Direct-to-consumer (DTC) brands have fared well during the COVID-19 crisis, and that trend will likely continue, at least for the near future: 24% of consumers say they’ll be more likely to purchase directly from a brand’s web site once their respective state and national restrictions lift, while 9% of shoppers are now more likely to purchase from a DTC brand, according to recent data from Scalefast.
However, not all habits have changed from before COVID-19: 17% of shoppers expect more insight into how retailers operate, which is in line with findings from an earlier Scalefast survey. That study revealed that 30% of consumers would be more likely to purchase from a DTC company if the product was sustainably made, while 18.24% would be more likely to purchase from a DTC if the company had a cause-oriented mission.
“The best D2C brands driving the industry — the UNTUCKits, the Caspers, the DoorDashes — from day one tried to be as transparent as possible in their communication,” said Olivier Schott, Founder and CMO of Scalefast in an interview with Retail TouchPoints. “They tried to emphasize and market how they do things, how they produce or how they select their products. It’s not just for marketing purposes — you can feel that they believe in their actions. That’s their purpose.”
However, it’s worth noting that the particulars of what shoppers want to hear have changed in the months between both surveys: for the upcoming holiday season, 17% of consumers say they will only purchase from retailers with clear procedures in response to the COVID-19 outbreak, both online and in-store. Retailers still need to do good, but the emphasis now is on their own customers and workers.
New Shoppers Are Adopting, So Make The Process Easy
Schott described DTC as a “blurred category”: even though 19% of shoppers familiar with DTCs believe these brands are more likely to be ahead of or on-trend, and 14% believe them to be more technologically forward, 15.49% feel that it’s riskier to buy from a DTC brand than a traditional retailer. Brands with easy-to-use and comprehensive interfaces can reassure wary shoppers that their offerings are just as safe as those sold by traditional retailers.
“For DTC brands that are leading the way, the user experience is close to perfect,” said Schott. “Whether it’s on your mobile phone, your tablet, your computer or your TV screen, it’s a very simple, well-designed page. It explains what you’re going to experience and gives you an impression of what to expect, and the company’s best practices for everything.”
Companies with interfaces designed to reassure shoppers are well positioned to benefit from the current environment. Only 36% of consumers say they’ll be comfortable returning to stores immediately, with another 36% expecting to feel that way within six months and 20% in six months or longer. That means retailers and brands still have a significant window to showcase the convenience of DTC options and capture new customers.
Win Where You Can — Don’t Try To Beat Amazon On Price
While the surge in online shopping is giving DTC brands a chance to expand, established players like Amazon are still strong — and omnichannel retailers like Target and Walmart have been able to generate massive increases in online sales. Winning over new customers means competing in areas where smaller retailers can stand out, not trying to beat a massive supply chain, logistics network and store footprint at its own game.
“The advice you could give to any brand who wants to go direct is, figure out how you differentiate your retail message from the rest of the channel,” said Schott. “It’s not about competing on price — you want to give the best VIP experience to your core customer. In the long term they will continue shopping on Amazon, and that’s totally fine. What you need to do to differentiate yourself is to create loyalty with an exceptional user experience.”
The post-COVID-19 world is very different from what came before, and DTC brands can’t afford to squander this opportunity. Understanding how consumers’ needs have changed, while still offering a world-class shopping experience, can help brands earn a new generation of loyal shoppers.