Synopsis: According to the research, by 2023, it is assumed that over 80% of the buyers will purchase the product from the DTC brands. For the industry, adopting the same process might be good fortune in the future. This is exceptionally shocking and awesome at the same time. So what are the circumstances making the consumers convert into DTC brands? Also what are the blunders that are causing damage to the traditional markets? In this feature, we’ll try to figure out the answers behind every question.
Contents
Introduction to the ‘DTC brand’ (direct-to-consumer)
Shedding light on the shift to Direct to consumer
DTC Benefits for buyers: Why do buyers want to purchase directly from manufacturers?
DTC benefits for sellers: Why do sellers want to sell directly to the consumers?
How can digital revolution help the DTC Shift?
Examples of Successful DTC Brands
Introduction to the ‘DTC brand’ (direct-to-consumer)
In the survey of 2020, it has been found out that U.S. online business had dealt with 8.8% in the general retailing. This is also an increased version from 2018 i.e. 6%. As a result, it can be seen that during the last few years, the journey for DTC brands has been like showbiz. This has thus helped the companies to increase in the production and selling margin.
DTC brand or “direct to consumer” is a model connecting with the shopper straightforwardly as opposed to using a middle person’s services.
Although, it has been observed that the sales via DTC brands is like a tortoise speed. But the growth can be clearly seen i.e. 57% in 2018 to 25% in 2020.
The circumstance of this shift is like no occurrence. Buyer’s shopping has been inclined to gradually evolve. The advancement has changed the external process from physical appearance to showcasing through mediators and services to the clients. This has also changed the internal procedure from the investment to the type of mediators.
With Coronavirus persuading genuine stores to be closed, the essential for online retail has never been significantly clearer. Due to this, the majority of the DTC brands were built on the internet. And this is the time when the revolution for ‘direct to consumer’ model has started.
The pandemic changed the complete scenario and technology played a vital part in marketing. The digital marketing then started targeting the youth audience, later followed by the startups to counterpart. The effect of the DTC brands is the current brands be it big or small are building their own stores. They are focusing on making direct channels to move closer to the purchaser.
Shedding light on the shift to Direct to consumer
The journey of the DTC brand started in 2010 at the time of Warby Parker’s achievement. This shift has been driven by new companies that are diverting significant affiliates for dispersion.
Warby Parker experimented to go through digital marketing and dealing end to end relationships with customers. This strategy has made the company a huge success and entered into a $1 billion club within 8 years.
Similarly, seeing the process of Warby Parker, the other companies like Bonobos or Glossier followed the same path. Demonstrating their main goal, qualities to be significant; propelling them via relative framework.
Companies started to grab the control of the experiences and successfully tapped into reality. People began to feel their importance as consumers and accordingly brands started speaking their language.
In 2016, the famous footwear company Nike commenced following the same footsteps. According to them, their objective is to double the profit and grow the potential by 2020. The firm has projected the efforts and achieved the goal through its website development.
Not only Nike or Warby has changed the legacy but the others like L’Oréal, Gamble, etc. are also practicing the same. This is the right time to alternate the shift to the DTC brands due to the current environment.
It provides knowledge for the benefits of important digital execution, client promotion, products and services, and hyper-personification inside an adaptable advanced environment that demonstrates productivity after some time.
The traditional market is also adopting the trendy DTC model. They are doing this to save their goodwill and extension of revenue.
DTC Benefits for buyers: Why do buyers want to purchase directly from manufacturers?
Today, 55% of customers like to shop straightforwardly with brand makers over retailers. Therefore the result of the DTC has proved a game changer for marketers. Let’s know the fact why consumers want to buy directly from manufacturers:
- Direct term– Buyers want a direct connection with the seller to build a strong relationship with the brand and product. This also helps to know your favourite product elaborately.
- Avoids counterfeit- Purchasing straightforwardly can avoid the danger of purchasing fake products. The guarantee of originality will always be their primary service.
- Hidden gems– Consumers can now know the perfect knowledge of their choice product. They need not worry about missing the important facts through retailers.
- Acknowledgement– The information given by the seller will always be updated and authentic unlike middlemen.
- Customer support- The user wants to sort out the issue of their favorite product anytime with worthiness and these models can resolve it. They will claim to give skilled and experienced experts in just one dial.
DTC benefits for sellers: Why do sellers want to sell directly to the consumers?
At the commencement of April 2020, a mask and toiletries company of bad quality found out that their business suddenly saw an increase of 70%. Whereas their competitors selling better quality products have also witnessed an increase similar to the bad quality shops as 75%. Meanwhile, they had collected an order for 10,000 products.
Similarly, the e-commerce websites like Amazon found out that their product has a demand in the hype. The market then watched the differences and planned to start their chain seeing the situation. They even thought of producing in such a way that could cut off the price charged by e-commerce as a third party.
From the above lines, there is surely a way of why companies are switching towards the D2C model. Apart from the excess cost, other factors helped the organization to find this formula easily applied and easily progressive.
- Short success: with zero retailers in between client and company, the supply chain is one step forward. This allows companies to have full control over their customers and convert them into buying a product. They build up a relationship by telling each detail to the purchaser and hence know the entire journey.
- Reduce time: In addition to the zero retailers, there is a freedom to act independently and bring the products faster to the markets. Companies now can also take direct feedback from their loyal customers and change things accordingly. This will help the companies to have everything in command and trends on track.
- Build-in-up relationship: any person interacting with others builds a connection. Similarly, any customer contacting a store, talking directly to the seller also builds a relationship. Cutting off the middlemen will forge the relationship between you and the company directly. This will keep the goodwill long-lasting and trustworthy.
- Sovereignty: Sometimes retailers do have their guidelines unlike direct to consumer. They can be biased with your product and later might divide the focus of your brand completely. With DTC, your company can plan the strategy, budget, location, hiring, and everything according to the specific demand and can deliver the creative ways for best results.
- Digital dominance: this model needs to grow digitally. For digitally, it is also relevant to plan strategy as per the internet marketing scenario i.e. social media. Digital advertising is trendy, powerful yet comfy with making the plan of action. It can target all age groups from children to elders and will be fun getting a great return of investment and chances of high payback.
- Surplus of subscription: this is the fastest growing scheme in the direct-to-consumer model. For the creation of a consistent revenue and retention focus, DTC is typically subscription-based. This will accomplish the model and thus say yes to success.
How can digital revolution help the DTC Shift?
Today every organization is focusing on the statement of interacting with customers on a one- one basis. In this journey, the role of ecommerce (website/apps) and social media is huge and without it, it isn’t possible to crack the deal.
- Website/apps– a well-designed and planned app or website can change the picture of the marketing film. It is a key to win-win any successful business.
They can have access to the website designing and sales as per the current situation. Customers can now watch out for different categories under one roof. It has the benefit of reaching out anywhere, anytime. Even if the client does not buy from it, it has a chance of getting back or building a relationship.
- Social media– social media is the opportunity to increase any business simultaneously. Even most of the top commerce websites are trading with social media to get expansion. Recently, more than 56% of businesses gained profit through social media.
Along with Facebook, Instagram as top notch social media; WhatsApp is also now catering to the businesses. Study shows more than 40% of the industry grows through Facebook and around 13% of the business increased with Instagram. Organizations are not only dealing with apps or websites, they are also making money with social media.
Examples of Successful DTC Brands
Below are some of the brands listed in the DTC model that won the trophy of victory in the industry. They not only followed the path like Nike or Warby, they had also achieved a never-ending business.
- Burrow– Burrow is the chain of fresh furniture lines. The tagline of motto “the luxury couch for real life” sells the quality home décor in no seconds.
- Hyphen sleep– apart from the mattress companies like Casper or Leesa, Hyphen sleep too aced the product by making innovative design and best quality products within price.
- 4ocean– 4ocean is a perfect example of the ‘subscription based’ model. They not only used the model for the long term but also pulled off the fresh idea of utilizing a process. It is a bracelet association that cleans a pound of waste on each purchase.
- Nespresso– this café chain is one of the most experimenting yet stylish models in DTC brands. It offers consumers to taste every variety of their coffees before purchasing in their machines.
Inference to the DTC brands
There are plenty of reasons on brand’s choose to switch or possibly be corporate with D2C into their present plan of action. Having a retailer or distributor will never be a great option for any business deal.
A lot of manufacturers make the product according to the customer’s taste and present market. They are always in a competition to satisfy the needs, personification, products & services for the clients.
For all kinds of startups or big brands, it needs to maintain the graph of the customer experience end to end. From customers entering into your store or sites to converting into a loyal buyer.
Hence, from the DTC model, companies can meet the demands of the customers and build a stable relationship in the long term amongst a competitive crowd.
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