It wasn’t just Netflix that benefited from discovery during the pandemic. Global direct-to-consumer brands (DTC) reaped exponential rewards, especially from Millennial and Gen Z shoppers. We recently surveyed almost 15,000 consumers across 14 countries to better understand the global opportunity for DTC brands and found that more than half of the millennials surveyed (52%) made purchases online from brands located outside of their home country during the pandemic lockdowns.
This phenomenon did not occur as an anomaly in the U.S. — in other countries, the penetration of millennials engaging in cross border shopping was even higher. South Africa and India were tied for number one at nearly two-thirds (62%), followed by the UAE (56%) and China (53%). It’s equally compelling to note that millennials lead this new wave of global shopping at a rate three times greater than Baby Boomers.
All indicators point to this pattern continuing as “the new normal,” which means that brands, regardless of size, need a global DTC distribution and marketing strategy in order to remain competitive. A robust global catalog of inventory, paired with home currency pricing, and fast, inexpensive shipping will continue to entice the millennial and Gen Z consumers to purchase without regard to geographical location from the brands that market and ship to them the best.
Not surprisingly, social media is the catalyst for these clearly defined generational behaviors. The millennial and Gen Z demographic wants what it wants, and their buying patterns are often shaped by globally relevant celebrities and influencers. In fact, it’s been reported by Sprout Social that Instagram claims that influencers have driven almost nine out of 10 people to make purchases. They also report that 70% of “shopping enthusiasts” use the app for product discovery. With more than 600 million monthly active users between the ages of 18 and 34 on Instagram alone, it’s no wonder that influencers such as Huda Kattan (UAE), Chiara Ferragni (Italy) and the Kardashians (U.S.) inspire their many millions of followers around the world to purchase the products that they endorse directly from the brands.
The sudden proliferation of clean beauty and the explosion in skincare sales can also be attributed to the influence of social media. As CB Insights noted, “Millennials are three times more likely than previous generations to research new brands and products using social media, and 37% more likely to trust a brand after coming across a sponsored post about it.” This generation shows a higher degree of experimentation than previous ones, enabled to a greater degree by social media.
Our data showed that the categories which saw the most purchases across global DTC brands were clothing, footwear and skincare. Even traditionally more high-touch categories such as luxury goods, fragrances and cosmetics did exceptionally well with cross-border consumers. When Millennials and Gen Z consumers validate a product with their community of followers and influencers, the questions previous generations associated with ecommerce purchases — “what if I don’t like it” or “what if it doesn’t fit” — seem to evaporate. With generous and easy return policies, home country currency pricing and validation across social media platforms, the smartest DTC brands will continue to allay concerns for their consumers, full stop — regardless of geographical location.
Prior to joining ESW, Bousquet-Chavanne was CEO of Emaar Malls, owner of The Dubai Mall. He previously served as Executive Director, Customer, Marketing and M&S.com, for Marks & Spencer, helping drive the company’s digital acceleration. Prior to that, Bousquet-Chavanne was Group President at The Estée Lauder Companies, where he oversaw some of the company’s largest brands, including Estée Lauder and MAC, as well as the Designer Fragrances division. Bousquet-Chavanne holds an undergraduate degree from Kedge Business School and an MBA from Purdue University’s Krannert School of Management.