The following was previously published in an earlier edition of Marketing Insider.
There’s trouble in the world of D2C brands. The once blistering direct-to-consumer world has been beset by obstacles over the past year. This includes increasing costs to advertise on digital ad platforms, challenges in tracking posed by ios14, difficulties achieving traction via organic channels -- and, most importantly, consumers pulling back on spending.
Yet, some brands managed to break through. Last year, MUD/WTR, the mushroom-based alternative to coffee, achieved more than 10,000% (!) 3-year sales growth. Oura, the Finnish health technology company, sold its one-millionth Oura Ring and continued to grow.
The challenges plaguing the industry won’t go away any time soon. For D2C brands to thrive, they must successfully:
Develop value-focused creative and messaging that wins the minds of consumers and help it stand out from competitors. Pro Tip: Tap into the creator economy and build a network of content creators who speak directly to your target consumer. Makeup veteran Bobbi Brown used a wide variety of brand ambassadors with how-to videos to launch her new Jones Road Beauty line.
Apply zero-party data and strong customer experience processes that allow brands to listen to their customers’ pain points. A brand cannot win in D2C with low customer satisfaction ratings. Pro Tip: if you are a high-growth company, overstaff your consumer experience department and adopt a “proactive” approach to CX by anticipating customer concerns and addressing them before they get out of control.
Use behavioral science to better understand the emotions inherent in the purchasing decision. For example, one behavioral science bias, the "Pratfall Effect," is a hidden key to unlocking authenticity by acknowledging perceived weaknesses and turning them into strengths. Pro Tip: Guinness Surfer, voted the greatest ad of all time, turned a perceived product flaw -- that time you have to wait for the foam to settle before you drink it -- and put it front and center. It enabled the company to make a brand benefit from a weakness: “Good things come to those who wait.”
Invest in innovation to deliver products that stand out. Humans are drawn to innovation and progress, so it's important for brands to continually make product improvements. Pro Tip: Allbirds began as a sneaker made of merino wool, and has expanded its product line to slippers, and clothing.
Commit to ethical commerce. What was once a nice-to-have value proposition is becoming a need-to-have component of business. Eighty percent of consumers consider sustainability when making a purchase, and 66% of consumers are willing to pay more for sustainable products right now. Companies that are mission driven, impact oriented, advance social causes, and prioritize ethical commerce are succeeding. Pro Tip: The B corp assessment is a free tool for brands to take that can help them measure and improve their impact.
Consumers today have expectations about the shopping experience -- and if it’s bad, their shopping carts never get checked out. From day one, capture consumer feedback to find the pain points in the shopping experience. If you can provide a platform that makes it easy to buy and follows the customer journey, you will see results.