Before the internet and online shopping boom, many brands mostly relied on brick-and-mortar stores for sales. These were the boutiques, department stores, supermarkets and other stores that sold products from different brands. This meant brands had to have another business act as a middleman to sell their products. They could take steps to advertise their product, but who they were targeting and how the product was sold were very limited.
But with the rise of eCommerce and online shopping, brands have found it easier to eliminate the middleman and skip distribution channels to physical stores. As a result, direct to consumer (DTC) marketing has become a popular way for brands to sell directly to customers, improve customer experience and create personalized marketing campaigns.
Skyrocketing in 2020, DTC marketing becomes increasingly popular as brands take advantage of eCommerce opportunities. Here’s what you need to know about DTC marketing, how it benefits your brand and why creating a DTC marketing strategy can boost your brand’s visibility and sales.
What Is DTC Marketing?
DTC marketing is a way for brands to target, market and sell their products to customers. This is opposite to the old way of selling, where they relied on retailers like boutiques, malls and supermarkets to sell and distribute their products.
To better understand what is DTC marketing, let’s compare it with the typical selling process before the eCommerce boom. In the past, working with retailers was the only viable solution for brands that couldn’t establish physical stores.
But unfortunately, this method posed a lot of challenges for brands.
• Marginal profits: Brands had to provide discounts to retailers so that they would put their products on the shelves. This arrangement meant that profits were marginal for brands while retailers sold them to consumers at a marked-up price.
• Long production times: It took time to create new products because they also had to convince retailers to buy their products. And third, brands lost control over how their retailers sold their products, their marketing mix and their branding.
With a DTC marketing strategy, brands could now skip the middleman and the challenges their selling and distribution model posed. After online shopping and eCommerce became more common, brands could now target, market, sell and distribute their products directly to the consumer, either through their online store, a pop-up store, a physical store or a combination of these options. This proved to benefit both brands and customers.
Benefits of DTC Marketing
Brands that used a direct to consumer marketing strategy found many benefits for their business and customers. Some of these include:
• More control over their marketing, sales and distribution. Brands now fully control their brand management. DTC brands don’t have to worry about retailers putting their competitors’ products beside theirs.
• Better insight into consumer behavior. Brands could only sell to retailers, so their first-party data was limited to what retailers got from them. By selling directly to consumers, brands could offer a wider range of products and see which products sold better than others.
• Lower operating costs, additional profit and promotions. DTC brands could sell online and through their own physical stores, which lowered the markup added to their goods. In turn, brands could either turn this into extra profit or provide lower costs to consumers. Brands could also have their own promotions, sales and discounts, rather than having no control over the retailers’ promotions.
• Stronger brand identity. Since brands now had control over the selling process, they could now build brand identity rather than being one of many products available from a retailer. This can be done through email marketing, social media and other brand marketing strategies.
• Greater customer experience. Brands have the choice of creating their own physical stores or selling online. Doing this allowed them to curate their stores and have more control over their customer experience.
• Personalized marketing. With more control over targeting and marketing, brands can personalize marketing campaigns to fit their identity and the market they want to target.
DTC Marketing in a Post-COVID World
While using eCommerce and a direct to consumer marketing strategy existed before the COVID pandemic, its exponential boom can be attributed to the pandemic and the lockdowns. Before the pandemic, more brands either adapted a fully DTC marketing structure or explored hybrid options.
But once the pandemic started worldwide lockdowns, retail as we knew it had to adapt. This was around the time when businesses started to focus their strategies outside of retailers but online. In addition, eCommerce in the United States went up 43 percent in 2020. This increase meant more brands were exploring marketing and eCommerce options rather than sticking to retailers who now had little to no consumers going to their physical stores.
Two years later, however, physical retailers are up and running once more. However, consumer behavior isn’t going to revert to exclusively selling with retailers. Instead, more consumers have adapted to shopping online, while other users use both online and offline stores. In fact, 81 percent of those who prefer to shop in physical stores start their buying journey online by doing research. This is a significant increase, up 20 percent from the previous year.
What this means for DTC brands is that, whether they choose to continue working with retailers, establish their own physical store, sell online or do a hybrid of the three, they have the option of controlling their brand identity and digital marketing campaigns. This allows brands more ways to reach consumers.
“Consumers have choices,” said Jimi Gibson, Thrive’s Vice President of Operations.
“Offering a combination of online and offline experiences puts the decision in the customer’s hands,” Gibson said. “With challenges in staffing brick-and-mortar locations and the limited availability of space to merchandise all inventory, the online approach is attractive for many reasons.”
“Distribution flexibility is also an advantage for online sales. When customers have choices, an integrated approach by a retailer is going to allow a consumer to shop the way they want. If you are missing the DTC Marketing approach, your competitors will have a serious advantage over you.”
DTC Marketing Strategies To Grow Your Brand
Developing an effective direct to consumer marketing strategy can vary depending on brand identity, marketing goals and previous digital marketing campaigns. Some ways to grow your brand online include:
• Building your brand identity. One of the challenges of eCommerce is that your competition goes from the other brands your retailer sells to any other brand in the world that can ship to your target audience. Creating a strong brand identity sets you apart from other small brands with similar products of lesser quality. It also helps customers recognize your brand and products apart from every other brand.
• Analyzing marketing data. Take advantage of the consumer data you can collect from your website, eCommerce platform and other first-party data sources you have. This can give you interesting insights into the customers you attract and what your strongest products or digital marketing campaigns are. From there, you can adjust and develop your digital marketing strategy accordingly.
• Create personalized marketing efforts. One of the benefits of being a DTC brand is that you can curate your products and build close connections with customers.
“The ability to control the long-term relationship through email, SMS and the personalization of the consumer journey are important parts of a DTC Marketing approach,” Gibson said.
“Establishing that relationship is the differentiator.”
Through personalized marketing, remarketing and other digital marketing campaigns, you can create ads and DTC marketing strategies tailored to customers’ preferences.
• Creating an active social media presence. It’s best to hire social media experts who know how to foster customer relationships, improve customer experience and create engaging content. Not only is social media advertising an outlet to advertise, but it’s also a way to engage with customers and provide customer service to those planning to buy, as well as after-sale service.
• Work with email marketing experts. Email marketing is still an effective way to deliver personalized marketing, improve customer retention, build customer relationships and provide exclusive offers to people at different stages of their buying journey. Working with email marketing experts can help you create engaging and effective copy to attract customers to your online store.
• Market to former and lost customers. Don’t forget users who abandon their shopping carts or customers who have already shopped at your store. Studies show that the cost of nurturing repeat customers and remarketing to lost customers is only a fifth of the cost of attracting a new customer. That’s why you should take steps to improve customer retention and improve customer experience by fostering a good customer relationship.
How Thrive Can Help DTC Brands
DTC brands have the freedom and flexibility to curate their brand and market directly to consumers, but this comes with its own challenges. Online, smaller brands have to compete with bigger businesses while also standing out from other small to medium competitors. This can also extend to building a customer relationship with every customer, creating loyal customers and developing a recognizable brand. This is where Thrive’s services can help you with brand management and standing out online.
Through a customized campaign, Thrive can help DTC brands step into the spotlight online. Our team of digital marketing strategy consultants, social media experts, search engine optimization specialists and other digital marketing professionals can boost brand visibility and awareness, increase your lead generation and build strong customer relationships that turn into sales and improve customer retention.
Work With Thrive’s Digital Marketing Strategy Consultants
At Thrive, our team understands the needs of online and offline businesses to stand out from their competitors. Let’s build your online presence, create a lasting customer relationship with users and create a DTC marketing strategy that sets your brand apart for relevant users looking for your products.
Get in touch with our team today for a free consultation and to learn more about our services.