The disruption sweeping through the retail industry isn’t new. The concept of companies marketing, selling, and shipping their products directly to customers, without any middlemen, has been around for years.
The direct-to-consumer approach continues to gain steam as the increase in customer demands, changes in customer behavior, and the need for first-party data have made the strategy an intriguing one to established and up-and-coming brands alike. Yet many traditional brands have been slow to adopt DTC strategies.
Wherever you are in your DTC journey, our guide is designed to provide you with actionable next steps for operationalizing your DTC strategy.
According to IAB’s popular new study, The Rise of the 21st Century Brand Economy, the future of retail growth comes from direct consumer relationships.
Today’s direct-to-consumer landscape
As consumers shift their purchasing habits and buy more online, many brands are recognizing the importance of a DTC strategy in fostering deeper connections with their customers and having more control over the buying journey.
Today, three key trends are driving the growth of DTC channels:
1. Fierce competition
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Faced with growing competition from DTC brands and a shift in sales from brick-and-mortar stores to online channels, traditional retailers are implementing DTC strategies to better stand out. In the process, they are establishing deeper relationships with their customers, getting access to valuable insights about their customers’ buying behaviors, and gaining the ability to deliver a personalized buying experience.
2. Consumer expectations
Today’s consumers expect a personalized experience with relevant content—such as product recommendations and deals—served at appropriate times. With a direct line to customers, brands gain a wealth of data that can be used to create more relevant, engaging experiences.
3. Online customer acquisition
Online channels and social media sites, like Google, Instagram, and Facebook, are among the leading sources of customer acquisition for DTC brands and are key drivers for growth.
$586.92 billion: The amount U.S. consumers are estimated to have spent on ecommerce in 2019, representing an increase of 14.0% vs. 2018 and 10.7% of total U.S. retail spending.
Source: eMarketer, US Ecommerce 2019
The real challenge
DTC brands have taken the market by storm and are changing the expectations consumers have for how they relate and interact with their favorite brands. With well-known benefits, both large and small retailers are committing resources to focus on growing their direct sales. However, putting a DTC strategy into place is only the first step. Putting that strategy into action is where the real challenges come in.
Download the full DTC strategy guide to gain more insights into how to activate a successful DTC line of business for your brand.