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Online channels became the saving grace for consumers during the pandemic. People were able to get groceries, personal care items, medications, and more delivered right to their doors – and direct-to-consumer (DTC) marketing had a lot to do with the success, though the spotlight is rarely placed on the folks in marketing, since e-commerce gets most of the glory when it comes to coverage of how the industry is changing.
The annual 8.8% growth rate of online channels shows this clearly, as it far exceeds growth rates of other channels. For example, sales in traditional large-format stores are growing by just 2.7 percent.
As the pace of online sales growth continues, e-commerce will be the fourth largest channel for consumer product sales after large formats, service outlets, and proximity channels by 2022. So how can DTC retailers have the most impact at this inflection point?
As the pandemic continues to morph, there are a number of things DTC retailers need to keep in mind.
The pandemic transitioned in-store products to online staples, making for a plentiful time for D2C retailers, but to keep the momentum, retailers will have to keep their finger on the pulse of consumer behavior trends via DTC marketing methods to perfectly align their offerings.
In particular, there have been frequent examples of DTC retailers better aligning the types of products they sell and how they package them with what customers are demanding in that moment.
Making the most of the shift to DTC
It’s time to plan for the future of consumer products, which includes DTC marketing efforts, because if the last 18 months have taught us anything, it’s that change is the only constant.
Take supply chains and manufacturing capacity. In the early days of the pandemic, store shelves were depleted of hand sanitizer, a necessity in this new reality.
With fewer consumers thinking of fashion while sheltered in place, fashion retailers rose to the occasion and dedicated space in their facilities to produce hand sanitizer and masks that consumers and health professionals alike desperately needed. But by the end of 2020, the boom in sales tapered off, forcing retailers to either severely discount their massive supply or donate it to those in need.
Online channels have given consumer packaged goods (CPG) companies new ways to engage consumers and carve out markets by selling directly to them, from online ordering and delivery to personalized products and more.
To meet this consumer demand, CPG marketers are realigning their strategies to connect with consumers digitally to boost customer loyalty and revenue. During COVID, this shift has been in hyperdrive, with modifications seemingly needed every week to keep up with changing restrictions and consumer interests.
Here are five CPG retail trends to watch in 2021. The COVID-19 pandemic will continue to impact the way CPG companies do business.
Many consumers signed up for food subscriptions (including groceries, food delivery, meal prep) during COVID. However, once restrictions were lifted and they felt comfortable venturing out, these subscriptions were quickly on the chopping block.
Direct-to-consumer companies in this space should center conversations around what DTC marketing + engagement efforts they can use to keep customers from churning.
This might require them to offer paired down versions of their monthly subscriptions or branch out into new product categories that become popular toward the end of the pandemic.
What holds true across these examples is that flexibility is imperative.
Being able to keep up with consumer wants and needs (and even predicting what they might want next) is the only way to keep sales up.
As is clear in the examples above, the competition in DTC isn’t for the faint of heart. But the rewards are worth the risk: 76 percent of consumers shopped online at a new store or website.
The growth of digital commerce and competition from digitally native brands have turned DTC routes to market from an opportunity to a necessity and intensified the urgency to accelerate online DTC strategies.
Buyers love the personalization and convenience of direct-to-consumer e-commerce. What do brands love about DTC? Learn what's driving the trend and how brands benefit.
DTC marketing superpower: Real-time engagement to the rescue
In order to make the most of the current and future dominance of direct-to-consumer, DTC retailers must understand real-time buying signals and drop off points with in-time data.
This requires personalized, relevant offers at the right time by housing data in one place to avoid silos. The extreme pace of e-commerce makes this data (and the ability to act on it) a necessity.