As its name implies, Direct to Consumer (DTC) retail seeks to appeal directly to consumers with a brand they will recognize and seek out. But as this part of the industry grows more crowded, DTC retailers are finding it tougher to make their mark. Overcoming this challenge requires DTC companies to leverage their advantages as specialty retailers in order to deliver highly targeted messages that lay out their value proposition, while also delivering a personalized experience that a broader marketplace simply can’t match.
“I think the biggest challenge is that the bar has gone sky-high now on delivering a good experience,” said Erika Strum Silberstein, President of Commerce at Wine Enthusiast during the session Growth Marketing Panel: New Priorities and Investments for Acquisition and Retention. “People want things fast, they want them delivered in a quick manner and they want their order to be perfect. Some of that stage was set by Amazon, but it’s a little bit of an opportunity as well, because if customers choose to not buy from a marketplace and they want to buy from a DTC brand, they really want to hear your story.”
However, finding the right story is easier said than done. The surge in ecommerce shopping over the past two years means shoppers have more choice than ever before, and DTC retailers need to present a good reason for shoppers to choose them over one of the giants. Selection alone is no longer a sufficient differentiator.
“Many retailers and brands still believe, ‘There’s no other company out there like us,’” said Brendan Witcher, VP and Principal Analyst at Forrester. “‘Nobody has the exact same things that we carry.’ That is just an absolute lie. The mindset of today’s consumer is ‘I can get this stuff anywhere.’ It doesn’t matter if it’s a coffee maker or a blue shirt or whatever. They can get that stuff anywhere.”
Every Retailer Has its Expertise — Make Yours a Selling Point
Luckily, the specialized nature of DTC brands also can be used as an advantage when it comes to finding the aspect of their business that does make them unique. A marketplace like Amazon can’t position itself as an expert on any specific product category, but a shoe or apparel retailer certainly can. Some retailers will have an easier time presenting themselves as helpful experts than others, but every brand can figure it out with a little creativity.
“Something we’ve had a lot of success with that I would posit really anyone with a brand can do is figure out what you’re an expert in,” said Wine Enthusiasts’ Strum Silberstein. “It’s easy when you’re talking about wine, there’s a lot of fun content to that one, but whether you’re selling faucets or screws I bet you have some kind of expertise. Develop a lead magnet, which could be a simple PDF that someone in your creative department spends an hour on with some type of tip, create a download page and link it on Facebook. You’ll find customers, and they’ll remember it when they’re price comparing you and another coffee maker company. ‘Hey, that’s the firm that told me how to make the best cold brew. I’m going to buy from them.’”
Dive Deep into Shopper Preferences Using Attribution Technology
The other key is understanding the audience that will be interested in your expertise, which is its own task. For example, francesca’s was suffering from significant customer churn in late 2021 — plenty of new customers were visiting the site, but most made one purchase then “fell out of the bottom,” according to Jann Parris, CMO of francesca’s. The solution was to do a deep dive into every channel, both paid and organic, to see what was driving traffic and where the most loyal customers were coming from. The retailer was able to drill down to find the strategies that were working, and the audience that was listening, to better deliver a truly personalized experience.
“It’s the segmentation strategy that’s really important,” said Parrish. “We’ve layered on a couple of things with that. The first is going back out and having a broad consumer study to understand the behaviors that we’re seeing in the market. The second piece is investing in understanding exactly where they’re coming from and how they got there. Attribution technologies that maybe we hadn’t considered in the past are now considered worth the investment.”
This approach can carry through to other marketing and social media efforts as well. While it can be tempting to divide up each platform based on its most common stereotypes, every social media site has a broad range of users, and your customers on that service expect content that is relevant to them.
“Think about a customer, not a channel,” said Wine Enthusiasts’ Strum Silberstein. “We’re guilty of this too. I say all the time that we’re on Facebook, but who are you reaching in the end? Remember that people are whole people. There’s not a TikTok customer. There’s not a Facebook customer. People interact with you in many, many places. I’m 38 and I spend a lot of time on Tik Tok. It’s not just for 18-to-20-year-olds anymore.”