Direct to Consumer (D2C) is a marketing strategy for brands that sell customer-facing services or products directly to the end-user. It is an alternative and practical model, especially for small and medium scale brands, to engage the consumers without building relationships with intermediaries such as retailers or other online sales platforms. This article will give you insight into how this strategy can be used.
Here are some high-level statistics to give you the context for what a good D2C strategy can do for your brand:
- According to Statista, D2C eCommerce sales in the US reached 111.5 billion USD in 2020.
- United States D2C eCommerce sales, including both digitally native and established brands, grew 45.5% in 2020
- In 2020, D2C eCommerce shops generated $111.54 billion and made up 14.0% of total retail eCommerce sales, according to an eMarketer survey.
- 81% of consumers plan to shop for direct-to-consumer brands.
So, how can you position your brand for maximum results? Read on to discover the 11 steps you need to follow to build a successful D2C brand in 2022.
11 Steps to building a successful D2C Brand in 2022
More and more businesses have been going the direct-to-customer route. Businesses are trying to offer their brand as an individualized experience, so customers will experience a level of personalization. If you want your company's brands to become successful in 2022, these ten (10) steps will help you build and implement a successful D2C or DTC Brand.
1. Create Your Brand's Story
Your brand's story should be about how your product or service will make a difference. This narrative should be compelling, nuanced, and fit perfectly into your target market's hearts. A direct-to-customer business allows your brand's story to take center stage because you deliver the service/product directly to your customer. You must sell your brand to your audience beneficially to their daily lives if you want them to resonate with your brand. Creating a brand story about your products or services will help customers remember and stay loyal to your brand.
2. Identify the essential needs of your customers.
The most daunting part of D2C is the marketing process. Prioritize what is most important to your customers and determine what they'd like to receive.
Ask yourself the following questions:
- What drives consumers to take the next step in the sales process?
- What difficulties do buyers encounter at each step in the process?
- How are consumers able to get around these challenges?
Consumers are interested in social commerce more than ever, with 41% of respondents indicating that they have purchased on social media during the last six months. Many brands are taking notice and have become successful, notably eCommerce company Warby Parker which used both social channels to build their brand. The beauty and makeup industry embrace this trend through tools such as Influenster, which builds out the community at their forum to enable social purchase further. Other D2C brands should follow the trend.
3. Be where your customers are.
It's not enough to offer what you want to sell. It would be best if your brand were within reach of customers. When people think about your products, services, or company, you want them to get a clear connection about how and why you are valuable. There is nothing worse than riding the wave of a great promotion, or establishing credibility in a niche, only to find people who can't easily find you. The benefits of being where your customers are:
- Communication is immediate on social media
- People connect with people, not so much with corporations
- Following up is easy
- It keeps conversations transparent
4. Analyze your market budget
Knowing your market budget can help you identify critical factors influencing your present business and future direction. You can determine where marketing is the most effective and make the appropriate changes. You will save time and grow your business with an effective marketing plan. In addition, analyzing your budget can help you identify the lowest-cost ways to engage with your customers. Competition in the industry can significantly impact your budget. The challenge when analyzing this is that competition exists not only among brands, but also among stores in the same brand family.
5. Focus on Customer Lifetime Value (CLTV)
Focusing on lifetime value will help maximize upsell opportunities. This value could lead the customer toward more profitable purchases and nurture a positive relationship with the customer. The idea behind focusing on lifetime value is that if you can increase profits and sustain the relationship with your customer, you will see more upsells, increasing your revenue and ROI in the long run.
The strategies to achieving high CLTV are:
- Know your customers well
- Identify more profitable customers
- Drive profitable retention at scale
- Allocate your budget to target your ideal customers
6. Build your audience
To fully evaluate your consumer relationships for effectiveness in building a successful D2C brand, collect emails and cell numbers to contact your audience effectively. Emails help provide more personal correspondence with online consumers, while cells allow you to connect with prospective customers at all hours of the day. The key is integrating both the email list and cell phone list into your business systems to create an account-based marketing strategy for D2C brands.
Grow your marketing list
The best way to grow your marketing list is by engaging your current customers. Your message will likely resonate with them, since they already buy from you. It's worth running contests and other promotions to create excitement among people who have already made a purchase. Offer these buyers substantial perks, click-and-collect shipping, coupon codes, or any other promotional method that feels right for your company.
Additionally, list segmentation is a powerful tool to reach even more subscribers. Segment your list based on key demographic and behavioral data points. In addition to gender, age, education, and income level, you can segment subscribers by the products they are most likely to buy and the different ways they shop online. You can tweak your content and product offerings to appeal to each segment specifically, influencing the success rate of your recent sales.
7. Have an influencer strategy
To be successful, you need to ensure that you are reaching your target audience with engaging content that is unique and relevant. Although social media channels can be used for this purpose, influencers are better positioned for this task due to their clout. Influencers are the people who have brand recall and massive influence over their audience. It would help if you used these influencers to promote your product or service. It is, therefore, essential to invest in building your influencer strategy. Some tips include ensuring that you have identified your target influencer and ensuring that they are accessible on their social media handles.
Here are a few types of influencer marketing strategies you can consider:
- Guest Posting
- Sponsored Content
- Co-created Content
- Social Media Mentions
- Contests and Giveaways
- Brand Ambassadors
8. Choose the Right Fulfillment Vendors
An important activity when starting any business is choosing the right fulfillment vendors. When you pick a fulfillment vendor for your brand, find out what kind of products and services they offer and match your budget accordingly. It can be advantageous for new businesses to work with the most experienced fulfillment providers possible to avoid disappointments. Shipping vendors are an essential part of the direct-to-customer fulfillment process. This is also one of the most crucial factors when evaluating the best eCommerce fulfillment providers for your eCommerce business.
What to Look For in a fulfillment vendor are:
- Comparable Size
- Easy to Work With
- Deals in Your Target Market
9. Create a Marketing Plan
Creating a performance marketing plan for a successful D2C eCommerce store is not just about developing a website and expecting revenue to start rolling in. It requires aggressive digital marketing strategies. Although It can be a confusing, time-consuming, and expensive endeavor, it is worth it on the grand scale of things. To drive results, you need to create a performance marketing strategy integrated fully into your eCommerce store with best practices for product launches, social media activities, SEO strategies, and all the involved apps.
The following steps will guide you in creating a performance marketing plan:
- Define your brand
- Create buyer personas
- Set your business goals
- Choose your digital marketing methods
- Set your budget
- Measure results
10. Integrate Customer Service as a Fundamental Form of Branding
Well-branded customer service plays a crucial role for your brand. Customer service helps you stay on top of the game and assist you in anticipating what is likely to be trending and customer change in taste. For example, one of the most valuable companies globally, Apple, operates a 70% D2C model and clearly understands the role of well-branded customer service in business growth. They strengthened their customer service with innovative ideas that ensure their customers will continue to purchase from them.
It is a crucial step to build trust among consumers. It also helps companies grow faster because customers feel they're getting more value out of their time and spend more time engaging with the brand through multi-channels.
11. Prepare Your Staff to Meet D2C Goals
The secret to a successful D2C brand is to engage the services of competent staff aligned with your brand culture. The D2C brand model does more direct communication with final consumers. It won't translate into actual conversions if your brand speaks in robotic advertising or unconvincing marketing language. Developing a robust marketing strategy around your staff will help build a strong brand that keeps customers coming back. You can prepare your team to meet goals by implementing the following principles:
- Train and retrain your employees for better performance
- Task people meaningful work aligning with their skills
- Provide positive feedback often
- Offer welfare packages like incentives, promotions, and encouragement to your staff.
When it comes to direct-to-consumer brands, the key is creating trust among consumers who know your company's mission, vision, and values.
Curious about whether your brand is poised to succeed in the D2C space? Need advice from Shopify Plus experts for getting started? Schedule a call with one of our eCommerce veterans today.
Photo Courtesy of Roberto Cortese