Today’s consumers have high expectations when it comes to the brands they interact with delivering a positive customer experience. And many leading brands are responding to this expectation by taking their proposition directly to consumers. Lets take a closer look.
The retail world is being shaken up as distribution models are changing to bypass distributors and third parties. An increasing number of brands are now selling directly to consumers as part of a new direct B2C strategy that creates a closer relationship between the brand and consumers.
Known as ‘direct-to-consumer’ (or DTC), digital channels have helped enable a closer, more direct relationship between each brand and its consumers, resulting in what is most often a more convenient and positive customer experience.
The benefits of adopting a DTC strategy are multiple. By incorporating a DTC approach to their marketing and sales strategy, brands can better differentiate themselves and their products within the marketplace. DTC also allows brands to build a better, more direct relationship with their customers, which results in building loyalty.
In this article, we’ll explain what direct-to-consumer is, go deeper into all the ways in which it is beneficial and how your brand can leverage it to foster stronger relationships with its target audiences.
What is Direct-to-Consumer (DTC) eCommerce
In the past, brands that traditionally sold to retailers would manage the merchandising and sales of products to those consumers. The consumer knew that if they went to a specific retail store, they could purchase specific branded products from that retailer.
For example, if you were a consumer searching for a pair of new Nike trainers or a Miele vacuum cleaner, you would know exactly which retailer to visit to purchase these specific brand-name products.
Direct-to-consumer (DTC) is different from this retail model as it bypasses the retailer, cutting them out of the equation altogether. With DTC, the brand sets up a sales channel directly with the consumer to communicate its messages, products and offers directly with consumers – and also makes sales directly. An example of this is where a consumer can visit Nike’s official website to purchase trainers, rather than attending a retail store like JD Sports to purchase the trainers.
With DTC, the brand is selling directly to the consumer, but it is also driving its own marketing efforts to consumers.
Why Brands Are Moving Towards DTC
Brands are increasingly moving towards a DTC model, as opposed to selling their branded products through retailers for several reasons:
- Building positive customer relationships. Because DTC allows each brand direct access to consumers through any number of channels, the brand can build a better relationship with their customers by connecting with them directly and offering the type of content that resonates best with their audiences.
- Improving the customer experience. The brand can control all aspects of consumers’ interactions with its brand and products without an intermediary (such as a retailer) entering into any part of the customer journey. Cultivating customer relationships leads to increased customer loyalty, an important factor for every brand.
- Optimising product launches. The best way for brands to get in front of customers to let them know about new product launches is to speak to them directly. Brands have a number of channels they can use to reach customers, including through their website, email lists, and social media channels. By launching products directly to the customers, the brand controls the messaging and can reach potential customers in a more personalised, informative way.
- Better understanding of customer demographics. Without the retailer acting as a go-between, the brand is better placed to understand their customers and segment them appropriately to better market to them. Brands can also collect data about buying trends and demographics, which help the brand understand and connect with its customers.
Why Digital Has Created a Boon for DTC
The rise of digital commerce and digital media channels has made it easier than ever for brands to engage in DTC strategies. Brands no longer have to rely on retailers to sell their products; they can reach customers themselves.
In the past, retailers were important because they provided that third-party credibility and guarantee. They were also a destination where consumers physically spent their time to view and shop for items.
However, these days, with digital becoming the norm, people are spending less time in physical shops and more time browsing online, a change in habit that has only been increased by the Covid-19 pandemic. This means that brands can use their own digital channels, including their website and social media, to reach consumers directly with offers, discounts and new product sneak-peeks.
Brands can set up their own email marketing campaigns and retargeting campaigns to get consumers to visit their website and make purchases directly rather than from a retailer. With more people shopping online than ever before, this is not a difficult proposition as it is already in line with consumer behaviour.
Consumers Prefer to Shop Directly with Brands
The fact that consumer habits are changing to become more digital also lends itself to a new preference where consumers prefer to shop directly with brands rather than through a retail intermediary.
With the rise of online shopping and social media, many people already directly follow and interact with brands online. So, shopping directly with the brand through its website or social channels isn’t a far leap from the interaction that is already occurring.
Research bears this out, finding that over half (55%) of all consumers say they prefer to buy directly from brands. The reasons for this are multiple: many consumers feel that they can obtain more comprehensive information about the products being sold directly from the brand. Additionally, consumers cite better pricing and the availability of a wider assortment of products as key reasons for preferring to shop directly with a brand instead of making purchases from a retailer.
DTC Driving More Personalised Experiences
eCommerce professionals have known for quite some time that deploying more personalised experiences is key to acquiring and retaining modern-day customers. With today’s consumers having high expectations around what they need from brands, creating personalised experiences helps each customer feel more valued and allows the brand to provide more bespoke recommendations and products.
As a brand, owning your sales channels means that you can segment your audience and deliver content tailored to various sectors. A brand’s websites and social media channels allow it to interact directly with its consumers. Brands can use these platforms to create personalised content for their audiences. Each interaction can be an opportunity to deliver personalised messages and offers, whether via the web, email or social media.
Doing this offers personalisation to customers, so they feel that the brand understands their needs and can deliver against them in helpful ways, rather than intrusive and overly sales-y.
The Benefits of Adopting a Direct-to-Consumer Approach
Deliver what your customers want
To get to know a brand and its products, customers need the information to make well-informed shopping decisions. By taking a DTC approach, brands can personalise and tailor the content that they provide to their customers.
From behind-the-scenes sneak peeks at new products to product tutorials to simply humorous videos that give a glimpse into the brand’s ‘personality, delivering the right content to customers will help inform customers and drive customer loyalty.
By providing content directly to customers throughout the entire customer journey, brands can have more control over the customer experience as a whole, thus building better relationships with customers.
Being able to deliver to customer needs and interact with customers directly is extremely valuable for loyalty, hence why many brands are increasing their focus on DTC.
Build brand relationships
As many social psychologists explain, selling isn’t just about the product itself; it’s about the connection that the consumer has with the brand and how engaging with that brand makes them feel.
When customers have an affinity for a particular brand and feel that they can trust it, they will be loyal to the brand. This is why building customer relationships is so crucial for brands, particularly those engaging in DTC eCommerce.
Because DTC brands own the customer relationship, they can use well-informed tactics to build a more personalised experience for each customer. By controlling their own narrative and interactions with each customer, brands are able to build stronger relationships with their customers than when customers purchase their products from a retailer. This is a key reason why DTC is valuable for brands and customers alike.
Improve customer experience
Customer experience is one of the most important factors driving sales today. With many companies vying to provide the best customer experience possible, if the experience with a brand is lacking, consumers can easily give their business to a competitor.
Brands that sell directly to consumers are in a strong position to create and deploy an excellent customer experience. Because they do not have to rely on a retailer to create the customer experience in a physical store, brands can devise their customer experience exactly as they envision it should be – whether that’s online or in a brand’s brick-and-mortar shop.
When the customer experience (and related customer journey) is curated directly by the brand, without a third-party retailer in play, the customer experience can be more personalised, with an aesthetic that specifically suits the brand. When this aesthetic is communicated to the customer across all touchpoints throughout the customer journey, it makes them feel more closely connected with the brand. This, in turn, leads to increased brand loyalty.
Increase revenue
While DTC is primarily a great way to establish your brand, control the messaging around your brand and how it is portrayed to consumers, it can equally play a big role in maximising a brand’s sales potential.
As discussed above, DTC is incredibly powerful in building relationships, delivering a better customer experience, and carefully curating the overall customer journey. Because we know that loyal customers spend more, all of these positives about DTC also have the dual benefit of resulting in increased sales.
Brands can also be clever with how they leverage DTC to drive sales in novel ways. For example, clothing retailers such as the high street fashion brand & Other Stories offer exclusive online-only collections in their online stores. This provides an incentive for customers to engage and shop directly with the brand, as opposed to going through a retailer.
The Importance of Data Collection in DTC eCommerce
As we briefly touched on above, by employing a DTC model, brands are able to better understand their customers, resulting from the direct interactions they have with them.
When it comes to audience segmentation, shopping trends and overall understanding of the customer base, the data that brands are able to collect from DTC eCommerce provides a wealth of insights.
By collecting valuable data from each transaction, including customer trends, shopping patterns, demographics, and other insights, brands can tweak their approach to marketing and advertising to their customers. They can become more personalised with their approach to their customers and create content that will land optimally with those they seek to engage with.
The data that comes from selling directly to customers is unparalleled and can help uplift sales in a way that a brand might not be able to do so if going through a third-party retailer.
Final Thoughts
With consumer shopping habits evolving rapidly, there’s never been a better time for brands to consider investing in DTC for a new era. Whether it’s selling directly to customers through an established marketplace or app, or by setting up an eCommerce offering through web channels, a brand’s ability to interact directly with its customers will help it elevate brand perception and build loyalty in new, untapped markets. DTC provides the perfect way to improve your connection with your customers – both online and offline.
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