4 Things the Fastest-Growing Direct-to-Consumer Companies Do That You Aren't Doing
Unlike traditional business-to-consumer brands that depend on retail middlemen like Walmart and Amazon to sell their products through a crowded marketplace, direct-to-consumer companies can connect directly with their customers online.
Before Covid-19, research by PricewaterhouseCoopers showed that 59% of consumers worldwide felt companies no longer offer customer experience with a human touch. While the world still grapples with an economic crisis, customers require this human element when buying products or services. When embracing a direct-to-customer (D2C) approach, business-to-customer (B2C) companies can offer a more customer-centric design, quality and service.
This direct link enables D2C brands to control their messages to customers, which helps to source data that improves a shopper's end-to-end experience. Here's how your B2C brand can replicate D2C strategies to achieve data-driven growth in a post-Covid-19 world.
1. Use data to drive business growth
B2C Companies face a convergence of continually evolving technologies, shifting demographic shifts, economic uncertainty and changing consumer needs. To survive these changes, your B2C brand needs to opt for a D2C marketing strategy to control the customer's entire buying journey online. An online platform will enable you to control, collect and analyze customer data so that they can create a more personalized customer experience.
For instance, D2C meal delivery business Blue Apron uses customer feedback to develop its content, product features and recipes. Unlike most meal-kit businesses, the company caters to unhappy individuals over-buying food for recipes and throwing away the extra ingredients. With this in mind, Blue Apron's recipe kits allow customers to choose kits that possess carefully measured ingredients, which will help reduce food waste.
Moreover, it also used customer data to develop a series of healthy recipes in collaboration with the American Diabetes Association and Weight Watchers. By monitoring what each customer ordered, this D2C brand realized many customers wanted to cook healthier dishes that were high in protein during the summer. In this way, Blue Apron uses data to continually create a more personalized customer experience for a majority of its customers.
2. Explore new business models
While D2C brands originally targeted niche online audiences through personalized direct digital personalized messaging and brand authenticity, many leaders knew that the business model couldn't work forever. They realized that they needed to scale by diversifying their original business model to appeal to a larger audience. In the same way, your B2C brand must explore new business models that prioritize delivering value, even in a time of rapid disruption and change.
For instance, D2C travel brand Away continually uses product diversification to explore and develop its business model. Since 2016, it's expanded from one suitcase to several bags, wellness products and travel accessories. Its selling point has always been to use varied and inspirational storytelling to bring its products to life.
Recently, Away also used its storytelling advantage when launching new pet carriers. It marketed this product through out-of-home advertising (OOH), carried out in pet-friendly cities like Boston, Chicago, San Francisco and New York. The ads were a strategic move for Away as it encourages individuals to get out with a new pet during the lockdown.
Furthermore, Away explored new business models by creating physical retail pop-ups driven by experience rather than sales. By partnering with brands like Nordstrom and Lyft to create these pop-ups offline, Away continues to tell a story to bring its design to life. In this way, it expands on its online presence's visual nature and reaffirms its original brand value offline.
3. Provide superior shopping experiences
No B2C business can use its online or offline stores solely as a transactional platform for a customer's needs. Today, all shoppers seek a more profound, authentic interaction with a brand and like-minded buyers. Statistics also support this by stating that 80% of customers are more likely to do business with a company that offers personalized experiences.
By connecting directly with their end customers, D2C brands have built meaningful connections with customers. They can leverage the data garnered from these online interactions to refine their offerings and products. In this way, D2C brands have improved their ability to meet a customer's demand worldwide. They deliver superior shopping experiences by putting the customer at the heart of everything they do.
For example, D2C pet care brand Bark uses personalization to make dogs happier through its subscription boxes. Customers cannot compare its subscription box's contents to any pet-friendly products as these are exclusive to Bark. This D2C business also tailors the contents of its boxes to the different varieties of dogs. By focusing on data garnered from customer feedback, Bark also created a Bark Shop, which allows customers to purchase single Bark products rather than opting for the subscription box.
Further customer feedback has also resulted in improving the shopping experience through Bark Park, an outdoor dog park community, and the 'No Dog Left Behind' program, which allows customers to co-create Bark products. As a result, Bark has created a superior shopping experience that builds on its online community and stays loyal to its customers' needs.
4. Remain agile as the market changes
Any B2C business needs to remain agile to meet their customers' growing expectations, who expect more every day. However, as B2C companies often depend on third-party distribution and supplier partners, they do not directly access customers. As a result, they cannot actively monitor their customer’s needs. Unlike B2C brands, D2C companies can source and utilize customer feedback to stay agile and innovate in response to any new changes.
For example, DTC company Beauties of Vermont (Beau Ties) demonstrated this agility by revamping its product offering due to Covid-19. It pivoted from creating neckties and bow ties to producing face masks during Covid-19. CEO Greg Shugar started selling KN95 masks, a version of an N95 respiratory mask. Customers who tried these initial masks then asked Beau Ties when they would begin selling cloth masks. Shugar ordered 600 of these masks initially from a Chinese factory that produces fabric for Beau Ties and then increased this to 2000 due to customer demand.
The success of selling these masks prompted Beau Ties to create matching bow ties and masks for customers who wanted to look fashionable when going out and working from home. As a result of this product offering, this D2C company sold more than 5000 masks and hundreds of bow ties in May 2020. In this way, Beau Ties' agility ensured that the company remained profitable during a difficult time.
Your B2C brand can achieve faster growth by using customer data to explore new business models, deliver a superior shopping experience, and run an agile operational system. The fastest-growing D2C companies' four strategies can improve the ROI for B2C brands that get it right.
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