Standing out in a DTC saturated market
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What’s been a leading factor behind DTC brands’ massive growth over retail for a few years?
Removing the middleman has long created a perception that a DTC brand offers better quality and lower prices. With less fluff to manage, prices remain competitive.
While it’s worked in the past, brands need to make some changes if they want to get noticed.
For those watching over the last decade, DTC has gone through various iterations.
First, there were practical advantages to shopping directly. Benefits like lower pricing and transparency created a better customer experience. Then came aesthetic-heavy branding and a rise in social media marketing thanks to being ‘Insta-worthy.’
When everything around us seems to be changing at warp speed, it makes sense that consumers place importance on more things than just affordability. So, what do consumers want now?
- Social awareness
- Purpose and value-driven business models
There’s a change on the horizon
For years, the four P’s of marketing have been product, place, price, and promotion.
With waves of other DTC brands emerging on the scene, a new set of P’s is taking hold and will mean the difference between standing out and getting swallowed up by the competition.
According to McCann Worldgroup, brands should be paying more attention to this:
- Personalization—through experiences and bespoke products
- Partnerships—collaborations with brands where it makes sense
- Positioning—creating a brand culture by combining experiences and narrative
- Purpose—driving a brand based on values
Still, the DTC market is growing, and many consumers are still learning what it is. One way to make sure customers know how your brand is different from traditional retail? Share the process in easy-to-understand terms.
Brooklinen, which sells high-quality textiles, shares the benefits of being a DTC brand. Aside from showing the consumer how it works, they also spell out why it’s beneficial.
After all, the customer often only cares about getting a good product at an affordable price and showing how shopping through a DTC brand makes this happen is a powerful visual.
Diffusion shares that 43 percent of Americans know at least one DTC brand. Of those familiar with DTC brands, 69 percent of them have bought something.
Another interesting point to consider? A quarter of consumers believe DTC brands at the forefront of what’s on-trend or considered ‘cool.’
Where does that leave brands today?
The way DTC has grown in the last decade is something everyone’s watching. Through these changes, brands of all sizes are taking note of what’s happening. This is what they’ve learned by watching the success of countless DTC brands:
- Consumers are more conscious now of where they spend money. Whether it’s through big-box retail or DTC, consumers want a good product at a price they can afford.
- There’s more understanding of how DTC works. Consumers are more willing to shop directly with a brand instead of going through retail stores. Why? Because of the perceived quality and lower prices.
Marketing can be powerful for DTC brands (when done correctly)
Choosing to go the DTC route over retail offers plenty of unique benefits. Connecting with consumers enhances the relationship needed for brand loyalty.
The ability to go in-house with marketing gives DTC a serious leg up over retail brands. How? They're able to create campaigns and packaging that speaks to consumer needs.
Combined with digital advertising, it makes sense how DTC brands have garnered even more attention over the years.
Okay, but what helps DTC brands gain traction?
Paying attention to these four attributes is key:
Nothing says convenience, like having a subscription to products you need to replenish.
Take, for example, Billie. This brand was able to touch on all attributes and stand out to consumers.
Aimed at Millennial and Gen Z women, this subscription service replenishes shaving cream, body wash, and razors for members and makes it convenient by sending a new supply monthly.
A personalized questionnaire at the start of the subscription helps consumers determine which delivery frequency works best and makes razor replenishment affordable.
Social marketing and word-of-mouth attracted users to set up a subscription and automate delivery.
Though still a new business model, many have changed since brands like Away or Warby Parker first emerged.
Retail isn’t going anywhere, and DTC is not done building momentum
How is this growth taking place? These trends are helping expand sales:
- Freebies—Whether through samples, trials, or discounts, DTC brands use freebies as a way to fast-track the relationship between brand and customers. Taking the leap and making a purchase (especially for new or emerging brands) is not done quickly in any buyer’s journey.
Offering discounts or free trials encourage prospective buyers to take action. How does that help the brand? As long as the customer lifetime value exceeds the freebie’s worth, it's proved a worthy strategy.
- Subscriptions—The convenience of a subscription creates a popular option for DTC brands (hello, customer retention!). Of course, it works when the product offered fulfills an ongoing need.
There's even more benefit to using a subscription model. Consistent data flowing in allows for deeper insight into the habits of customers. In other words, it helps brands tweak messaging or positioning to expand sales.
Retailers aren’t standing by idle, though.
Established retail brands want to get in on the action. Nike, for example, tested the waters by offering products through neighbourhood stores.
Some might say it's been a powerful shift—in 2020, the brand saw 33% of it's sales come from a DTC model.
As the market becomes more saturated over time, how do you stand out as a DTC brand? It starts here:
Develop brand awareness ASAP
Creating awareness is important, but how does that work with direct-to-consumer? It’s about creating a campaign that captures attention and keeps it.
Online advertising (which has increased as DTC popularity rises) offers brands a couple of key benefits:
- Builds trust and familiarity with the product
- Increases legitimacy in the eyes of the consumer
These two factors are important in getting the consumer to take the next step: purchasing. Another point to consider? Expanding brand awareness offers the opportunity to enlighten.
For example, CBD and CBD-infused products are growing across various verticals. Along with that growth comes the challenge of educating consumers.
House of Wise, a luxury CBD brand founded by Amanda Goetz, seeks to highlight CBD’s benefits while also creating a vibe that makes it feel accessible and consumer-friendly. A page of the House of Wise website is dedicated to highlighting data and benefits of CBD.
Goetz is taking her platform a step further by spotlighting the current drug policy in the United States and cannabis-related incarceration.
The conversation between recreational cannabis use and incarceration is a powerful one, and the acknowledgement from House of Wise is important for her target market.
Get more people TALKING + SHARING your brand
Social is where many brands take brand awareness to the next level.
Offering more than just pretty feeds and photographic experiences, social media plays an important role in helping a DTC brand lift off and get some much-wanted attention and hype.
Instead of creating content for your social media platforms for the sake of generating traffic, you must use the opportunity from the beginning to create that connection.
Building a following, engaging with customers, and staying consistent are three ways to use social media to your brand’s advantage and create positive awareness.
User-generated content (UGC) works well in this regard, too. Sharing content created by your customers:
- Further builds the relationship between your brand and the customer (who doesn’t love a shoutout from a brand?)
- Gives you free marketing content
Brand ambassadors and influences also help build momentum for your brand. Not all brands have the budget for influencers, though, and that's where UGC becomes even more valuable.
Another way to stand out?
Create a brand aesthetic that captures attention as users scroll through feeds.
OLIPOP, for example, uses eye-catching colors and graphics to stand out. Paired with a vintage vibe, this unique beverage has an Instagram-worthy appeal that gets noticed.
OLIPOP has also used a subscription-based model to attract and keep customers. Director of Customer Experience (CX) & Retention Eli Weiss (@eliweisss) shares this key takeaway:
Look for the gaps (and fill them)
As most are staring into screens for hours at a time, Eyetamins found an opportunity to create a supplement that bridges the gap between supporting eye health and offering protection against blue light emission.
Eyetamins positions themselves as ‘the first natural eye care supplement to directly address the modern-day needs.’
DTC products are often innovative or new to the market, which is why offering trials makes sense. Eyetamins offers a 60-day no-risk trial to customers.
Offering a no-risk option increases the likelihood customers will buy the product.
Another way Eyetamins speaks to customers? Encouraging visitors to take a short before purchasing. The quiz offers a personalized eye care routine to match consumers with the ideal vitamin supplement.
Experience is always going to be EVERYTHING to customers
One of the leading reasons consumers are more willing to try DTC over retail brands is the ability to connect.
Having that benefit of direct relationship building comes with responsibility. Want to make a difference? Give customers the experience they want (and expect).
Personalized content is essential in getting consumers to stop and take a look at your brand. Tap into your target market’s emotions if you want to drive conversions from social media to your website.
What DTC brands need to do NOW to stand out in a saturated market
Regardless of where consumers are shopping, some behaviors remain the same. They want acknowledgement and nurturing throughout the buying journey.
You don’t need to be a rocket scientist to figure out how to build momentum for your brand. It all boils down to being consistent and keeping your customers top of mind.
Here are four ways to do that:
1. Moving forward, the emphasis on branding over marketing is going to be key.
As the market becomes even more saturated, the ability to out-advertise competition will be hard and expensive—especially for new, emerging brands.
That’s where putting more emphasis on branding comes into play. Brands are realizing messaging and activity are driving consumer behavior over traditional performance marketing. Shifting budgets is key.
Trying to be everywhere all at once is not a sound marketing strategy.
Don't want to advertise on platforms like Facebook? It might be worth looking into depending on your goals. New brands have an opportunity where large brands don’t.
Looking for niche markets is key for new or small DTC brands. Consumers in these markets are often skipped over by major brands, offering smaller brands an opportunity to connect.
As always, the platform you choose needs to make sense for the target market.
Medium and larger DTC brands do better trying to keep up with emerging social media networks, such as TikTok.
2. Don’t rely solely on outside sources for your advertising.
It makes sense to use platforms like Facebook for advertising purposes, but don’t forget to emphasize the brand's website.
There are a few benefits for this:
- The brand isn’t at the mercy of advertising approval by Facebook, for example.
- There’s a decreased risk of you losing direct contact with your followers.
- Attracting consumers to your website offers an opportunity to take complete control of the brand (without worrying about outside channels).
3. Want a new way to market your brand? Try creating a mobile app.
As innovative as DTC brands are, there’s room for even more growth related to marketing and advertising.
Want to give customers an easy way to connect and buy from you? Create a mobile app to provide a single point of access to customers who wish to shop, engage, ask questions, or use interactive experiences to learn about new products.
4. Content might be king, but that email list is golden.
There are so many benefits to creating an email list full of nurtured, loyal customers.
According to a poll through Optinmonster, 60% of consumers shared they purchased an email.
And while social media is growing as a channel for marketing and sales, it’s still behind email in trust and credibility compared to email.
- Allow you to personalize and segment your market
- Gives up-to-the-minute metrics
- Drives traffic to the website
- Increase sales
- Enhance customer relationships
More innovative brands—or those with a younger target market in particular—might choose to connect with customers through text messaging as it allows for a personalized experience.
Bottom line: The best way to retain customers and boost sales is to provide various options that connect the brand directly with the customer.
The riches are in the niches
Even as the future of DTC grows and the market becomes more saturated, there’s still plenty of room for growth.
At one point, brands wanted to be everything to the consumer. Generally speaking, this meant marketing to the same demographic--middle and upper class, white, urban consumers.
And it worked for a while until it didn’t. Now it’s time for brands to look to the niche markets that these direct-to-consumer businesses have long glossed over and connect with them authentically.
DTC brands primed for success pinpoint exactly who the customer is and go all-in on that niche. For up-and-coming bands, it could be daunting to segment the market into a small slice.
But here’s the benefit:
- Though your segment might be smaller, your product’s overall lifetime value will be much higher.
- Customers who finally feel seen and heard are more likely to try products and build loyalty if they speak directly.
Stand out doing THIS
Want your DTC brand to stand out?
Be innovative. Get more personal. Look at your strategy as a whole when determining price points.
Being completely accessible in pricing isn’t the golden ticket to growth. Pricing below the competition might even work against you because consumers could equate that to a lack of quality.
- Search for ways to introduce your product to consumers while inspiring them to try other offerings.
- Use personalization and customization to direct consumers to the ideal product for their needs.
- Implement marketing strategies, such as email marketing, to know your customer and what they want. Use those metrics to learn more about how to serve them.
As we emerge from a global pandemic and yet another impact on the economy, it’s important to be in touch with what customers want (more than ever).
Again, it all goes back to perception. And perhaps the big picture of where you want your brand to go.