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Consider the first moment of buying furniture.
You’ve probably headed to a warehouse or department store, making sense in stores and taking decent amounts of time for your day to either arrange the delivery of items – at astronomical cost – or rent a truck yourself. Go pick up, 12 weeks after the original order was placed.
Kabeer Chopra and Stephen Kuhl faced this exact problem as they searched the business school for furniture for their apartment. They had to choose between old furniture storage or cheap disposable furniture that would still need to be delivered to the doorstep.
This clumsy bathing, which wastes time, was once considered a role for the tables. Incoming traders imitated it, department stores envied him, and customers simply got used to it.
But there has been a huge shift in retail over the past decade – one in which the shopping experience is more tailored to what is convenient and easy to consumer, rather than retail.
Kabeer and Stephen saw an opportunity to improve the way people bought furniture. They created a modular product that could be larger or smaller, depending on the desired size – and, even better, the pieces could be delivered directly to consumers on the doorstep.
This simple process of delivering products to consumers is relatively new in retail, and brands such as Bonobos and Glossier are the first to jump into distribution model in the mid-2010s.
Forged “Direct-to-consumer“Or DTC, that movement started first in things that are easy to deliver, like skin care, makeup and fashion. Now there are also more expensive and complex items like smart home technology seeing success in DTC space.
The overall landscape of online sales continues to grow – with about 14% total U.S. retail sales estimated to emanate from e-commerce channels by 2021.
This growing opportunity is the main reason why traditional brick and mortar retailers are starting to jump over the internet – and for many use the DTC approach.
The direct customer model differs slightly depending on the brand, consumers, and market area in which they operate.
- Some incorporate market – like eBay and Amazon – in their mix of channels.
- Some open permanent or pop-up stores in brick and mortar location.
- Some rely on partnership brands to attract mutual audiences with like-minded people.
But one thing is for sure: many brands achieve success and create titles using the direct customer model.
What’s a little for customers directly?
Direct consumer is defined as the promotion and sale of products directly from the manufacturer or manufacturer to new customers – the removal of all intermediate channels such as markets, intermediaries, brick and mortar stores and third-party retailers.
Although DTC brands can be found in any vertical – from cars (Tesla), for airline ticketsLinearAir), All the way to fertility tests (Contemporary fertility), The DTC model is most commonly used in fashion supplies, consumer products, and household supplies.
With less reliance on third parties, fewer contract negotiations and fewer restrictions on branding and fulfillment, the DTC model is an attractive route for upcoming brands that need easy market entry, as well as for legacy brands that are willing to increase their online presence at the same time. paying great attention to customer journey.
How do brands win with the DTC model?
In February 2020, the cornerstone of the Brandless DTC announced that they stopped working.
As one of the first attractive DTC brands, the announcement left many wondering what exactly went wrong: was it their product diversification? Marking prices (or shortages?)? The lack of customer purchase strategy? Or any combination of the above?
While the answer is not clear, one thing is: Increasing the number of brands opting to use the strategy for direct consumers, combined with inherited DTC brands entering a more experienced and refined business environment, will inevitably judge the industry to shake.
Many experts predict that 2020 will be the year of acquisitions and closures in the DTC area. So which brands should remain relevant in this age of increasing oversight and competition?
Get upside down with these ideas.
1. Brand authenticity.
Many successful DTC brands stem from mission-led initiatives – not just high-quality products. These brands stand out for their different personalities – whether they’re focused on disrupting industries like Glossier with skin care, focusing on sustainable initiatives like 4Ocean, or simply removing barriers to entry into products like Ro for men’s health.
New industries like CBD are also prepared to access the direct consumer as there is more room for experimentation.
Why is brand authenticity important? Because consumers care about the interactions they have with brands. IN 2018 RetailMeNot survey, two – thirds of respondents said brands should take a public stand on important societal values.
Image source: eMarketer
millennial and Buyers Gen-Z they look carefully at the non-authoritarianism, and the DTC brands reacted in a monumental way.
There is more transparency in retail than ever before – and DTC brands use every possible channel to communicate in and out of their business:
- How to return to the world through charitable or sustainable efforts,
- How to listen and ask for feedback from customers, and
- Giving real prior insight into new product launches and locations.
LARQ Water Bottles donate a portion of the earnings to 1% for the planet. Source: LARQ website
Brands even talk when things go wrong. The “CEO Letter” is becoming increasingly popular, and brands are using this outlet to notify customers of upcoming changes or past hiccups.
In an email to customers, A planner of passion remarks on how it improves their user experience.
Take a look at any brand that leads directly to the consumer and be sure to find thoughtful ways to personalize it shopping experience for your customers.
There are two aspects to personalization:
- Within the purchase and
- Within the product experience.
In a custom shopping experience, an e-commerce brand uses your previous shopping, search, and browsing history to customize the way you browse their website. It could be as simple as asking you to log in to your account so that your order history, payment and shipping details are filled out in advance. Some brands – especially those using the DTC strategy – go even further.
In a personalized product experience, the products offered by the store can be personalized. This is becoming increasingly popular for fans and technology enthusiasts who want a personal touch in their daily shopping.
BonBonBon customers for a delicious gift can create a personalized box by choosing the perfect flavors. Image source: BonBonBon website
LARQ water bottles can be personalized with names. Image source: LARQ website
3. Digital by design.
DTC companies not only rely heavily on the digital ecosystem, but were also born as digital natives, with social media and e-commerce coded in their brand.
Essential Label website has a section where you can shop directly from their Instagram posts.
4. Community and advocacy.
Humans are naturally social beings. We need to belong to a social group, and DTC brands have put a lot of emphasis on building and nurturing their own social communities and an online fan base – either by consistently mentioning customer reviews, engaging in their marketing efforts, or developing a product plan based on customer feedback.
Email address from Hickies reminds readers of the positive reviews they have received.
5 Direct consumer trends for 2020
The year 2020 is predicted to be an exciting year for brands with direct consumers. As more and more competitors enter the arena, DTC brands must find a way to differentiate – whether through product diversification, acquisition, partnership or simply something new.
What are our predictions for direct consumer brands in 2020? Note the following:
1. Products based on subscription.
We started to be honest: this is less of a “trend” and more of a try way of retaining customers, There are three main methods of subscription services in e-commerce, as shown in this figure from McKinsey & Company report:
We still see companies with direct difficulties that include subscription to their business model – either as a main product (such as Birchbox, Blue Apron and Stitch Fix) or as an additional offer.
In addition to bottles and utensils that are not on the shelf, there are customers OliveOilLovers they can enroll in their Olive Oil Club of the Month every month for a special treat.
2. Opening brick and mortar stores.
Certain areas in technical hubs are they become refuges for retail bricks and mortars with DTC structure.
Meditate Hudson Yards and West Village in NYC – with brands like Everlane, Warby Parker and Brooklinen covering the streets.
We even have a mini-DTC neighborhood in Austin, Texas – South Congress Ave.
Within the two blocks are TOMS, Marine Layer, Warby Parker, Kendra Scott and Madewell, and they will soon become Howler Bros. and Jenny’s Ice Cream.
Image source: Suppressed Austin
The intent behind this strategy is wise. Not only do you offer more options to customers who want to buy your products, but you also open up more opportunities to build communities with your customers. In these retail stores, DTC brands offer classes, workshops, and even farmers markets.
When there is a set of DTC marks in a particular area, they are even better. Share foot traffic and help customers.
4. Traditional retailers move to DTCs (and vice versa).
In an effort to gain greater market share and appeal to different types of customers, older and traditional sellers buy DTC brands or create brands that reflect brands and DTC brand strategy.
For example, take Target Good and expensive private label food and beverage. With salt, spices and oatmeal, its sparkling water is placed on the shelf as a competition to modern local sellers and leading LaCroix markets.
Image source: Target
On the other side of the store, Target’s Everspring brand of cleaners and household soaps aligns the shelves next to Mrs. Meyers.
Image source: Target
The design and aesthetics of these online stickers mimic many brands for the direct customer: serif fonts, muted colors, clear logos. They are, among other Target other brands, an attempt to please consumers who are interested in buying DTC brands.
If you have defeated them, join them. Numerous old dealers are also snatching into DTC land. Unilever gained its first titles by purchasing its first DTC titles Dollar Shave Club in 2016
Procter & Gamble is at the forefront of this movement: they have acquired several monumental DTCs in the past three years, including Billie. domestic, i Walker & Company.
5. DTC marks turn into new categories.
Product diversification is one of the most common ways in which DTC brands achieve greater success after launch.
Diversification reduces risk in the event of an industry crash and provides an additional barrier to competition.
There are two diversification techniques often used by DTC brands:
- The brand is expanding personalizationcolor options and sizes of existing products.
- The brand is expanding to completely different products.
A perfect example of product diversification is the Away brand – which has recently switched from the brand’s “baggage” to the “passenger” brand to encompass its product diversity.
The two founders – Warby Parker alumni – started with one product, The Carry On, in November 2015. By October 2016, they introduced other sizes, including a larger version of The Carry On and standard luggage.
In May 2019, Away launched an investment cycle with the goal of expanding its products to more than just luggage.
3 new brands using the DTC e-commerce model
You can probably hear some of the brands that are directly aimed at consumers (I think they are Allbirds, Glossier, Warby Parker, etc.), but new and disturbing DTC brands are launched almost every day. Watch out for those new names in 2020.
Built the idea that furniture should be practical, usable and easy to build, lair brings a fresh look to the furniture industry.
Labeled a “luxury real-life couch,” Burrow sells sofas and other home decor for people who want quality furniture with the associated high-ticket price. Read more about the story of Burrow and BigCommerce here it is.
2. Hyphen sleep.
Image source: Merge dashes Web page
One of the many seemingly endless companies for DTC mattresses like Casper and Lees, the Hyphen Sleep features an innovative design made from materials of ethical origin.
Image source: Hiphen Sleep website
Image source: 4Ocean Website
4Ocean is an innovative company with bracelets that extracts a kilogram of waste from the sea for each item purchased. In addition to one-time purchases, they use a subscription model for consumers who want to show long-term support.
Over the past few years, the landscape of direct to customer has shifted consumer attention from inherited retailers to tinted small stores.
While competition in the DTC world continues to grow, brands must now shape and innovate or risk becoming irrelevant.
As 2020 marks the beginning of a new decade, the DTC space is sure to continue to evolve – perhaps more than ever before. Expect a constant focus on user experience, product diversification, and industrial acquisitions and mergers.