Take a quick scroll through your social media newsfeeds, or let a few YouTube pre-roll ads run without hitting the “Skip” button, and you might start wondering about the many brands you never see in stores that’re after your discretionary income.
The Interactive Advertising Bureau’s latest Direct Brands to Watch report includes some 250 indexed companies that are currently “disrupting their categories and shaping the future of business.” Over one-third of them are 2019 newcomers.
Image source: https://www2.iab.com/iab250-2019/
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They’re becoming beloved by consumers, media, and investors alike; one report found that the top 15 D2C brands have received almost $2.2 million in investments to date. And it’s not a passing fad. IAB has reported brands as ubiquitous as Nike and Unilever investing heavily in their D2C efforts to keep hold on the market share under threat.
While much of D2C eCommerce is from large brands like Nike adapting to what consumers currently want, a much larger portion of the industry is made of newer and smaller enterprises. These include business models like digitally-native, vertical brands (DNVBs), that not only sell direct to consumers but also own the entire process.
What are these companies all about, and why are they springing up in such high volume all of a sudden?
From the entrepreneur’s perspective, the advantages of going direct are clear, such as owning the customer relationship and experience, as well as brand loyalty and having access to all the customer data you can collect. When your initial business strategy focuses on direct-to-consumer sales over going through retailers, you’re setting yourself up for more long-term sustainability as well as short-term growth by focusing on the more challenging but impactful option first. Third-party partnerships can come later.
The best practices playbook for D2C eCommerce is still being written, but don’t wait too long to enter the game. Here are some guidelines you’ll want to follow.
Begin Branding on Day One
Selling products directly to your customers means you don’t have that introduction from a trusted friend – third-party retailers. You can’t piggyback off the established relationship and customer base that a retailer provides.
That means that building a strong brand needs to be a priority from day one. As soon as a stranger encounters your media presences and products, it’s all the more important that you strike up a connection, make an impression, and play to emotions.
“Storytelling is a central part of our marketing,” Steph Korey, the co-founder of D2C suitcase brand Away recently told Inc. “We thought, if people who travel heard about us from an in-the-know friend, we could make their travel more enjoyable. How do we put our story out in the universe in a way that people will repeat it?”
Image source: https://www.awaytravel.com/
While the biggest D2C success stories often have sleek-looking visual brands, it’s not about that. You just need to be thinking about stories – the story that your brand tells, and the stories that you want people to tell about your brand. Start cultivating your brand story, values, voice, and vibe as soon as possible.
In a piece on top B2C brands, Bloomberg technology analyst Janine Wolf wrote, “Gone are the days when the only goal of a company was to persuade you to buy its product. Now, making you feel kinship with a brand – even love – takes precedence.”
Branding elements like emotional intelligence and friendliness are more important as millennials and Gen Z become bigger segments of the market. This is, of course, the case with all brand marketing, but it’s all the more important in D2C.
For example, Care/Of is a subscription box for personalized daily vitamin packs, and they don’t use the stale-feeling multivitamins at the grocery store as the standard to beat. From conversational copy to pack designs featuring fun facts and quotes, their approachability and kindness rivals even the most whimsical brand.
Image source: https://takecareof.com/
Strong branding and the experience surrounding it is what sets your product apart from all the other sellers on Amazon and third-party retailers who don’t build that personalized experience and story for their customers.
And when you’re able to channel all of your focus into branding and positioning one product, you can succeed – thereby finding your ideal customers – sooner.
Start Simple and Focused
Simplicity is another best practice of the top direct-to-consumer brands, and not just when it comes to their millennial-friendly branding. Most of the largest empires, online and off, started with a surprisingly basic business strategy.
Bring this simplicity to every aspect of your own D2C business, from your product offerings to your positioning to your marketing strategy. Look at some of the biggest success stories, like Harry’s, Casper and Bonobos.
Image source: https://sleeknote.com/blog/harrys-marketing
They all started by focusing on selling one product to one audience through one channel.
For its first year and first several million dollars in revenue, Casper Sleep only sold one product. They were able to channel their efforts into finding customers for that one product. It was only once they had a large customer base and proven reputation that they diversified into other accompanying products like sheets and additional mattress models.
Image source: https://www.digitaltrends.com/home/casper-dog-mattress/
Now their connection with their customers is so established and their relationships are so strong that they can launch something like a luxury dog bed for over $100, and their customers will rush to buy them.
Choose Your Technology Wisely
Another thing the best direct-to-consumer brands have in common? They think like Silicon Valley. As noted by McKinsey consultants, “the most successful D2C players to date – such as Dollar Shave Club and NatureBox – operate more like technology companies than traditional CPG manufacturers.”
That means always thinking of scaling, especially when choosing your technology stack. Technology is to your eCommerce efforts what a strong structural foundation is to a brick-and-mortar store.
Image source: https://www.iab.com/insights/the-rise-of-the-21st-century-brand-economy/
A new physical store owner might not lease the biggest storefront on the block, but he or she would still be wise to keep in mind the potential needs to accommodate growing inventory. When it comes to eCommerce technology, choose tools and platforms that are beginner-friendly but easy to scale with
For example, don’t try to custom-build a store interface to compete with Amazon’s before you’ve even launched anything. Don’t spend months creating custom solutions for everything before you’ve seen success and made money to reinvest back into your brand.
Your best option is likely a platform that knows the best practices but lets you customize to your own brand. That way, when you’re just getting started, you can get up and running easily. But as you grow and have a customer base to keep satisfied, you can customize your experience for them accordingly.
Build Partner Relationships Early
Another smart tactic to build into your D2C strategy from the beginning is building relationships with other companies in your industry, as well as influencers. This is especially important if you’re serving a narrow niche, in which case trust in your brand will be even more scarce.
Partnerships can be one of your most powerful growth strategies.
Influencer campaigns can be great for tapping into a large audience without the strings a third-party retailer feels. Working with influencers has been a huge part of how mattress brand Leesa, for example, became a household name for its audience.
Image source: https://www.instagram.com/p/Bi2RK1cBCEY/
Beyond influencers, you’ve got partnerships with complementary companies and products.
These allow you to borrow each other’s audiences, which likely overlap, without competing with each other. For example, if you sell fitness clothing, you could partner with a sleepwear company for a promotion highlighting the overlap in your audiences.
Plan Offline Connections
Finally, a smart strategy for D2C eCommerce brands to consider is taking the relationship with customers offline. While customers are shopping online more and more, connections are still formed more quickly and memorably offline.
Developing strong relationships with them will be key to customer retention, too.
You have dozens of options to choose from, depending on your goals and audience. From community meetups and events to experiential campaigns and pop-up stores, you can generate buzz and word-of-mouth, form stronger connections with your customers, increase trust, and generate sales.
Warby Parker operated for three years before opening its first Instagram-friendly showroom. Today the company operates dozens of physical locations across North America.
Image source: https://www.instagram.com/p/BuSFa7hAa4k/
For their part, Casper Sleep has managed to build an offline presence without going the same routes traditional mattress companies take with bed stores. While they have explored regular retail partnerships, they’ve also innovated on that with branded pop-up experiences that feature home-like settings to emulate the product experience.
And they’ve opened a “nap lounge” in New York City that allows a real test drive of the products while defining a new type of wellness activity.
Your Business Comes First
When you choose to go direct-to-consumer with your eCommerce business, the most important thing to keep in mind is that your brand, customers, and business come first, before partners or retailers or platforms.
Instead of playing to the rules of an empire like Target or Amazon, look at those as supplemental options to support your own store. This is what will keep your brand steady and sustainable. Popular retailers and shopping platforms might come and go, but if you can build and master your own audience, you can skip the middlemen and come out ahead.
