In a study by Consumer Goods Technology and Wipro, 39% of executives from North American CPG companies said that they believe direct-to-consumer channels drive the most online revenue for their companies. In fact, nearly three out of five digital shoppers say they would shop on a brand site over online retailer sites like Amazon.com because they offer exclusive products. This creates a tremendous opportunity and can shift how CPG manufacturers have been marketing their products for the past 25 years.
Before the advent of Facebook, Twitter and even before mobile phones, CPG manufacturers relied solely on retailers to sell their products. During that time, CPG marketing was about branding; direct to consumer marketing was left to retailer partners.
Steven Barr, PwC’s U.S. leader of retail and consumer industry, said that “today, the CPG companies who engage with consumers directly through digital channels and build out their DTC processes will have the best advantage for creating new growth.”
Look at how DTC marketing has changed for manufacturers over time. Let’s remember when websites and the world-wide-web were introduced. Do you remember the epic web 1.0 era? CPG manufacturers ran to their agencies to help create a .com. But did the consumer even show up? Did she care? Fast-forward 25 years and some of us are having déjà vu. To many marketers, social media is having the same effect on DTC marketing plans as websites did in the early ‘90s. Soon after Facebook was born 10 years ago came the creation of Facebook brand pages. Brands once again scrambled to create their social presence. Those of you old enough to be around during the .com era are nodding, recognizing the similarities.
Why run to build your brand’s social media presence? The answer is direct access to the consumer. Marketers realize they can connect and engage with the actual people consuming their products in a way they have never experienced before, advancing their DTC plans more than any other development of the last century.
It is clear; communicating directly with consumers allows CPG manufacturers to innovate faster, spark word of mouth recommendations, drive an increase in awareness and sales and capture key insights. There is no argument when it comes to the power of consumers, especially consumer advocates. The decision becomes how and where to engage with the consumer directly.
Facebook and Twitter helped marketers realize the importance of consumer engagement and how social media gives power to the consumer’s voice. But these sites are only the beginning when it comes to building an actual relationship with the consumer. The challenge with social networks is that the brand does not own the relationship with the consumer and therefore has limited ability to get to know the consumer. The reality is that the larger the social network, the more control it has and the less access you have. These social networking giants have become very powerful advertising platforms, but without an investment in media you cannot reach or engage your consumers.
Don’t worry, you do not need to abandon your social networking strategy, you just need to work on building a stronger and more direct relationship with your consumers.
Whether you’re just starting DTC
initiatives or expanding your DTC strategy, one way to take control of your DTC communications and to make a larger impact on your brand’s DTC sales is to develop your own brand advocacy
community. Imagine building a community of consumer advocates who would do the “talking” for you. According to a Forbes study, 81% of U.S. respondents indicated that friends’ social media
posts directly influenced their purchase decision. Their recommendations carry significantly more weight than the brand.
Here are some ways CPG brands can leverage a community in DTC strategies:
For CPG brands, direct to consumer means extending the conversation beyond your website or Facebook brand page, it’s about building a brand-owned community and harnessing the power of your consumers’ social networks to drive mass awareness, sales and referrals.