Business success depends upon Customer acquisitions
One of the common myths of ecommerce business is – You build a site on ecommerce platform, integrate with good UI/ UX and provide multiple payment options and load your entire assortment of merchandise..
Voila. You have a business at hand i.e. D2C business model.
There are multiple flaws associated with this thought and one of them is Customer Acquisition cost (CAC), 90% of the ecommerce sites that I have come across, their CAC is higher than their Gross Margins on the product which they sell on their site.
In commercial terms we call this as Burn rate & this is one of the prime reasons why ecommerce business is hard to breakeven.
CAC breakdown includes your advertising spends, your promotions spend, influencer marketing, CRM, backend support, conversions etc that is basically how much cost you spend to gain business from your customers.
Customer acquisition-Rent the Runway turns to Amazon fashion
The US D2C giant Rent the Runway has now partnered with Amazon Fashion to acquire new customers.
Rent the Runway which started as rental business has recently tweaked their business model i.e. to selling of secondhand garments and partnering with Amazon fashion (marketplace) can bring them instant recognition and sales from new set of customers.
Amazon customers can purchase items from Rent the Runway’s designer exclusives as well as secondhand garments retired from its rental service or may even subscribe to their rental services.
To learn more about Rent the Runway business, click here
The company has forged a number of partnerships with retailers and even a hotel chain to ease pick up and drop off of rented items and to fuel sales.
Rent the Runway has always remained agile with changing times and have adapted their business model couple of times as well.
Rental model to subscription model and now selling of secondhand garments.
D2C business is highly competitive and any platform which masters the art of acquiring and retaining their customers will come out shinning as winner.
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