The buying and selling supply chain has always been through 3 channels: producer to retailer to consumer. This means the retailer had the task of advertising, delivering, and taking care of customer service. This has minimal production brands' control of parameters such as price, relationship with customers, etc.
However, with the emergence of the direct-to-consumer model, these brands have been able to cut out the retailer and connect with their consumers directly. Shopify and Shoplazza are eCommerce platforms that help retailers with DTC solutions.
If you’re a relatively new brand, you might still be pondering what direct-to-consumer (DTC) marketing is. This article will be your ultimate guide to understanding what DTC marketing means. We’ll review the meaning of DTC marketing, tactics to kickstart your direct-to-consumer marketing strategies, and examples of DTC brands you can follow their DTC blueprint. Let’s get into it then!
Direct-to-Consumer (DTC) Marketing Explained
Direct-to-consumer marketing simply involves a brand using different marketing strategies to reach out to their consumers directly, thereby cutting out the traditional retailers from the line of distribution. Apart from marketing to consumers, these brands also take up the responsibility of product sales, delivery, customer service, and many more.
While this technique has been gathering momentum for a while, the pandemic has made it quite widespread. In a period when retailers couldn’t open up shop, statistics showed that 80% of brands that relied on these middlemen suffered a decrease in sales. This was a large number compared to just the 22% of DTC brands that reported declining sales.
The pandemic showed businesses and consumers how easy it could be to work directly with each other, which made this technique so widespread. If you’re a new brand just starting, listed below are some reasons why taking a DTC approach to your brand could help enhance your customer experience and increase your brand’s credibility.
Benefits of Direct-to-consumer (DTC) Marketing
In most business models, consumers are at the mercy of retailers who decide the product price depending on the demand for the product. However, with the brand at the helm of sales and distribution, you can determine the price to sell at. You can even give discounts offered to retailers directly to the consumer, enhancing your position with consumers.
Better Understanding of Customer Pain Points
When the customers deal with you directly, you can understand their needs better. Once customers engage with you directly, you gain access to first-party data. This way, you can incorporate their needs into subsequent production batches.
Helps Organic Growth
This is particularly important for smaller brands. When your consumers have direct access to you, it provides more trust in your brand and makes them recommend your brand to more people (word-of-mouth marketing). This helps your brand grow at a steady pace.
Tactics to Promote Your DTC Strategies
Every brand has an audience with different content and tactics that appeal to them. This means you’ll need to experiment with different strategies and see which ones resonate best with your audience.
1. Build a Positive Online Presence
With half of the world’s population on social media, your online presence is extremely vital to your DTC marketing campaign. Irrespective of your audience, having a good social media activity level is an excellent step to transitioning into a DTC brand.
However, your social media posts shouldn’t always be salesy. You should try to educate your consumers, create catchy hashtags and encourage them to create content with these hashtags (user-generated content), and also inform them about discounts or sales events you have coming up.
Finally, you should ensure a speedy response to your social media DMs. This makes customers feel valued, and they could go on to recommend you to others on their timeline.
2. Use Influencers
While building a good online social media presence will have its dividends (which could be slow-yielding), using influencers could be a more rapid boost to your brand’s online visibility and following. Statistics have shown that many people would rather take recommendations from people they trust than random advertisements. Hence, using influencers with followers that align with your target audience could significantly boost your conversion rate.
Also, you could start a short-term deal with an influencer to see how well it goes before committing long-term. This helps to prevent the waste of income on unyielding advertisement avenues.
3. Use Creative and Compelling Ads
The power of ads can’t be underestimated. Don’t believe us? Ask the CEO of the Dollar Shave Club, Michael Dublin. Their $1 monthly subscription service ad in 2012 became a viral video that got well over 25 million views on YouTube. In 2016, Unilever paid a billion dollars for the brand. So, make sure you create ads that are funny and are sure to leave an impression on your consumers’ minds. This way, they will think of you when they need a product you sell.
4. Email Marketing Works
Email marketing is a textbook strategy in digital marketing. With statistics showing that email marketing can generate $42 for every dollar spent, this makes it a must-explore marketing method. However, you must do it right to ensure the right results.
Sending the duplicate emails to all your customers won’t work. Using practices such as segmented emails and personalized emails could help increase your revenue. Also, sending emails that remind your consumers about products they viewed on your online store could help them finally make that purchase.
5. Create Custom Products
What better way to make each customer feel more valued than by creating products for their unique needs? While this may not work for all brands, it tends to increase the customer base of brands that incorporate it.
By allowing your customers to make their own custom specifications for products they want, you put them in control and engage them more. While this may not work for all brands, it tends to increase the customer base of brands that incorporate it. An example of a good brand that has implemented this is the Asphalte clothing brand.
6. Customer Retention Strategies
According to a study, the cost of attracting a new customer is five times that of selling to an existing one. So, keeping your old customers on board is vital to your DTC marketing efforts. You can retain customers by incorporating features such as loyalty programs and rewards, vouchers for big spenders, and so on. Perks like this help build a loyal customer base that even refers more customers to you.
7. Donate to Social Causes
Modern-day buyers believe in the power of donating to good causes. So, incorporating donations into your company's operations could help you win the hearts of many consumers. This technique is used by the glass-making company Warby Parker. For every pair of glasses they sell, they donate a pair to someone who needs them. This way, customers can believe in their contribution to good causes when purchasing from this company.
Examples of Successful Direct-to-Consumer Brands
Following the blueprint of successful DTC brands can help you navigate the waters of transitioning your brand into the DTC market. If you’re on the lookout for the best DTC brands to study, you can’t find any better ones than the one below:
1. The Dollar Shave Club
As a man, there’s every chance you discovered you ran out of shaving blades just when you were about to get that clean homemade shave. Now, you must run to the store to get a pack for about $10. With the Dollar Shave Club, there is no more running out of blades. By paying $1 a month, this company gives you good manual blades at a stupendously good price. Their heavy discounts and compelling ads make this company one of the best DTC brands.
Cosmetics and social media are an inseparable pair. The CEO of Glossier understood this fact when starting her DTC cosmetics brand in 2014. Leveraging the power of social media and influencer marketing, she was able to connect with her target audience, selling products such as fragrances, skincare, and makeup. Seeing a 600% increase in growth from 2015 to 2016, Glossier has become a heavyweight in the cosmetics DTC industry.
3. Warby Parker
Buying glasses online isn’t a practice many would try, given that they might not fit and they’ll have to go through the hassle of returning them. But with the virtual try-on feature on the Warby Parker app, you can now try the glasses on and see how you’ll look with various pairs. If you think that wouldn’t work out well, the 4.9 ratings they have from 220,000 reviews on the iOS App Store would disagree with you. Their social activism of donating pairs of glasses to people in need is another excellent tactic this DTC brand utilizes in its marketing strategy.
The DTC business model isn’t a new technique; however, its dominance has become widespread in the past few years. If you’re a small brand looking to establish a strong bond with customers, using the DTC model could be a great way to start. This article explains everything you need to know about these brands and the DTC market disruptors. You can follow their blueprints.
(Contributed by Oluwafemi Adedeji & Hermes Fang)