Direct-to-consumer marketing (D2C), is rapidly becoming the preferred route for CPG (Consumer Packaged Goods), brands and manufacturers to enter the market directly, rather than through a middleman.
It’s not surprising, as there are many benefits to going directly to the end-user.
This allows the manufacturer to engage directly with its target audience, learning from them, and improving its products.
Quill, a leading brand in office supplies manufacturing, has already made the big leap into direct-to consumer marketing. It is expected that many more producers will follow their lead in 2022.
However, even though there are very few or no entry barriers for manufacturers to begin direct-to-consumer advertising models, it is important to remember that you will be competing with retail giants like Amazon and Walmart who already have large customer bases.
You must have a strategy that will help you stand out and change the marketing paradigm in your niche.
This article will cover everything you need to know about direct-to consumer marketing. First, let’s clarify what direct-to-consumer marketing is.
What is Direct-to Consumer Marketing (D2C), and how can it help you?
Direct-to-consumer (D2C) is an eCommerce strategy with low entry barriers that allows Consumer Packaged Goods manufacturers and brands to reach and sell directly to their target audience ( the end user).
This approach is a bridge to the traditional method of engaging traditional retailers or resellers to get your product onto the market. Direct to consumer is when a company sells directly through an online medium to the end-user.
Direct-to-consumer offers many benefits, as we have seen with the introduction of competitive pricing.
Producers also have direct contact with end-users to better understand their target audience. They can also experiment with new offer release releases by sharing new products with consumers to gain feedback and reviews.
Why D2C Marketing over wholesale?
We have already shown that direct-to-consumer marketing is a more effective way to market than the traditional model. Producers can eliminate the reseller or middleman and sell directly to the consumer.
But, just because the retailer is out of the picture doesn’t mean that dtc companies don’t include the retail side in their strategies.
The direct-to-consumer route, in other words, means that the producer is fully responsible for all retail sales within the business. This includes the initial production and fulfillment.
The approach may be questioned by some who might ask why a producer would take on such a large responsibility when they could simply continue selling their products to traditional retail outlets at wholesale.
Two aspects are at the heart of the reason: both depend on the behavior, expectations and changing needs of the customer today.
The modern consumer expects to interact directly with the source when researching to make a product selection decision.
59% prefer to research the manufacturer’s site, with 55% preferring to shop the same.
It’s easy to see how a customer who is looking for a tennis racket for purchase will visit the manufacturer’s website before buying.
Imagine if the manufacturer failed to provide the information consumers needed on their website. This customer is likely to be frustrated and may choose another brand.
It is a smart move for dtc companies to invest in direct-to-consumer marketing in order to meet consumer expectations.
Important to remember that many consumers will be purchasing directly from the source, which means they will not be dealing with retailers or resellers.
As a manufacturer, you cannot rely on retailers or resellers to sell your products. You will need to manage your own sales and marketing strategies.
What are the Key Factors to Consider when Going Direct-to-Consumer (D2C), with My Marketing Campaigns
If you think going direct-to the consumer sounds more appealing and appealing than the wholesale option, and you want to use the marketing strategy to acquire customers, there are two main pitfalls to be aware of:
1. Make sure your business is ready to transition from wholesale to direct-to-consumer
It won’t happen by accident. You will need to put in a lot of effort.
Manufacturers who want to shift to direct-to consumer models should invest in training and enabling their workers. They also need to be able to integrate new processes into existing ones. This will ensure that your company is able to operate profitably under direct-to consumers marketing.
You must also have a clear reason for why you chose direct-to-consumer. This reasoning must be communicated to your employees and target audience in a way that is beneficial to both.
There’s a high chance that your direct-to consumer efforts will fail if there isn’t transparency and clarity.
Open communication with customers and colleagues is key to ensuring that everyone affected by the transition is ready and available.
2. Get your partners ready
You have the potential to alienate and harm your retail partners if you choose to sell wholesale to retailers along with directly to end-users.
You are effectively selling directly to consumers and can compete with your retail partners who sell your products. As we have seen, the customer will choose to purchase your product either directly from you or through retailers.
While you don’t want your partner to take your business, you don’t want your products to remain unsold on their shelves. Instead of cutting all ties with retailers, engage your partners in order to find a profitable way for you both to move forward.
It could be selling specific products directly to consumers or shipping high-performing items to certain retailers. Or it could involve partner retailers taking a more direct approach to promoting your products.
No matter what, you should look for a way that both of you can make money.
Marketing Strategies for D2C Brands
Direct-to-consumer brands approach marketing in a different way than conventional manufacturers. The most striking difference is that direct to-consumer businesses have full ownership and control over the customer journey.
This is not a job to be taken lightly. This added responsibility has the advantage that d2c businesses can sell their products and brands however they like, or more accurately how they feel they will engage customers and build loyal customers.
This is broken down into simple points: Direct-to-consumer brand have full control over the following:
- They should know who their target audience is.
- How they establish relationships with end-users
- How the brand provides value to its target audience.
Companies are increasingly choosing to sell direct to consumers because the traditional retail experience is not satisfying modern customers. Direct-to-consumer brands can’t simply duplicate the customer experience.
You must offer something new in terms of the marketing strategies used and the channels they are implemented.
Direct-to-consumer is a way to free yourself from the constraints of the traditional business model. It allows you to interact with your target audience in a way that you know they will like.
Direct-to-consumer can help you connect with your target audience in a way that is more personal, engaging, and meaningful.
Is Direct-to–consumer (D2C), a passing fad or here to stay?
We’ve covered the amount of investment required to transition to direct-to consumer marketing in this article. This raises some questions.
- Will end-users still choose direct-to-consumer brands like they did in the past?
- In an effort to regain their footing, will there be a rapid expansion of retail stores?
The primary question is:
- Is it worth the effort to go direct-to-customer for your brand or is it a temporary fad?
Direct-to-consumer companies are in the spotlight. You can see direct-to-consumer companies popping up everywhere, thanks to the successes of brands like Warby Parker, Away, and Casper. This doesn’t mean this marketing strategy is going to disappear. The explosion in direct-to-consumer business is not arbitrary.
Direct-to-consumer companies have enjoyed such great success over the last few years due to their ability to adapt to changing customer needs, such as providing authentic and personalized service online and offline.
The decline in brick and mortar shops was not random. It was due to brands’ failure to meet customer expectations. Consumers want to be able to engage with their companies in a more personal way. This is not a passing fad.
Customer experience is becoming more important as time passes. It is expected that it will surpass product and price to be the distinguishing factor that differentiates your brand from others.
The question is not whether direct-to–consumer will lose its relevance, but whether your business will continue using direct-to–consumer marketing effectively and profitably into the future.
Moreover, direct-to-consumer marketing is a hot trend in eCommerce platform marketing. Companies using this approach can expect to see their strategies evolve and make them stand out from the rest.
7 Tips to get started with D2C marketing
You must stand out from the beginning of your direct-to consumer brand launch to differentiate your brand from your competitors and establish a niche. Here are seven ways to get started:
1. Your product and marketing methods must be focused on customers pain points
Your branding and product messages should be focused on solving industry pain points. Take Bonobos for example. One of the oldest direct to consumer companies is the male fashion brand, which was founded in 2007. They had a clear goal when they began: to make better pants for men.
Two things were discovered by Bonobos before the launch.
- Many men struggle to find the right pair of pants.
- Men don’t like or enjoy going out to buy pants and shop for them.
Further research led to the discovery that pants made in Europe were often too tight around their thighs. Conversely, pants made in America were very loose and high-rise.
Bonobos set to work creating pants that fit between these extremes. The company’s growth was boosted by the positive reviews of early users who shared their product’s initial promotion. They expanded their product range over the years to include formal wear, swimwear and other types of cloth.
2. Accept Simplicity and Choice
Casper, a direct-to-consumer mattress company, found that purchasing a mattress was difficult. The sales staff was pushy and overpriced, with many options for consumers causing confusion.
Casper’s unique approach was to the mattress market. The company offered one model of a mattress and delivered it directly to the customer’s doorstep at an affordable price. Casper was able to achieve $1,000,000 in sales within the first month and $100,000,000 within two years.
The company discovered that many of their customers preferred a latex or foam mattress during initial research. Casper created a mattress that fulfilled both of these desires.
Although some consumers prefer innerspring or air, they were not able to sell enough mattresses so that they could focus their efforts on one mattress.
Before you can transition to direct to consumer or create a direct to-consumer brand you need to understand why you are entering the market.
Dollar Shave Club, Harry’s had their reasons for entering the direct-to consumer market. It was because the cartridge razor market for men was dominated by Gillette at $6 per blade.
These two disruptive direct-to consumer brands saw an opportunity and decided to disrupt the market by offering affordable solutions to end-users. Harry’s, for instance, sells razor cartridge blades at an average of $1.87 per one. Customers can choose between a regular $8 rubber handle or a 20-millimeter metal finish.
4. Offering Simple and Costless Returns
An idea adopted by brands like Bonobos and Casper, Dollar Shave Club retention numbers which show that about half of their customers still use the service after one year. The brand retained 25% of each sign-up after 24 months. This recurring revenue, combined with the high retention rates resulted in rapid growth.
6. Celebrity influencers are a great way to get the word out
Jessica Alba used her 11 million Instagram followers to launch The Honest Company in 2011. It became a household name.
The business grew to a staggering $10m in revenue within a year. It also reached $150m by 2014, just one year after its launch.
While it is true that not all CEOs are celebrities, but it can be a huge help in marketing your product.
Casper’s mattress reached out to many Instagram and Twitter Influencers as part of its promotion. They even used Hollywood connections. Although influencers can be costly, there is a huge payoff when they are active online.
It’s easy to see the examples of Kylie Jenner sharing a photo of a Casper mattress that she bought in March 2015. This picture generated over 800,000.+ likes and nearly doubled Casper’s sales.
7. Create viral visual content
The Dollar Shave Club has created a viral video that is well-known and popular. It has more than 25,000,000 viewers. This video was created by the brand for $4500 and features Michael Dubin, the CEO, giving a nonchalant and sarcastic speech.
The video was published on March 6th 2012 at 6:30 AM. After that, the website for Dollar Shave Club crashed. When it was restored, more than 11,000 orders were still awaiting processing.
Although the Dollar Shave Club video’s success may seem random, many steps were taken to ensure that the video was viral.
- The video was promoted on social media by the brand for more than 10,000 dollars.
- A shorter version of the video was shown on late-night TV.
- The brand reached out to many publications and allowed them early access.
- They paid cash to be mentioned in shows like Howard Stern.
- They reached out to websites and blogs that were well-known as tastemakers for their target audience (males).
These steps helped to increase the video’s reach. The video was also funny.
Major Brands Selling Directly to Consumers, Rather Than Through Retailers
It’s not surprising that many of the most respected brands, which have been operating traditionally for a long time, are now going direct-to the consumer.
In response to Harry and Dollar Shave Club’s huge success, Gillette launched a new service for on-demand shaving. Unilever purchased Dollar Shave Club in 2016 for $1 billion. This is an example of a major brand moving to direct-to consumer through a merger with an existing direct-to customer brand.
As we have seen, it’s not a matter of whether major brands should adopt a direct-to consumer marketing model. While direct-to-consumer may work well for some businesses, it may not be the right choice for others.
These are the questions major brands must answer before they make any changes.
- Is your business able to operate a hybrid model that combines the wholesale and retail aspects of your business?
- Are you able to reach a mutually profitable and profitable agreement with your retail partners? Do you have a plan for how the agreement will be implemented?
- Are you prepared to assume full ownership and control over the experience of your target audience?
It is important to note that direct-to-consumer marketing is not a magic bullet that will instantly make your brand great. It will be a disaster to implement the marketing model without understanding the details.
If you are clear about what you want to offer your customers, and you have decided that direct-to-consumer is the best way to do it, then you should start planning the transition as soon as you can.
Wholesale brands can engage directly with end-users through direct-to-consumer advertising. This approach allows manufacturers to represent their brand and provide the customer with the experience they desire. But if done incorrectly, it can cause damage to the brand.
Use the information in this article as a guideline to create a direct-to consumer marketing model that is relevant to your industry and target market.