With a 50% increase in ad spend year over year (AdWeek), DTC (Direct to Consumer) brands have definitely taken the retail marketplace by storm, disrupting the way consumers have historically shopped. Consumers expect convenience at every stage of their shopping journey and content that is personalized for them. eMarketer reports that DTC brands are well positioned to continue their success in 2020, with eCommerce sales expected to grow 13% and 40% of US internet users expecting D2C brands to account for at least 40% of their purchases within the next five years.
Brands like Everlane, AllBirds, Billie and others who have risen to the top of the DTC hierarchy have been able to succeed by delivering unique experiences and solutions to problems consumers didn’t even know they had. But all is not lost for mature brands. There is an opportunity to learn how these darling DTCs get their social commerce and targeting strategies right ... and we have 4 lessons for legacy brands that want to compete.
Control your brand identity within commerce channels. Mature brands who sell across multiple online retailers tend to have minimal control over how their brand is positioned and sold at each online retailer’s website. Each product page could look and read differently, resulting in a disjointed experience for the consumer. The DTC model allows brands to own their story, providing a seamless experience for the consumer along their purchasing journey. The good news is, modern marketers now have they tools they need to create thumb-stopping shopping experiences that can reach their consumer wherever they may be consuming content, and also provide retailer options to shorten the path to purchase.
Identify and own your audience. Since DTC brands are selling directly through their own website, they can easily track and identify their consumers. They can quickly gather data that can be used to build audiences that they can then retarget and communicate with throughout their journey. Mature brands with a multi-retailer footprint have to rely on the retailer to provide data, which is often incomplete and delayed. By the time brand marketing teams sort through the data, they may have missed their chance to further engage with their consumer, who may have already moved on to the competition. Luckily, there are marketing solutions that can track and provide first party data in real time, enabling brands to more quickly re-engage with their audience and also finally understand how their investments are working across their online retail partners to better develop future plans.
Capitalize on influencers. Influencer marketing has been a key contributor towards Warby Parker, Glossier and Casper growth, since building reputation and trust is vital to growing their business. Whether they are empowering seasoned influencers with 100k followers or encouraging everyday loyal customers to share their experiences, DTC brands have found that this marketing tactic has proven successful in reaching their customers through all stages of the funnel - building awareness, sharing reviews and trial and even soliciting purchase. And with 31% of all internet users (47% of A18-34) (eMarketer Dec 2019) reporting that they have purchased a product through social media at some point, it’s time for legacy brands to recognize that influencers cause shopping conversions. Measuring the impact of influencer marketing has been challenging for marketers in the past but luckily there are now ways to measure purchase intent and pinpoint which influencers are actually moving the needle with consumers.
Come together towards the common goal. Small startups are just that, small. Marketers at DTC brands usually wear many hats and are often integrated within brand, strategy, eComm, social, analytics and media teams. This model allows for a smoother collaboration between teams that drives results since the consumer’s journey has shifted from a linear, single path down the funnel to a multi-channel marketing experience. Now is the time for larger, established brands to break down the silos and support more collaboration across departments, which will in turn increase nimbleness and the ability to act and adjust when insights are acquired or new trends are discovered.
DTC brands have altered the retail landscape because they see the marketing funnel in a different way than more traditional brands do. But here’s the thing: we’re definitely not the only ones taking notice. For example, major CPG portfolio brands like Unilever and P&G have seen the benefits in borrowing pages from the DTC playbook - even acquiring brands like Dollar Shave Club. Native, This is L and First Aid Beauty - with hopes to regain their foothold in niche categories, learn how to move faster and understand how to build deeper connections with their consumers. Even behemoths like Walmart are jumping on the d2c learnings bandwagon, with acquisitions of Bonobos and sneaker heartthrob GREATS.
To keep up in today’s competitive eCommerce marketplace, legacy brands will need to adopt some of these lessons from their DTC counterparts, who put the customer at the center of the entire brand experience.