Direct to consumer (D-to-C) as a business model has always been around. We’ve seen it from the street sellers to the door-to-door salespeople who knew us by name and preferences. In current times, D-to-C refers to brands selling directly to consumers rather than the more traditional approach of selling through retailers.
The D-to-C business model no longer only represents the value proposition for brands. It now also encompasses the tactics that they have creatively employed to grow their market share (while tailoring to each individual market’s preferences). These tactics are lessons that all brands can learn and apply to their business model.
Amplifying Social Media Presence
Twenty-eight percent of internet users globally discover brands/products via ads on social, and another 43 percent research products via social networks. This means that social media platforms like Facebook, Instagram, Pinterest, LINE, TikTok, Xiaohongshu (RED), or WeChat are the first touchpoints with the consumer (instead of a Google search). Therefore, it’s key that brands apply learnings from D-to-C brands to their overall strategies.
One example of this is Nike, which amplified its 165 million social media followers to grow its D-to-C commerce revenue, accounting for 33.1 percent of its total revenue in 2020. Other well-established brands have also jumped on the bandwagon to utilize social media hashtags or encourage consumers to post reviews of their products. L’Oreal utilized TikTok with the hashtag #LetsFaceIt challenge to destigmatize mask wearing and garnered nearly 17 billion video views, becoming one of the social platform’s best performing campaigns of 2020.
Dynamic Online Assets
D-to-C brands need to generate a greater variety of marketing content and improve the content seen on their e-commerce websites. This means creating a marketing content ecosystem that fits different social media platforms, including repurposing content for each platform and market. D-to-C brands must also ensure they produce top-notch product photography to entice consumers to purchase.
Australian D-to-C mattress brand Koala (which launched in 2015 and hit $13 million in sales in its first 12 months) created a variety of engaging imagery to go along with its D-to-C e-commerce website, such as unboxing videos, Facebook ads with clickable headlines like “Man buys Koala mattress just to get their ads out of his f—king newsfeed” and several other unconventional videos like “Can your mattress do this? – Zero disturbance test” that garnered more than 1.5 million views. Koala’s marketing content is a mix of product feature imagery as well as unique and amusing content intended to grow its social media following.
One of the benefits of D-to-C brands having full control of their content is that it’s easier to manage via an agile content development workflow and robust content management system. It also makes it easier to understand the preferences of the consumers interacting with the marketing content and to tailor future marketing campaigns for them.
Focus on Physical Packaging
A huge part of the consumer experience is when they finally receive the much-awaited package in their mailbox. Many D-to-C brands design packaging that creates a memorable unveiling experience for the consumer. This provides an additional opportunity for brand followers to share on social media platforms. Some brands have further reinforced this behavior by providing additional prizes for consumers who share their photos of the product and tag the brand in their social media posts.
One example is skincare and makeup brand Glossier, which started as an online beauty blog and has grown into a $1 billion brand in just a few years solely through online channels and viral content that’s built up an engaged online following. Glossier’s physical packaging is minimalist, complements each other when placed side-by-side, and is packed in pink bubble wrap, making very social media-friendly content. This allows Glossier another channel to gather consumer feedback easily and engage directly.
According to psychologist George Miller’s research in the 1950s, the optimal number of choices one can process at a single time is seven (plus or minus two). As consumers, we love personalization and options, but too many choices often slows the purchasing journey down. Quizzes to create personalization without overwhelming the consumer is one method D-to-C brands have applied to avoid the paralysis of too much choice.
D-to-C skincare brands like Yours have simplified the ordering process by giving consumers a personalized quiz on things like skin type, lifestyle, environment for the consumer’s skin concerns, then recommend a formula tailored specifically for users’ skin concerns. The consumer is happy that they get a tailored skincare product instead of having to search through multiple skincare brands with the most suitable ingredients for their skin.
One example of a B-to-C brand applying this to D-to-C concept is Mondelez, which launched oreo.com, where consumers can personalize Oreos’ colors, flavors or even add an image/text on the cookie. The website also includes recipes and ideas on how to incorporate Oreos into desserts and collectibles. The personalization engages consumers and provides unique content for consumers to post on social media.
Subscription-based D-to-C brands like Perk Coffee or Hook Coffee are good examples of simplifying the purchase process for busy multitaskers. Consumers can choose the type of coffee they like and ensure the beans are ground to fit the way that they drink their coffee. If they struggle with choosing, they can request to receive a new flavor with each delivery and choose their delivery schedule based on their consumption.
The subscription model has also gained traction for learning-based D-to-C brands. KiwiCo and Little Passports (with similar concepts in Asia like Big Book Box in India, or Atom and the Dot in Malaysia) have won over the busy parent who may not have the time or expertise to curate age-relevant themed activities for their kids. These subscription boxes support busy parents while providing opportunities to bond over shared activities.
Amplifying Brand Purpose
For many D-to-C brands, the brand purpose and mission are the most important part of their strategy. This has been especially true for menstrual care products like Diva and Freedom Cups, which have become synonymous with the goal of improving women’s menstrual experience. The mission to find a more comfortable and environmentally friendly option for women has led to better brand awareness and an increased and committed worldwide following.
Several D-to-C skincare brands have also put social responsibility at the forefront of their messaging. Krave connects with consumers about the importance of simplicity in skincare, and Rooki Beauty has developed products that are clean and use superfoods. By focusing on brand mission and purpose, D-to-C brands have to work much harder than most B-to-C brands to not only win sales and market share, but also to promote and educate the market on their unique brand missions.
Enhanced In-Store Experiences
In recent years, fully online brands have moved towards physical retail. Iuiga (which started as a purely online store in 2017) has opened shops so consumers can see key products and purchase certain items in-store. These in-store experiences aren’t meant to compete with Iuiga’s online focus, but rather enhance the brand in the mind of the consumer.
Winners in the B-to-C to D-to-C conversion race have also utilized physical stores to enhance the interaction they have with consumers in other areas. Nike Rise in Guangzhou, China is a place where visitors are able to use the Nike app while in-store to sign up for local soccer matches and running clubs.
There’s a lot that traditional brands can learn from the D-to-C trendsetters of the world today. D-to-C brands have used their deep understanding of consumers’ needs to enhance their buying experiences. This isn’t an easy feat as it takes place in the overcrowded noise of the online marketplace. However, successful D-to-Cs have worked hard to hook their customers, developing a level of loyalty often unmatched by traditional brands.