry. Software that would have been Enterprise online and requiring specialist teams - and the associated high budgets - is now attainable for those with little experience to use for a low monthly cost.
The fight for market share is fierce, and when choosing what eCommerce platform to use, the dizzying array of options can quickly become disorientating. And for anyone already established with an ageing eCommerce business, it's natural to wonder if they're still on the right platform. As digital agency owners ourselves, we're often asked which platform we recommend or what we think of each platform.
In talking to people behind UK DTC brands Millican, Outdoor Provisions and FRAHM Jacket, it's notable how reassuring it can be to be using the same platform as the brands you admire. And by curating 119 of the most interesting UK and EU DTC European brands in our Directory, we're able to profile their technology stack*, creating a report that's helpful for anyone choosing what eCommerce platforms they should use.
What should a DTC brand consider when choosing an eCommerce tech stack?
An eCommerce operation needs more than a website to operate its business from. One of the well-known benefits of going direct to consumer is having a direct connection to your customers and their data. The most successful DTC brands are known for providing high-quality customer experiences. But what is needed to deliver a winning customer experience?
We've broken our data down into five areas that are key to trading online.
- eCommerce Platform: what technology is used to build the website and allow it to transact.
- Email Marketing: how marketing and transactional emails are sent to customers.
- Analytics: how a brand reviews how their store is performing.
- Optimisation: how brands can learn from existing customer behaviour.
The cornerstone of an eCommerce brand is, of course, its website. When creating an online storefront, there are many considerations to take into account;
- How much will your eCommerce platform cost? This needs incorporating into any financial planning from the outset.
- What payment gateways will you use, and what are their commission fees? Knowing how much you'll be paying out on each sale is key to forecasting future income accurately.
- How will you manage ongoing maintenance and resourcing? An eCommerce website should always be dynamic by nature. Knowing if you'll do this yourself, or need to hire development resource, is vital.
- What territories and currencies will you support? Selling in multiple countries is expected, but choosing what regions you can support is essential when considering the initial setup of your website
- Do you need to integrate with a fulfilment partner? Knowing that your website integrates well with their operations makes things much easier for anyone using a Third Party Logistics partner.
- Will you also support wholesale? Many brands choose to support wholesale and DTC and need to understand if and how their platform can support this.
Email plays a constant role in eCommerce. Initially for data capture and direct selling in the marketing phase, but also onwards through the transactional messaging, and then in retention. With changes to how third-party cookies are used, having this first-party data point is incredibly valuable for a DTC brand. To maximise the power of email, a brand should consider;
- How much will your email marketing platform cost? This will be dependent on the number of subscribers, so forecasting future growth and understanding pricing tiers is required.
- How will you design emails? Most platforms provide the tools to work with to make sure all communication is on-brand.
- How will you capture data? Getting a large email database is the first step. Does the platform enable the smart creation of popups forms for your website without needing a developer?
- How will you segment your data? Taking a spray and pray to email marketing doesn't cut it. How easy is it to segment your audience to allow targeted messaging?
- How will you use automation? Put your growth on autopilot with email automation to welcome subscribers and build engagement.
- Will you expand into SMS? With SMS growing as a communications channel, does your choice of platform integrate with this?
Launching a website is just the start. Only by tracking key metrics can you fully understand what is happening on your website. Brands need to consider;
- What metrics will you track? Simply collecting piles of customer data will not help. Consider which metrics give you a complete picture of how your brand is performing.
- Who'll be reviewing these metrics? Data is only helpful if it is regularly reviewed and can be understood by those studying it.
- What will do with these metrics? Finding and understanding data is the first step, but knowing what to do with this insight fuels change.
Learning about customer behaviour is fundamental to creating better customer experiences. The options for capturing insight vary, and the following should be considered;
- Have you mastered the basics and easy wins yet? Ensuring your website is already to a high standard should always be the first step.
- What type of testing works well with your audience size? Investing in a sophisticated tool without having enough traffic to test on reliably is wasteful.
- How will you resource any experimentation and testing? Having access to a tool is useless if you do not have the resource readily available to maximise its potential.
eCommerce platforms used by DTC brands
For very small and basic websites, platforms such as Squarespace or Wix now have eCommerce options, and it was slightly surprising to see these show up in the results. These platforms might be fine for getting started, but it's common to hear how quickly brands become limited by their constraints.
The growing NoCode movement - a raft of platforms removing the need for developers to write code - is a source of next-generation tools to keep an eye on. Webflow showed up with 0.7% of the 119 websites profiled, but expect this to change as more people begin to understand the power of these tools.
For brands with more complex trading needs, platforms such as Magento Commerce, Craft Commerce, and many Headless platforms like Prismic are visible in the results. But overall, two platforms dominated the results, covering 78% of the brands profiled: Shopify and WooCommerce.
Shopify / Shopify Plus
It's no surprise to see Shopify so prevalent amongst the types of brands we've featured. With 48% of the brands featured on our Directory using the platform, it's clear that it's an excellent choice for many brands. In speaking directly to brands established on Shopify, it is clear that Shopify empowers them to run their store themselves.
Wordpress / WooCommerce
WordPress is often one of the first platforms that springs to mind for many websites as an established content management system. With 30.6% of the brands profiled using WordPress and its eCommerce Extension WooCommerce, it's clear that many brands are happy using such a well-known platform.
Email Marketing platforms used by DTC brands
Communicating directly with your customers is one of the benefits of DTC, and the ability to send messages direct to inboxes can be highly efficient. With the advent of tighter privacy rules in iOS 14.5, owning this first-party data provides a way to maintain a connection to your customers. With a growing list, a brand can leverage the power of database segmentation to send personalised messages. And with Automations, it's easy to build custom email flows that leave your email platform to do the hard work whilst you work on the rest of your brand.
There is a wealth of choice of email marketing platforms to choose from, but our results show two dominant platforms used by Uk & EU DTC brands.
Of the 119 brands profiled, 52.2% rely on Mailchimp to handle their email marketing. Mailchimp is an established force in this area, having launched in 2001. But it’s losing ground in the eCommerce space to competitors such as Klaviyo because it doesn’t offer the same level of eCommerce specific features.
Hot on the heels of Mailchimp is the newer platform, Klaviyo, with 32.7% of the brands profiled using it. With a tighter focus on eCommerce, Klaviyo provides deeper behavioural analysis and segmentation.
eCommerce Analytics platforms used by DTC brands
Once trading, it is vital that a brand stays up to date with its performance. It's no surprise that 69.1% of the stores profiled were connected to Google Analytics. Its basic version is free, and it contains a multitude of analytics linked to eCommerce.
It's worth noting that Shopify also includes its own analytics dashboard, so 48% of the brands profiled are likely to also be using the inbuilt analytics.
eCommerce Optimisation platforms used by DTC brands
Having the ability to watch customers interact with your website can be a great way to uncover opportunities. Hotjar enables you to create heatmaps showing where customers scrolled to or clicked and screen recordings that allow you to watch them use your website. Its feedback and surveys tools also allow you to ask simple questions at critical points in the customer journey to help you understand the customers' needs.
Also featured was Fullstory, which offers more advanced features.
Integrating perfectly with Google Analytics is Google Optimise. Offering both free and paid tiers allows website owners to optimise their website with data-led tests. With A/B and multivariate tests, and personalisations options available, it's a powerful tool to start experimenting with. And unlike many other tools, its inbuilt editor means tests can be set up without needing a developer to edit your website.
With so many important decisions being made that could make or break your brand, it's vital to carefully consider your eCommerce tech stack both at launch and on a regular basis. When budgets and resource might be stretched, knowing you have a tech stack that works hard for you will help you move further, faster.
The low barrier to entry doesn't always mean it's easy. Don't be afraid to speak with experts and use expertise as and when required. Getting the basics of UX, site speed, and SEO goes a long way to building a strong foundation to build on.
Finally, whilst it's always great try new apps or services to improve your website, remember remove any apps or plugins you're not using! Our profiling highlighted many websites with competing services installed, which will only be adding bloat to the website and slowing it down!