Image from a Glossier Instagram ad: Team Glossier is learning to knit while social distancing.
While consumers have been steadily embracing more D2C brands for years now, early signs indicate that the COVID-19 crisis may rocket some into next-dimension growth.
Sounds obvious, right? More digital shopping is likely to benefit the most digitally adept brands. But new research from Rakuten Advertising on D2C shoppers finds some surprising category and demographic shifts.
Also impressive is the depth of fandom, with more than 60% saying D2C brands in these categories are more innovative, more engaging and more personalized.
Rakuten Advertising, which says 30% of online shoppers made at least one D2C purchase last year, fielded a study of 1,000 adults that had done so in February, as awareness of COVID-19 was rising throughout the U.S.
Beauty and personal care, food and pet care surfaced as the top three most recognized D2C categories at 75%, 74% and 71%, respectively.
But moving into March, when much of America stormed retailers for everything from toilet paper to spam, D2C sales boomed. Between March 8 and March 31, sales of beauty brands in Rakuten’s affiliate network climbed 50%, says Julie Van Ullen, U.S. managing director, via email. And in its apparel affiliate group, sales jumped 56% in the same period.
“In light of the COVID-19 pandemic, consumer purchasing habits, as well as the availability of products, are clearly changing rapidly,” Van Ullen says. “Many D2C brands are actually poised for growth as so many consumers shift to online shopping.”
The research also took a closer look at generational differences. D2C pet care is most popular among Gen X and boomers, with about 80% of respondents aware of that category. And 70% of millennials say they expect to spend more on D2C beauty and personal care purchases this year. Another surprise? Gen Z is the most excited at the chance to see a D2C brand in a physical location, whether it’s a store or pop-up experience.
Millennials are most likely to have purchased a D2C brand from a frequent-flyer miles site, while Gen Z is most apt to find D2C brands through coupon sites. And TV turns out to have as much impact as Instagram, with 30% of the sample saying they’d made a D2C purchase after watching a TV ad.
Overall, these shoppers love social, with 60% saying they follow a D2C brand on social media. Millennials are more responsive to content marketing, and are 26% more likely to say they’ve followed a brand because of engaging or entertaining content.