One of the first things you learn in the world of marketing is the difference between business to business (B2B) and business to consumer/customer (B2C) organisations. One sells to businesses, whilst the other sells to end users. In reality, these are oversimplified terms, as there are always other suppliers, manufacturers and retailers involved in these processes. However, in the past ten years, businesses have emerged which are managing and owning, on the whole, every part of their production and delivery process in house. These brands are often referred to as Direct to Consumer (D2C) brands. In this post, I’m going to tell you why I love them and what you can learn from them.
Direct to Consumer brands can loosely be defined as businesses which sell their own products directly to the end user through their own channels. A more strict definition would be that they only sell through their own channels. Whilst this is mostly accurate and the way they all begin, they often seek to broaden their channel strategy once they have matured.
Over the past ten years, this form of doing business has erupted and there are some incredible success stories that we can all learn from. There are common themes across many of these stories. The businesses target common pain points that consumers have in often mature and relatively stagnant markets, challenging the status quo and delivering a truly improved experience for the consumer. Through this aggressive and disruptive approach, they build high affinity within their markets and consumers quickly become advocates for their favourite D2C brands, further fueling the quick growth that a lot of the brands see.
Great examples of this can be found in the Men’s Razor market. Harrys and Dollar Shave Club have revolutionised what was a relatively stagnant market. They targeted pain points of high razor refill prices and confusing options for customers, simplifying the offering and streamlining the ordering process. This, coupled with a superior product offering, created a no-brainer for customers and as a result, both brands have seen huge success.
In the mattress market, similar companies have capitalised on similar consumer frustrations to build large market shares in a very short period of time. The idea of shopping for a new mattress isn’t one that enthrals many people. It usually entails trudging around a retail park comparing 100’s of mattresses, all of which are effectively the same, before eventually choosing one and subsequently being hard-sold an extended warranty. Enter brands like Eve and Simba, stripping back the process of choosing a mattress and delivering it to your front door in a hassle-free manner. At the heart of these successes are brands with great products whose offering is magnified by the efficiency of a streamlined consumer journey.
There are numerous other success stories to check out (see Allbirds, Brushbox and Away) and there are similarities to be found across a lot of these. What I’m not about to say here is that you should sever all of those hard-earned retailer relationships and sell solely through your own website, but there is a lot to be learned from the way D2C’s do business.
Keep it simple
A common theme across a lot of D2C success stories is that the customer journey and decision-making process is kept simple. Of course, it’s a little easier for the brand selling 3 variations of one product than the retailer with thousands of SKU’s, but the simplicity goes further than just the product range. Simplicity in the way your offering is explained and the way your products are visualised, described and differentiated can make the customer experience a lot smoother. If customers are able to find what they’re looking for quicker in your navigation and convert in an efficient manner then you will see basket abandonment decrease and revenue and conversion rates increase.
Be genuine and transparent
A lot of the brands that I have looked at for this post use simple, casual language to convey their messages, at every touchpoint. Consumers have become numb and possibly even repelled by overtly sales led or not particularly transparent marketing messaging. It is refreshing to see brands being human with the communication to their customers. One thing that really helps in this area is putting faces to names; the more senior, the better. A lot of D2C brands position their founders as spokespeople for the brands. This helps consumers get a better idea of who they are dealing with and again helps build affinity and create brand advocates. Having visible spokespeople can also help in other areas. For example, it is very beneficial when running Digital PR activity to be able to lead with a well-known spokesperson fronting your campaigns.
Be clear and aggressive with your strategies
Most D2C brands launch themselves into mature markets which are dominated by well-established household names. In order to wrestle any market share away from these businesses, they must be clear on their strategies and aggressively pursue their targets. This often takes the form of large media buys, be that online or offline, but this of course comes at a significant cost. Thankfully, big budgets aren’t a necessity. What is important is a clearly defined strategy, in both approach and targets, and that you set to work to achieve these.
A great success story of an alternative approach to a launch strategy is the rise of makeup brand Glossier. Glossier started out as a makeup advice blog, expertly answering questions on a wealth of different topics and building up a loyal audience of trusting fans. With this audience built, their products were launched and their army of brand advocates couldn’t wait to try out the new products.
Be properly customer focused
“We need to be customer centric” and “put the customer at the heart of what we do”. These are phrases that you’ll hear in boardrooms up and down the country, but I have a feeling that a lot of the time it’s just a case of lip service being paid and little else. To really be customer focused, every decision that you make as a business needs to be based on the impact that it has on the customer, rather than your internal systems and processes. Now, I’m very much aware that that is easier said than done. To adjust things in such a way could represent a fundamental change in the way your business is run, but it is something that D2C brands are doing really well. Starting from scratch meant that they could arrange themselves in such a way that they were able to remove multiple pain points from the customer journey. From fast, easy to navigate websites to 24/7 instant customer service, these brands are a great example of the success that can be achieved if businesses really do put the customer first.
Utilise subscriptions
This might not be applicable to every business. No one is going to sign up to a matress subscription. If, however, there is a viable reason why you could offer your products on a such a model, the benefits are multiple. Firstly, for the customer, you are removing the need for them to remember to rebuy whatever it is you are providing. If every month, you get a new set of blades for your razor delivered to your door, it’s one less thing to worry about. This is another reason why D2C brands are able to be so customer centric. The second benefit can be seen on your bottom line. Subscription business models generate predictable recurring revenue and allow you to accurately measure your customer lifetime value. If you have this information, you are able to make more informed decisions about your target acquisition costs and grow your business sustainably, making customers happy in the process.
It’s clear to see that I love D2C brands. The phenomenal growth and capturing of market share that they’ve achieved is no coincidence and there’s certainly a lot to be learned from their strategies. Taking inspiration from one small part of their models could see a great improvement in the way your business performs and what your customers think about you.
