DTC is back on trend

Look for the biggest retail trends for 2021, you will find almost all related products directly to the consumer (DTC).

How could that be, since people have been selling directly for centuries? What it means to sell directly has changed a lot over the years. The latest change is taking place now as retailers invest in DTC strategy not only to meet sales revenue but also to build a global brand. Understanding the motivation behind this shift is important for retailers to take full advantage of DTC’s potential.

20 years ago, DTC looked very different

The term DTC is a misnomer because it does not cover all types of indirect sales. If you took your cart to Wheels to sell potatoes in the old Spitalfields market in London in the 18th century, for example, they were not DTC brands.

DTC refers to the type of business in which the customer purchases directly from a retail brand website or app. The term was coined in the 1990s, when the Internet was at its peak and retailers were suddenly selling to customers around the world at low prices.

DTC has become popular as a democratic, modern business model. Retailers can create a website with an integrated e-commerce platform and sell it to customers without showing a wholesaler, online marketplace or specialty that a product is suitable for their organization. This ease of access made DTC a popular channel for beginners in the early days, with market-to-market times. With cheap social media ads and plenty of capital, small businesses can start and scale with DTC business at an unprecedented rate.

For some time, the design has been consistent – companies start with a small supply of products (sometimes even one product), grow a community of small loyal followers, and then expand the business through social media ads. Today, many emerging startups are experiencing high social media advertising prices and a steady decline in Instagram followers who come to market. Even when a company is out before the competition, it has a limit to how much it can measure when it relies solely on web-only retail. Now these companies have reached a certain standard.

Today’s DTC landscape is improving

Instead of being a symbol of web-only startups, DTC is now on the main line, and there are two main reasons behind this shift.

The first was the COVID-19 outbreak, which saw established retailers – especially those who previously relied heavily on brick and mortar sales – invest in the DTC strategy. The closure of physical stores has allowed unprecedented numbers of consumers to buy online, making e-commerce a fast-paced e-commerce retailer. Shop online, take it to BOPIS, for example, 2020 in February In 2020, it saw a 28% increase over the year, up from 18% in January, according to research from Adobe Analytics. While many retailers see these initiatives as a temporary solution, the growing popularity of digital retail practices has encouraged many retailers to pursue these investments in e-commerce platforms.

The second, and most promising, is the growing demand from DTT Strategy for international retailers to strengthen their brand image and protect it from decay. If a company is large, it can be very difficult to maintain the consistency of the product delivery, as each company has a third party distributor, which means that the brand name will be further disrupted and inconsistent with the customer experience. Retailers’ product descriptions, delivery times or customer service are limited by third parties. Because distributor partners do not make as much effort to win the retail brand as the retailer itself, the best metrics for investing in the DTC strategy are to ensure that retailers offer on their own terms.

Online presence is important from time to time

More than ever, consumers do their homework before buying. Sixty-three percent of buyers now search for a brand online before making a purchase, according to Think With Google. If they could not find the information they were looking for, 72% would buy somewhere else, according to Acneio. Consumers are less likely to buy from lesser-known retailers, especially during the COVID-19 outbreak.

Having a product website that provides consumers with the information they need to make informed decisions is the best way to address these concerns. Even the most basic DTC strategy, which focuses primarily on e-commerce solutions, can provide consumers with an unparalleled level of information. Product Guidelines, Frequently Asked Questions and Quantitative Guidelines are some examples of services that can help consumers make sure a product is right for them. In the fashion retail industry, some companies are going the extra mile to offer similar products to consumers.

One of the most common reasons for consumers not to shop online during the outbreak is the inability to touch items, such as in stores. By providing consumers with as much information on each product as possible, retailers can gain consumer confidence. For locked consumers, it is important to be able to trust their promises in retail. Half of respondents in Edelman’s study agree with the statement: “At this crisis, I am turning to brands I can count on” (52% in the UK, 51% in France and 48% in Germany). It is no longer enough to doubt that a retailer is trustworthy. Consumers want absolute certainty.

In addition to product information, consumers want to know more about branding. When it comes to corporate social responsibility, a product’s mission, purpose, and perspective are now key to changing consumer decision-making patterns. Consumers of all generations are ready to spend more on products that they believe will protect the environment, the rights and exclusion of champion workers, according to the McKensey report. If brands believe they are neglecting their social and environmental responsibilities, consumers will now refrain from buying from them. In fact, Edelman reports that 71% of consumers lose faith in a brand if they make a profit.

It’s all about the brand

The most successful DTC strategy will not start with e-commerce solutions and will re-fashion the surrounding website. A successful DTC strategy sells the product as hard as it does. While e-commerce solutions are often one of the most likely revenue streams, the company’s website is the company’s headquarters.

Here are some ways retailers can strengthen their brand through DTC strategy

  • Be clear about your product values, and think about the sustainability, social responsibility and inclusion process, as well as parts about the company’s response to COVID-19.

  • Browse issues related to your brand in the blog and show guest authors related to your values.

  • Let consumers know that your brand cares about their experience by working to ensure consistent customer service, responding directly to customer reviews and sending surveys for customer feedback.

  • Encourage consumers with special promotions, subscription-based sales, product bundles, flash sales, free shipping and gifts.

  • Design: Customize customer experience with your own products and packages.

  • Reduce conflict as much as possible by creating an account that keeps customers on their shipping and billing details.

  • Reward your most loyal customers with membership programs that offer special benefits to members, such as pre-sale access and special offers.

  • Offer online activities that complement your product, such as expert makeup tutorials and yoga classes.

  • Increase customer engagement with your client through a community page that explores customer stories, brand ambassadors and events.

Instead of being a sales revenue stream, big brands need to invest in a DTC strategy to build a brand that they enjoy the most, which will increase sales on all channels.

The future DTC strategy

For some retailers, the company’s website is the only digital asset in the DTC strategy.

Over the next few years, we may see an increase in the number of retailers offering mobile and smart home appliances. Instead of offering mobile-friendly versions of the website, the best retail apps offer unique experiences for the app. They add digital channels as they create completely new consumer experiences.

Retail apps work with knowledge that increases customer loyalty with product engagement. In food and beverage retail, apps may allow you to order food at the table, open a digital map of the supermarket, or receive special offers through notifications as you walk past the store. In furniture, they can be integrated VR functionality that allows you to see how items look in your home. It could be a training app like Nike and Adidas in sportswear. As part of the DTC strategy, retail applications have the potential to increase brand engagement in all markets.

If you are thinking of investing in a DTC strategy, check out an upcoming article with tips for making your DTC channels more accurate.