Many of today’s hottest brands began by marketing directly to customers instead of seeking retail intermediaries. Fast-growing brands like Misfits Market, Smile Direct Club, and Allbirds have benefited from DTC marketing advantages, including lower overhead, strong customer relationships, and a growing base of consumers who enjoy the convenience of online shopping.
The increasing importance of developing a winning DTC strategy
Even the increasing popularity of DTC businesses with consumers does not mean that it’s time to neglect the basics. Some market factors that sparked the DTC boom also threaten to impede it. Thus, DTC marketers have observed that they’re now operating in a less forgiving marketplace than they enjoyed last year.
- According to a CNBC report, even the most prominent examples of DTC successes during the past few years need to cope with ongoing issues with supply chains and perhaps even worse, consumers worried about their economic futures and less willing to buy impulsively.
- Also, social distancing during the pandemic encouraged online shopping, and DTC companies benefited from this boom. Still, increased competition from internet retailers crowded the market and made advertising more expensive. At the same time, technological changes, such as Apple’s new privacy features, have worked to diminish the supply of available ads.
Five essential components of a DTC marketing strategy
Rather than resting on their laurels and accepting slower growth, today’s market leaders have responded to market changes. For many realistic and budget-constrained marketers, adapting in the next few years won’t mean making dramatic changes. Instead, it’s time to revisit an effective DTC strategy’s basic and most essential parts.
Direct marketing gives businesses a chance to understand their customers. Even before a DTC business attracts its first sale, it should develop comprehensive buyer profiles and understand its intended audience’s potential pain points and values to develop an appealing brand.
Billie projects itself as a source of affordable, convenient products for women, a solid social voice, and an element of fun and relatability. For example, Billie markets women’s razors. Right from the start, this brand associated itself with the goal of eliminating the “pink tax” that occurs when women pay more for seemingly similar items than men do.
Unique messaging and packaging
Successful DTC businesses avoid having their products considered commodities through unique, appealing messaging and packaging. Some brands can even use DTC packaging to express their voice, notably since the package generally offers customers their first physical contact with the company.
DTC package design doesn’t have to be extra flashy to help brands stand out on virtual shelves. For instance, the Big Eye blog highlighted Misfit Market’s mission to reduce food waste by selling produce that’s not shaped uniformly enough for grocery stores. The company furthers this socially responsible business goal by using recyclable cartons for shipping.
Other DTC brands use packaging to make their brands memorable and not just another product on a virtual shelf. Examples include using reusable packaging to ensure the customer sees their brand long after the product’s used up and making packaging more useful, like businesses that print instructions on the inside of the box.
DTC businesses thrive by adopting a customer-first business model. The attention to their customer’s needs gives these companies an advantage over non-direct competitors that consumers perceive as commodities.
As an example, Casper practically reinvented the customer experience for mattress buyers. Before this company debuted, almost everybody went to a furniture or mattress store to let a salesperson guide them to products that fit budgets and requirements.
Casper grew from nothing to $750 million in just four years by delivering quality mattresses in a box, offering easy returns, and helping their customers understand the importance of replacing outdated mattresses and getting a good night’s sleep.
Seasoned marketers understand that optimizing conversions can make the difference between profits and losses. The best advice for improving conversions involves setting goals, determining metrics to measure progress, and then tracking and testing. However, this advice doesn’t offer any suggestions for how to improve. The importance of tracking and improving conversion rates always rises with the cost of advertising and market competition.
Take some inspiration from a DTC business called Crossrope that offers premium jump ropes, accessories, and a fitness app.
- First, the company moved from other hosting to Shopify to use the vast ecosystem of apps they could use to streamline and enhance the shopping experience.
- The product pages incorporate high-quality videos of people using the products.
- An app combines ratings, pictures, and reviews to make it easy for prospective customers to learn how current customers like the products.
- User-generated content, like personal stories and before and after photos, engages website visitors.
Crossrope began to develop a global reach. The company turned to an app that could display local payment options and prices. This change alone produced a 20-percent improvement in conversions. Crossrope also relies on an app to track conversions and automatically adjust checkout-page messaging, resulting in a one-percent conversion improvement. The app also offers personalized suggestions for additional items based on the initial selection.
Full funnel marketing
Many marketers think of a customer’s journey as linear, like a trek across a map. Today’s shoppers gather information about purchases from multiple channels simultaneously. Full funnel marketing acknowledges these shopping habits and simultaneously provides information about a brand on multiple channels.
For instance, the Amazon Marketing blog reported that almost 70-percent of in-store customers would check products on their smartphones as they browse the shelves. About the same proportion of people will pull out a second screen to research something they’ve viewed on TV.
To conform to today’s consumer shopping habits, a consumer package goods agency might analyze various platforms for the way consumers might use them to interact. For instance, TV commercials might focus on developing brand awareness, a social page could help develop a community, and a product page can deliver in-depth information while focusing on closing the sale. The shopping cart page should offer a good user experience and might provide a chance to suggest other purchases to complement the selected product.
How the best DTC brands succeed
Marketing directly to customers offers plenty of advantages. At the same time, even prominent DTC unicorns have struggled to maintain growth during the past few months. Startups will face steeper challenges as they lack a large, loyal customer base to provide some support. Marketers need to ensure their DTC strategy excels at branding, user experience, and conversion optimization to make sure they can survive and thrive.