The latest forecasts estimate that 2019 ecommerce sales will surpass 10% of total retail spending in the United States for the first time in history. With so many more shoppers purchasing online and via mobile devices, brands are recognizing the appeal of having a direct-to-consumer sales channel.
Retail brands are fostering DTC strategies to create more impactful connections and help meet consumers’ expectations and to stand out among competitors. While growth is occurring across sectors, certain categories are witnessing considerable opportunities for DTC expansion.
As retail becomes more crowded and competitive, brands need to stand out more than ever. Last year, numerous new and established brands adopted direct-to-consumer strategies. Let’s look at three trends driving DTC.
1. A growing competitor
DTC brands continue to snag a greater percentage of the market, causing traditional retailers to take notice. A 2018 survey by Statistica found that 27% of respondents stated that their biggest ecommerce challenge was direct-to-consumer competitors, ahead of shipping and storage costs, Amazon’s influence, and counterfeit products, among other factors.
While a direct-to-consumer approach can work for nearly any organization and market, 2019 will see particular expansion in categories including kitchen and living room products, as well as offerings connected with health care. There are considerable opportunities in these categories currently, and brands are taking notice.
2. Rising demands for a better customer experience
As with nearly every retail sector, consumers are increasingly demanding better personalization in their shopping experiences, including elements like relevant product recommendations. One critical key to success within DTC strategies is a deep understanding of the brand’s customers. Organizations that are able to gain a view into customer needs and insights will support a competitive edge, increase brand loyalty, and boost their revenues. By having that direct line to customers, DTC brands have a wealth of data that can be used to create a more relevant, engaging experience.
According to a survey from Smart Communications, 61% of American shoppers noted that they’d be willing to share more personal information with brands to support a customized shopping experience.
3. Acquiring customers through social media
Up and down the line, DTC brands acknowledge social media’s vital role in customer acquisition—especially during the early phases of growth. According to research from Yotpo, when DTC brands worldwide were asked about their three leading sources of customer acquisition, social media came out on top, cited by 61% of brands. This number even outpaced SEO (51%), which has long been the most important source of customer acquisition for online retailers.
Whether you are a new brand or just new to DTC, social media is a key acquisition channel. It offers a level of exposure and credibility you may not be able to immediately find on Amazon or other marketplaces.
Creating the right DTC strategy for your brand
In the ever-evolving retail landscape, it is challenging to understand where your brand fits in the big picture, and which strategies you need to employ to succeed.
That’s why DEG created the Direct-to-Consumer Trend Report, featuring the latest DTC industry research, market trends, brand challenges, and opportunities. Take a look and let us know what you’re seeing within the DTC space as we move into 2020.