Selling products or services on a direct-to-consumer (DTC) basis is tailor-made for the digital age. Inherently driven by e-commerce, DTC companies are at a huge advantage over traditional brick-and-mortar retailers, many of which have had to quickly optimize their digital CX, particularly due to the COVID-19 pandemic.
Indeed, DTC brands have become a common source of products, with nearly 7 in 10 US consumers (69%) having made at least one purchase from a DTC brand in the past year, according to Diffusion’s 2021 Direct-to-Consumer Purchase Intent Index. The index also found that perception of higher quality products is driving purchases, with 44% of respondents indicating that they believe DTC brands produce a higher quality of product at lower prices than traditional competitors, and 23% perceiving DTC brands to be an authority of what’s “cool” and “on-trend.”
However, competition remains fierce, and retailers are upping their game. Buoyed by an increasing use of customer journey data, omnichannel outreach and CX communications, and more flexible fulfillment options, DTC companies need to maintain their focus on CX to retain and attract new customers amid more restrictive data collection and use practices.
DTC companies once relied on the use of third-party cookies to gather data and enabled these brands to find and advertise to their target audiences online. However, led by efforts from Google and Apple to phase out these third-party cookies, DTC brands need to take a new approach to lead generation that relies more heavily on the data they already have.
Some of the key strategies and tactics that can be used by DTC brands include the following:
- Deploy a seamless omnichannel experience: By capturing and unifying customer touchpoint data, and then creating seamless experiences across all channels, potential customers see a unified brand presence that demonstrates competence and professionalism. This is particularly important when the DTC product competes against products that are easily available via a traditional retail channel.
- Focus on capturing prospects’ attention: One of the side effects of the digital age has been a decline in the attention span of prospects and customers. There is a finite time to capture the attention of a customer and make a positive impression. That is why DTC companies should focus on interesting and engaging content that will capture the attention of customers, as well as keep them engaged with the brand over time. Creating how-to or explainer videos, testimonials from influencers and customers, and other video content can often grab attention quickly in a way that static photos or text cannot.
- Retain customers’ attention: DTC companies need to create customer experiences that help retain customers’ attention over time, so they continue to come back to repurchase products again and again. In addition to video content, engagement with the brand is key. Customer experiences should be interactive and engaging, capturing customer feedback, preferences, and desires, and should link them directly to the products on offer. Further, creating behind-the-scenes content that illustrates the superior quality of the product, compared with competitors, can reinforce the value of the brand, and given the direct nature of online purchasing, can directly impact sales in a positive manner.
- Ensure supply chain and fulfilment visibility: Traditional retailers are often burdened by the constraints of competing against other retailers for manufacturers’ products. While DTC companies generally have more control over the supply of their products, they need to ensure that customers receive the same level of visibility throughout the purchase process. Customers should be able to track, in close to real time, the status of the order, from payment through delivery, in order to match or exceed the experience being offered by large retailers or distributors, such as Amazon.
- Develop deep relationships: Once a prospect becomes a customer, it is imperative to cultivate a deeper relationship with them to boost retention. Specific benefits, such as offering discounted shipping, access to new products before the public, or other tangible rewards, can provide a visible benefit of remaining engaged with a brand. However, being responsive to their queries, providing education and advice, and predicting their needs can also strengthen the connection between a customer and a DTC company.
Without middlemen or large distributor networks, DTC companies are often able to be more agile and responsive to customers. But those that fail to pay specific attention to customer needs or position themselves as a trusted provider of products and services are likely to lose share to competitors from both the DTC universe and retailers.
Author Information
Keith Kirkpatrick is Research Director, Enterprise Software & Digital Workflows for The Futurum Group. Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.
