Over the last few years, brands have been digitally transforming themselves to become more customer-centric. A big part of that effort has been an eyes-closed, headfirst dive into the direct-to-consumer (DTC) pool. Brands big and small have prioritized their own shopping experiences in hopes of amassing first-party data and reclaiming some of the margins sucked up by major online retail platforms like Amazon.com.
But is DTC the summit of the mountain? Or, in their effort to wrest back control of their customer experience from Amazon, have brands overcommitted to it? The short answer is probably yes, not least because ultimately, it’s customers who are really in control of where they buy. They are going to shop where they want to shop, and there’s not much a brand can do about it.
To understand why the push for DTC goes off the rails and how to get it back on track, let’s start with the three major myths about direct-to-commerce efforts:
Myth #1: Your most loyal fans shop on your DTC site. I hear this a lot from brands I work with. The idea is that even if your customers start out shopping on a place like Amazon.com, they will eventually migrate to shopping directly from you. This is almost certainly false. If a shopper is happy with the fast and convenient experience on Amazon (not to mention the fact that reordering is extremely easy on the platform), it’s unlikely that much migration will occur.
A smarter strategy is to play well on all platforms. If your customers prefer to shop on Amazon.com, your presence on the platform needs to be as robust and supportive as possible. Don’t skimp. Take advantage of tools for educating and engaging shoppers, like video and Brand Stores. Even if the experience cannot be completely customized, it can still offer a lot to a brand that invests in it.
Myth #2: First-party data is gold. Of course, acquiring first-party data on your shoppers should be near the top of your priority list. However, first-party data is only valuable if you have strategies in place to use that data, and let’s be honest: many brands don’t.
Instead, keep your eye on the prize. Data is not sales. Your goal is to maximize customer lifetime value by enabling people to discover and purchase your products wherever they want. Today, 63% of people in the United States begin their product searches on Amazon, and a growing number of them are ending them there too. Going after data at the expense of new customers and revenue is an obvious miss. You should do both and optimize your efforts where it matters most.
Myth #3: DTC provides a better experience. This is a bold but highly questionable assertion. Unless you’re willing to spend like Nike on your DTC experience, chances are you are probably not creating a better experience for your shoppers than they’ll get from Amazon.com. Instead, make sure your owned properties integrate seamlessly with what customers are doing on the platform. Provide additional content, support high-consideration purchases and make sure that once your customers have your products in hand, they also have all the advice and support they need to make the most of them.
If you want to create a truly customer-centric experience, you need to hand over the remote. Your customers are the ones in control. If you want to optimize every touch point in their customer journeys, you need to support their choices along the way, including where they want to shop. DTC can be a highly efficient channel and first-party data is a valuable commodity, but keep your eye on the prize. Your real goal is maximizing customer lifetime value, and you don’t get that by dictating terms to the very people who want to buy your products.
Steve Klinetobe is Chief Creative Officer at Netrush. He is the mastermind behind Netrush’s creative teams, leading the direction of the company’s Studio teams. Connecting the dots between creativity, storytelling, and data, Klinetobe supports brands by helping them extend their stories and brand identity to the Amazon marketplace. He has more than two decades of experience leading companies and directing campaigns for clients including Microsoft, HP, Disney, Nike and Sony.