The direct-to-consumer (D2C) era has arrived, and established brands are looking for ways to get into the action. Last year, Nike’s direct-to-consumer growth outpaced its wholesale growth. Others, like Verizon, P&G and Kellogg, have launched their own D2C offerings.
But the answer to thriving in the D2C era isn’t just delivering goods to your customer’s doorstep. By first developing digitally, D2Cs established marketing advantages that aren’t reserved for D2Cs alone. Every company can sample from the new strategies, techniques, and approaches propelling the young up-and-comers, and discover new ways to increase their reach.
D2Cs know their customer profiles like the back of their hands and apply
that intel to every aspect of their brand experience. For example, vitamin provider Care/Of literally customizes a vitamin regimen based on a customer’s personal needs. After filling out a
survey about health habits and concerns, the company sends monthly, personalized packets with inspiring quotes (and even the customer’s name on them). Anyone who has ever stared at a wall of
pills, knows this beats the retail vitamin experience any day.
Larger brands can learn from this by honing their creative to appeal to very specific targets. Brands that try to please everyone are like the runners-up in a talent show. A brand that appeals to everyone, but is no one’s favorite, might as well not exist.
Weave Values Into Marketing Touchpoints
By now, everyone’s gotten the memo that consumers, especially millennial consumers, care about a brand’s values. The message is everywhere, on repeat. So why does it bear repeating? Because so far, D2C companies have been taking far better advantage of this “insight” than older brands have.
D2Cs tend to be more coastal, more millennial, and more effortlessly young than counterparts at traditional companies, so they’re better at communicating in the idioms of the now. And the now is all about real values and feeling represented.
If you’re not 100% sure why paper straws are popular, why and when to use Latinx as an adjective, or why a seemingly racially diverse commercial without body diversity is problematic, you’re at risk of getting eclipsed by a competitor that’s more fluent in today’s marketing realities.
Make sure your creative and marketing touchpoints remain thoughtful and
communicate the values of your desired customers. A D2C may be better at it than a traditional company, but it doesn’t have to stay that way.
Advertisers who work with D2Cs know a few pain points: D2Cs have limited marketing budgets, their spends are often make-or-break for the company, and in the back of their minds, they’re thinking, “Hey, I have a film school buddy who can shoot my commercial for a case of beer.”
All that said, they still make wonderful, engaged, and responsive creative partners, but
they’re definitely dollar-conscious. And it works. Their focus on money causes a focus on performance, which is revolutionary for big-brand CMOs who will drop millions on a fuzzy brand
campaign that doesn't quantitatively drive any ROI.
This smart-spending mentality is changing the industry. The old, bloated agency of record model is slowing in favor of smaller, nimbler specialized agencies who can more economically create high quality digital assets that appeal to increasingly specialized demographics. Spending smart means spending with specificity. Which leads us to…
Let Data Drive
10 years ago, the big brands went to TV with a single 30-second and (maybe) a 15-second spot. D2Cs are leading the charge when it
comes to testing—every creative and every channel, including TV. Today, D2Cs go to TV with 12 (or more!) creative variations, then use those learnings to create exponentially more specific tests
for future flights. The hypertesting mentality is effective. According to VAB, D2Cs spent
“$3.8 billion on TV ads in 2018, an increase of over 60% from the year before.”
TV is one example, but certainly the notion of testing extends much further. If you’re buying hyper-targeted ad real estate on a platform like Youtube or Instagram, going in with one, generic ad is like bringing a carrot to a gunfight. D2C marketing teams act like both scientists and guinea pigs, and their willingness to test (and have old assumptions proven wrong) is why their learnings lead them to find marketing success.
Traditional companies must pay attention.