Legacy brands are having a hard time. Retailers have announced 6,986 store closures so far this year, and by 2022, analysts estimate that 1 in 4 malls in the US could go out of business. While legacy retailers struggle to remain relevant, direct-to-consumer (D2C) brands are growing their market share by employing innovative marketing strategies. Though new to the game, here are five things D2C companies can teach legacy brands about marketing.
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Keep it Simple
Limit Choice: Simplify the buying experience by offering limited options for an item. No need to confuse customers with the Paradox of Choice. Mattress startup Casper achieved success by selling just one model in six standard sizes. Likewise, Dollar Shave Club started with razors and then expanded to other grooming essentials as razor sales grew.
Start small. Specialize in a few high-quality items and add new products sparingly or as customers voice their needs. To reduce your existent offerings, review your ranges and remove duplicate or underperforming products.
Make Choosing Easy: Help consumers make easy purchase decisions by giving them all the relevant information upfront: state the discrepancies between products, highlight their benefits, list the ingredients or materials, and provide a short product description. Take a look at how D2C brand Brandless highlights their product attributes on its website in clear language using an easy to read format:
Minimalist Branding: From the rising popularity of Marie Kondo to product preferences, consumers are embracing the art of decluttering, and companies like Brandless are meeting their needs through minimalist branding.
Deploy minimalist design by removing unnecessary graphics and messaging from your packaging, using streamlined designs, and opting for solid colors in marketing collateral, emails, and website content. When using bold colors, make sure they don’t distract from your brand identity.
Data Obsession Is Important
Digitally-native brands’ enthusiasm for data allows them to maintain a close relationship with customers and make better product decisions. While D2C brands live and breathe data, only 5% of retail and consumer packaged goods (CPG) enterprises qualify as data-driven. If you’re in that category, here are some D2C data strategies that can help you become more data-driven.
A Data-Driven Culture: Ensure every move you make is fueled by data. Invest in data science talent, growth experts, and analysts who can parse through the numbers and make informed decisions. Create data-centric goals and track KPIs that deliver value to your business. If the data mountain becomes overwhelming, invest in the right tools for your tech stack that’ll cover all your needs.
First-Party Data: One component of success for D2C brands is their access to first-party data. This can be collected directly from customers to create personalized experiences. Only ask for information that will ultimately serve the customer. Then, integrate and augment that information with other data sources to drive your business objectives.
A third of U.S. consumers plan to do at least 40% of their shopping from D2C companies in the next five years, and 81% say they’ll make at least one purchase from a D2C brand within the next five years, Diffusion found in its “2018 Direct-to-Consumer Purchase Intent Index.”
Here’s how D2C brands deliver experiences that keep shoppers loyal.
Perfect Delivery: D2C brands like contact lens maker Hubble improve the purchase experience by controlling the supply chain. Own the delivery experience by offering no-fee returns and customer-driven fulfillment. Invest in new delivery models like robotic warehouses, partner with delivery platforms, and redefine the role of your store to increase flexibility and manage last mile delivery more efficiently.
Make Unboxing an Experience: Use your packaging to establish brand affinity and affection. Create a memorable unboxing experience by using your customer’s name whenever possible, adding a sample gift to your packages, or designing ‘Instagrammable’ packaging. When designing your packages, keep your target audience in mind and reflect your brand’s identity in its color, logo, typography, and voice.
Sell a Lifestyle: D2C brands focus on experiences to build customer loyalty. Sell a lifestyle by demonstrating the value your products bring to your customers’ lives. To nail this strategy, understand what your customers want to achieve and tailor your brand to this experience. Figure out how your brand fits their lives and showcase this relationship in an engaging and authentic.
Storyselling is a great tool D2C brands have in their arsenal. This retention method lowers customer acquisition costs and allows D2C brands to acquire customers with higher lifetime values. Below are some tips for using storyselling to engage customers.
Identify Your Narrative: Find your brand’s narrative by questioning why your brand exists and what its aim is. Flesh out your story and determine what’ll resonate most with customers to form an emotional connection. Your narrative should align with your customers’ values and support your stated goal of fulfilling theirs.
Use Storyselling Platforms: Use story-driven platforms like Instagram and podcasts to market your products. D2C sock company Bombas says that in any given week, 50-60% of their customers come from podcast advertising.
Using video? Get familiar with the best practices to engage your audience.
Turn Viewers into Customers: Show consumers you understand them by beginning your social media stories with questions and encouraging them to share their experiences. Incorporate shoppable videos into your strategy with a strong call to action and links to buy your products.
Communities Drive Loyalty
A strong community is critical to the survival of D2C brands, as it helps brands connect to their consumers on a deeper level, nurtures advocates, and drives sales. 38% of consumers buy from brands that give them a sense of community. Here’s how D2C brands create and cultivate their communities.
Content: D2C brands use content to keep customers engaged before and after making a purchase. To pull customers into their lifestyle-product narrative, luggage brand Away, created Here, a travel magazine featuring essays, travel inspiration, and city guides.
Position yourself as a trusted resource by producing educational, inspirational, and valuable content. Don’t just rely on your products to drive sales; form deep connections between customers and your brand by sharing meaningful stories from community members and delivering content that generates two-way conversations which foster loyalty and trust.
Social Media: Use social media to build an engaged community by focusing on uniting superfans, promoting user-generated content, and encouraging peer referrals. Make members of your community feel recognized and special by collaborating with them to create products through social media. Glossier hosts a Slack channel where its most devoted shoppers can provide feedback on the latest releases.
Values: Consumers feel at home with brands that resonate with their core values. Understand which values are important to your customers and see how they align with your own. Clearly articulate your principles, highlight them at various customer touchpoints, and prove your integrity by folding them into the products themselves.
Learn a Thing or Two
D2C brands are flipping old marketing strategies on their head and connecting with today’s customers in a much more personal and accessible manner. To enhance your business, consider adopting the D2C innovative mindset by investing in R&D to help improve the customer experience. Keep your eye on your customer acquisition cost and lifetime value, focus on emotive branding, and develop products and experiences that build lifelong customer loyalty. Although still fresh on the scene, D2C brands are transforming the marketing industry, and creating strategies worth learning from.