What happened when stores shut down at historic rates during the COVID-19 epidemic? The world discovered the countless possibilities offered by the digital space. E-commerce saw a remarkable boom. But what more brands began to realize was the advantages of a direct-to-consumer (D2C) model.
Today, 55% of consumers prefer to shop directly with the brand. The D2C model lets brands bypass middlemen, to directly sell and market their products to customers. With D2C e-commerce sales in the US projected to surpass 129 billion USD this year, the online D2C market is more competitive than ever. Following the enormous success of pioneering D2C startups like Dollar Shave Club, which became flagship to the new model of CPG brands entering D2C, large legacy brands like Gillette, Heinz and PepsiCo are now catching up.
Whether you are an existing D2C firm or planning to switch to a D2C model, building a strong online presence is paramount to succeed in today’s increasingly hypercompetitive market. So what can you do to attract the next generation of post-covid consumers and stand out from the competition? How can you popularize your brand name and build a loyal customer base?
Here is where a robust marketing strategy plays an important role.
Formulating your winning D2C marketing strategy:
Here are 5 tips for ensuring a winning D2C marketing strategy:
1. Building a digital community with social media and leveraging user-generated content
While driving engagement with influencers and paid media can boost brand awareness, simply leveraging user-generated content for your marketing strategy can work wonders. Consider Glossier– a now 1 billion USD D2C beauty brand that started out as a beauty blog. With an easy-to-navigate website, their displayed products are backed by information verified by real customers. They gave free products to 500 loyal customers to stand as brand ambassadors and linked product reviews to their social media page that displayed photos and video tutorials of diverse people wearing their products. Not only does the brand appear accessible- there is a clear sense of transparency and trust.
Social media can play a pivotal role in garnering real-time insights and increasing engagement. For instance, Nike’s campaign ‘Play New’ engaged customers on platforms including TikTok and Snapchat with augmented reality lenses, getting the youth to ‘Just Do It’. This D2C marketing campaign garnered over 600 million impressions in the first two weeks alone.
2. Imbibe purpose-driven marketing campaigns
Today’s customer looks beyond your product. Aside from delivering quality products, championing a clear brand purpose can garner increased customer support and give your D2C marketing strategy an edge. In fact, consumers are 4-6 times more likely to purchase from and advocate for purpose-driven companies.
Take Harry’s D2C marketing strategy. Differentiating from other men’s care brands by redefining the way they view masculinity is what garnered attention. From earlier collaborative campaigns like “Project 84” highlighting the issue of male suicide to recent donation drives that culminated in a donation of up to 5 million USD to nonprofits in support of mental health care, a large part of their marketing strategy promotes social causes. Their latest lockdown initiative to raise funds for mental health care started the social media trend #8foramate– encouraging people to restyle their lockdown beards, post a picture, donate £8 to CALM, and nominate their mates to do the same. Not only does this encourage more sales, but their customer base is also happier, feeling a sense of purpose post a purchase.
3. Evaluate critical KPIs like search rankings to improve website performance
How can you drive organic search traffic and improve your website visibility? This can be ensured by the following:
- Investing in SEO tools to track your website score
SEO is vital to gain organic search traffic and drive visibility. Investing in SEO tools and solutions can help identify your search rank position, optimize product pages, and engage in keyword research that can help identify trending topic clusters, and other useful tips for driving your content marketing strategy to drive traffic to your website.
- Attention to detail: Offer product information in consumable formats
Providing comprehensive product information plays a key role in building customer trust. Today’s customer likes to be well informed before making a purchase. Ensure product information is available in all formats. For instance, a clothing D2C store will have to ensure that their size chart is readable, substantiated by accurate graphics, and easy to understand- to make up for the lack of real-time product visibility.
- Utilize high-quality images and create a superior website UX with the latest technologies
Product information backed with high-quality images is essential to improve the website user experience. Make the most of emerging technologies to create a customer-first website experience. The use of PWAs (Progressive Web Application) is a great way to get started.
4. Drive engagement with smartly-designed email marketing campaigns
With almost 80% of US consumers using email, email marketing is a powerful tool for your D2C brand. Succeeding in your email marketing campaigns involves a clean and up-to-date, organized contact list. Take your campaigns a step further by playing around with an innovative design and visual elements. A clean, well-structured, innovative campaign really helps stick with the reader. Regular contact with consistent mailers that involve newsletters, promotional campaigns, or even the occasional mail that checks on your customer’s well-being can help nurture leads.
Look beyond click-through and open rates. Utilize tools like heat map tracking and analysis to better gauge campaign results and make improvements. With heat map analysis for your mailers, you can identify where it is cluttered, what stands out to the consumer, how effective white spaces are, and the readability of the design.
The example below is a welcome mailer for all new subscribers of the brand ‘Purple’. Its clear call to action and crisp, straightforward template drive greater brand recall.
5. The personal touch: Exclusive subscriptions and loyal-customer discounts
Customers want personalized experiences. Offering exclusive assortments to your customers helps you tailor campaigns and differentiate yourself from the competition. Considering that 60% and more of the D2C brand revenue comes from existing customers, recurring revenue models like subscriptions and memberships play a key role in ensuring D2C success.
For instance, pet-care brand BarkBox has established personalization as the hallmark of its offerings- with large discounts for periodic subscriptions. Taking each individual customer’s requirements into account, they send out over 120,000 varieties of boxes monthly. From responding to individual customer emails to engaging in personal conversations with at least one-third of its customers every month, they’ve established their brand as a must-have subscription service.
For popular Indian D2C apparel brand, The Souled Store, the pandemic catapulted its online sales to over 100,000 orders a month with a revenue spike of up to 60%. How were they able to achieve this? This was largely due to their discount offerings to their loyal customer base. Putting out an honest video and an ad, the team offered a flat 30% discount on merchandise for orders that were prepaid.
The way forward
Ensuring end-to-end transparency and visibility is the way forward for D2C brands. Being honest, and straightforward about your offerings, lets your customers know that you are reliable. From the buying experience to post-purchase customer care, ensuring a constant flow of communication with your customers is all it takes to earn brand loyalty. Play around with innovative marketing campaigns. This not only builds customer intrigue and engagement but also fosters a sense of community.
One stellar example of a D2C brand that boomed with its bold ‘no BS’ approach to marketing its product, is Ugly drinks. “Embracing ugly truths” has been a key marketing strategy that has catapulted them to growth by 600%! Incorporating all the elements of a winning marketing strategy, they have addressed hard topics to promote worthy social causes, capitalized on their social media community to engage with their customers, and driven up to 28% of revenue from their email marketing campaigns!
Estimates indicate that the pandemic-driven D2C boom could be worth over $58 billion for CPG companies. With D2C becoming the future of CPG brands, embracing its smart adoption and strengthening your D2C marketing strategy is the way forward.
Today’s digital space is open to partnerships and collaborations. As a lone D2C brand, it can be daunting to navigate the vast digital landscape. Data collection can be challenging. Work with partners including data and insights firms, to gather accurate and timely consumer insights. This can help you understand your customer behavior and tailor your services accordingly. Develop your CPG market strategy for the next normal with Netscribes’ in-house research expertise and market intelligence solutions. To know more about how we can help you deftly navigate the road ahead, contact us.