Direct-to-consumer retail is not a new business model, but the rise of e-commerce has changed the retail playing field by making it easier for D2C startups to compete.
Previously stale product categories have had new life breathed into them by D2C startups that cut out the middlemen. It’s an exciting field that has excited consumers and opened a new level of competition for traditional retailers.
In this article, we’ll look at what D2C marketing is, and how companies in this space can develop a marketing strategy that drives awareness, sales, and loyalty.
What is the Direct-to-Consumer Model?
Before we jump into what D2C marketing is, it’s important to understand the D2C model.
As the name implies, D2C is a business model where manufacturers sell directly to consumers. Where B2C involves intermediaries in the form of retailers that sell manufacturers’ goods to consumers, D2C companies have direct relationships with their consumers.
This is significant because it means D2C companies own the entire process of getting their products to customers. From sourcing and manufacturing to marketing and distribution, D2C retailers have the entire value chain under their control.
D2C brands also tend to start with a narrow focus. Harry’s is a D2C razor company that positioned itself as an alternative to companies like Gillette by offering just one razor, compared to the massive assortment of options Gillette offers. Casper’s sold one mattress, rather than the dozens you would see at an incumbent mattress retailer’s store. They don’t try to be all things to all people, just the best at what they do. That has a major impact on their marketing approach.
What is Direct-to-Consumer Marketing?
From that definition, it’s easy to see what D2C marketing actually is.
It’s everything a D2C brand does to price, package, and promote its products directly to its target audiences. Upstart D2C brands are leveraging existing digital platforms that allow them to generate enormous reach at a lower cost than traditional channels and build deeper relationships with customers.
D2C marketing is interesting because D2C brands have full control over messaging and pricing. They can collect customer data directly without going through an intermediary retailer.
D2C is the perfect model for digital-first brands. According to research by Statista, 22 percent of all retail sales will be via e-commerce platforms by 2023. Moreover, additional Statista research showed that email, search, social, and direct navigation to online stores are the most valuable sources of buyers for e-commerce.
What has helped make D2C brands successful is in using platforms like Google, Facebook, Instagram, Kickstarter, and even Amazon to drive awareness, interest, and purchases. These platforms make it easy to scale reach without paying the prohibitive prices they would pay on traditional channels. Offline channels have a place, but the digital-first companies can get the most out of digital-first marketing.
How to Create a Powerful Direct-to-Consumer Marketing Strategy
In this section, we’ll look at some ways D2C brands can create strong marketing strategies that grow their business and set them apart.
Start Simple and Differentiate
A simple product assortment makes the marketing effort much more straightforward. As research from CB Insights showed, the most successful D2C brands are starting out with a smaller assortment of products. In some cases, they are starting with just one product.
Bonobos started out with one pair of men’s pants. Casper started with their take on the “perfect” mattress. Harry’s started with one single razor.
The takeaway here is that simplicity makes it possible to cut through the clutter of “long-tail” selling on the internet. Amazon’s assortment is unmatched, but can leave consumers paralyzed with all of the seemingly similar choices in every product category. The best D2C brands know that by starting simple, they can differentiate by being the best at one particular thing. It makes it easier to iterate on your products by learning what consumers respond to. It turns out the limiting choices is a great thing for consumers and for businesses.
Make Content King
Content is the conduit between your product and your audience. It’s what shows people not only what your product does, but how it fits into their lifestyles. Crafting content with different media types helps you reach a broader audience than just the people who are searching for your products with the intent to buy.
Dollar Shave Club is one example of this approach. The razor company has a blog that not only discusses men’s grooming and style but also takes a broader focus on health and lifestyle topics. Revolution Beauty, on the other hand, works with influencers on product reviews and demos, while fitting their products into wider topics like societal definitions of beauty, gender, and other popular subjects.
Think not only about what’s directly relevant to your product, but what your audience cares about more broadly. Use that to guide the types of content you create.
Work with Influencers
This is a continuation of the point before. Influencers are a vital marketing channel for D2C brands, particularly if you’re targeting younger consumers. Influencers have built a strong connection with their followers. If they feel your product is something their audiences will benefit from, they are likely going to be willing to work with you.
Building trust with consumers as a new brand is hard. We all know that people trust the opinions of their friends and peers more than they trust messaging from a less-familiar brand. But influencers have a friend-like relationship with their audiences, so working with them is like generating word-of-mouth at scale.
Remember: followers/reach is not the only important metric when deciding which influencers you want to work with. An influencer with a small but highly engaged following may be more valuable to you than one that has a large but diluted audience. Ask for engagement metrics when vetting influencers so you can see if their audience is truly willing to take their recommendations.
Design a Compelling Online Experience
Consider the buyer’s journey as you craft your online experience. What do users need to see as they enter the consideration phase? What do they need to see before they feel confident making a purchase? Creating content that maps to all stages of the buyer’s journey means that you will always have something for your audience, no matter where they are in their decision process.
Don’t forget to focus on customer service as well. It’s well known that it costs far more to acquire a new customer than it is to retain an existing one. Your content, email, and social media strategy should make room to engage with loyal subscribers. Your online customer support should be friendly, helpful, and prompt when customers have issues with their orders.
Use Digital Platforms, Email, and Community Pages
Platforms like Google, Facebook, Instagram, TikTok, YouTube and others are powerful channels for driving awareness and acquisition. You can leverage these channels’ paid and organic reach to get in front of thousands, if not millions, of people in a very short amount of time.
But you don’t truly own your audience on any of those platforms. Facebook has dramatically throttled organic reach, forcing brands to pay to get in front of the audiences they built. Google has added new features to their search results pages that are taking clicks away from brands, in addition to frequent algorithm changes that can drastically impact your organic traffic. On all channels, paid ads are becoming more expensive as more brands compete for the same ad inventory.
Use these channels as a means of funneling users to the properties you do own, such as your website and email list. If you have a forum or community page, ask users to sign up for it. An email list is a major asset because it is far less susceptible to the whims of a third-party platform. Develop an email strategy that facilitates customer support and delight through targeted promotions.