Direct to consumer brands and models that are killing it
Discover some of the best direct to consumer brands and how can you up your e-commerce game to compete in the digital landscape.
Direct-to-consumer e-commerce sales generated $111.54 billion last year in the US, so it’s no surprise that DTC brands are doubling down on the growing trend.
Leaders and laggards alike are placing greater emphasis on their owned + operated online channels, as eMarketer predicts 2023 DTC sales will reach a whopping $174.98 billion.
What is a DTC brand: Direct to consumer definition
Direct-to-consumer (DTC or D2C), also known as business-to-consumer (B2C) is the sale of products or services directly to consumers.
DTC brands typically bypass third-party retailers, wholesalers, or agents and only sell online, although some direct-to-consumer brands have created pop-up shops or other physical locations to compliment the omnichannel journey that consumers expect today.
Examples of DTC brands include:
- Allbirds
- Dollar Shave Club
- Glossier
- Graze
- Outdoor Voices
How DTC brands can capitalize on marketplace opportunities: Strategies for direct-to-consumer success
What’s the secret to DTC success? Let’s look at how some of the most successful companies have done it.
There are four direct-to-consumer retail strategies that stand out as especially effective:
- Hyper-focused
- Customer-centric
- Repeat customers
- Savvy social
Notice the above strategies are all about the customer – that’s the hallmark of DTC brands – what customers want, they deliver, from product to purpose.
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Top DTC brands start with their north star
Every brand has to start from square one. Unless your brand is Amazon, there’s a slim chance you can be successful by being everything to everyone.
Instead, digital upstarts begin by getting very good at just a few things or even just one thing. Once they establish that their target market loves their existing SKUs, they expand to more offerings.
This disciplined style has been very effective for sustainable footwear purveyor, Allbirds. They started off by getting their product right and making a name for themselves online. Fast-forward a few years and the brand now has nearly three dozen stores around the world, and has expanded its product line to clothing and accessories.
The best examples of DTC brands mimic this strategy by finding their north star product and following it until both customer experience and demand are solidified – then subsequent product lines will have a much smoother path to success.
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Listen up: Tune into your customers
A raving customer base can take a digital upstart mainstream in record time. But in order to get the unparalleled boost from word-of-mouth marketing, a brand needs to become an expert listener:
• What do my customers want?
• What isn’t working for them?
• What can I improve on?
Customers are answering these questions and more around the clock through product reviews and social media. Brands have to dedicate the resources to mining this data and responding in a timely manner.
Take Glossier, a brand that keeps its ear to the ground with its “gTeam.” This division reads comments across Instagram, Facebook, reddit, product reviews, and other places to stay current on customer sentiment. And they don’t stop there: Glossier then synthesizes the feedback with the goal to turning the findings into new products and programs.
Responsiveness is essential in DTC. The digital environment is perfect for quickly collecting feedback and sensing trends before they blow up. But DTC brands need to make this customer focus a priority from day one to benefit from the advantage that they have as digital natives.
DTC brands: Keep customers coming back for more
With customer acquisition costs fluctuating all the time, figuring out how to bring in more repeat customers is essential to survival as a D2C brand. That’s why so many brands have spun up subscription services to both be helpful to their customers and create a steady stream of revenue.
There seems be a membership for just about everything under the sun from wine to beauty to automobiles to apparel for the whole family. And these subscriptions of course expand beyond physical products as well: Peloton sells class subscriptions to owners of their equipment and even other fitness fanatics that want a mobile workout experience.
What all of these brands have in common is that they’re putting revenue in the center of their product lines, making sure that customers get a valuable experience for what they pay each month to keep them coming back.
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DTC INFOGRAPHIC: The benefits of direct-to-consumer
There are plenty of benefits with regard to direct-to-consumer brands, but the top ones are:
- Complete messaging control, from social to engagement to graphics
- Ownership of customer data, allowing for better personalized offerings and relevant marketing
- Improved customer experiences and stronger brand loyalty
Smart social media drives fandom for DTC brands
In order for brands like Glossier to keep track of mentions on social media, they first needed a strong social presence to get customers talking. Some brands tap influencers to get the word out about their products. Others have a team of brand ambassadors to help build their online community.
No matter what approach a brand takes, the end goal is to jumpstart word-of-mouth marketing.
Liquid Death, a DTC brand that sells canned water, accomplished this with edgy marketing on social media, in which they vow to “murder your thirst.” They even feature an influencer shot-gunning one of their cans of water and their CEO getting a tattoo of a customer who chugged a can every day for a year. These stunts might be peak D2C marketing, but they demonstrate Liquid Death’s deep understanding of their customers.
Social media campaigns don’t have to be extreme to be effective, but brands do need to start with a connection to the customer base and be willing to try concepts out until they learn what resonates best.
As DTC becomes more engrained in the retail ecosystem, brands will need to work harder to differentiate themselves from competitors. Brands that focus on creating personalized DTC strategy and seamless experiences will have an easier time standing out and becoming staples in their customers’ lives.
