By Julio Lopez: Director of Client Strategy, Retail Practice Lead
For almost every consumer industry, 2020 was a difficult year, but some brands were in a better position than others to weather the social distancing restrictions that limited in-person shopping. Notably, direct-to-consumer (DTC) retail brands–digital native companies with no or very few brick and mortar locations–found that what made them successful before the pandemic allowed them to quickly shift focus and manage uncertainty.
Now that the worst of the pandemic is hopefully behind us, it’s time to take a look at how consumers and agile DTC brands will react to a healthier, safer world ahead.
A Roller Coaster End to the Pandemic
There is now light at the end of the tunnel, as vaccine efforts are succeeding in most countries. While COVID-19 case numbers are still fluctuating, they are trending downward. That may signal rough waters for DTC brands that have relied on digital adoption, but consumers aren’t rushing into stores any time soon. eCommerce is expected to increase to 15% of total retail sales in the United States while the U.K. will remain hovering around 28%.
DTC brands still have a captive consumer audience, but they also have new competition from large retailers throwing their full marketing and logistical weight behind online sales. The small marketing teams that power DTC sales are now competing against an overcrowded online marketplace and need new strategies to increase sales and retain customers, and make brand loyalists out of the new customers acquired during the pandemic.
Winning DTC by Delivering Uncommon Value
Value goes beyond price, especially for niche DTC brands that create high-quality clothes, bedding, beauty supplies, and more. Many DTC retailers rely on brand authenticity, a sense of community, and high-quality goods to compete online.
The specificity of DTC brands will help them as stores begin to reopen and people begin to once again explore the outside world. While large retailers can and will provide a traditional shopping experience, people still want the kind of excellence DTCs deliver. A recent senior marketing leader survey found that 30% of CMOs said their customers now expect “superior product quality.” Online retailers should lean into email and mobile campaigns that highlight the exceptional nature of their goods and services.
Partnering with Customers to Deliver Social Value
Many direct-to-consumer brands are digital natives that were founded on a great product mixed with social value. That authenticity became a key stake in the ground for retailers that were marketing to Millennials and Gen Z, 2/3rds of whom “think brands should take a public stand on important social values” and half of whom believe that companies should spend money on causes that align with their social value.
DTC marketers can spend 2021 reinforcing their brand’s authenticity and social value by creating email and mobile campaigns that keep customers up-to-date on money donated to social causes championed by the organization. If a percentage of sales goes toward charitable work, year-in-review campaigns can show the total amount of their purchase price that went towards nonprofits that year.
Creating Virtual Community in Uncertain Times
While most experts are optimistic about vaccine efforts and low case numbers, the COVID-19 pandemic is far from over. Most people are still stuck at home and many continue to replace real-world experiences with virtual ones. Direct-to-consumer brands build partnerships with their customers by offering events that enhance the purchasing experience and create a sense of community. Activewear brands are hosting online fitness classes, while beauty brands offer live tutorials to customers on social media.
This year, marketers have the opportunity to replicate the communal purchasing experience through email and mobile campaigns as well. With everyone shopping virtually, people want a human touch to reinforce their purchase decision. Abandoned cart campaigns can dynamically feature real-world reviews or the number of times a product was viewed in a week. Similarly, pulling in social proof elements like Instagram feeds or even real-time inventory levels can signal what other like-minded consumers are shopping for, thereby eliciting a conversion.
Matching High-Quality Products with Superior Personalization
DTC brands are often known for their exceptional products, with attention paid to every detail along the way. While it’s not a tall ask of consumers to pay more for better quality, it does require more marketing touchpoints and creative content that incorporates personalization. Epsilon and GBH Insights found that 80% of people want personalization from retailers.
Once considered the domain of large enterprises, even small marketing teams now have the power to create stunning 1:1 communications at scale. Whether your customers are shopping on an app or their laptop, email and mobile marketing data is now so sophisticated that nimble marketing teams can quickly create advanced personalization based on data and consumer behavior. All it takes is the right tool to transform existing data into stunning visuals that connect customers to the brands they love. Digitally native brands tend to outperform traditional retailers because they were born online, so they do not have to deal with archaic data silos. This advantage won’t last for long as traditional retailers increasingly invest in CDPs, so now is the time to take advantage of this competitive strength.
For more information on how marketing teams of any size can create meaningful 1:1 experiences, download Movable Ink’s eBook Best-in-Class Personalization Across Email and Mobile.
Julio Lopez has worked across multiple Mar-Tech SaaS companies whose integrated solutions focused on driving digital innovation for retailers, including Cheetah Digital, RevTrax and Eversight. During his tenure at these organizations, he worked closely with brands like Men’s Wearhouse, Cost Plus World Market, Hallmark, Sherwin Williams, and Carrefour. While at Experian CheetahMail (now Cheetah Digital) he worked on strategic email program development and deployment. At RevTrax he worked closely with the executive team to manage the evolution of the product, define go-to-market strategies, and led the Customer Experience organization. Julio also helped establish and lead the penetration into the European market for Eversight, whose software helps drive pricing and promotion strategies for retailers.