In recent years, there has been an upsurge in the value experience has on a consumer. According to Salesforce’s State of the Connected Customer Report, “Customers’ standards for modern engagement are a far cry from the transactional one-size-fits-all experiences that were once a norm. Today, 84% of customers say the experience a company provides is as important as its products or services” and “[73%] of customers say once extraordinary experience raises their expectations of other companies”. For that reason, more and more companies are adjusting their efforts to focus on direct-to-consumer (DTC) marketing.
What is direct-to-consumer marketing?
Direct-to-consumer marketing, or DTC, is a marketing approach where companies sell products directly to the end customer, often through digital channels, eliminating any middlemen from the supply chain – for example, Amazon. Trends show that within the next five years, 40% of US internet users will expect DTC brands to account for at least 40% of their purchases.
Glossier, Warby Parker, BirchBox, Allbirds, Casper, and Billie are just a few examples of companies many that already use the DTC marketing approach. There are also companies who are in the midst of shifting their marketing strategy to focus on this DTC approach – for example, Nike. According to CEO John Donahoe, “As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail.” We can expect to see more in the coming years tweaking their efforts to align with this direct approach.
What are the benefits of direct-to-consumer marketing?
Since consumers value the experience they have with a product’s brand and it goes beyond simply purchasing a product, the direct-to-consumer approach allows companies to create and control the experience they offer to the end-user. Whereas, with a middleman, that personalized experience would get lost.
- Companies have greater control over the brand voice since they are not speaking to their values through someone else’s voice
- Companies could experience a decrease in costs since the middleman is being removed from the selling equation
- Companies have the ability to manage the quality of the products being sent to consumers
- Companies can enhance their consumer experience by being the one-stop-shop – eliminating the consumer needing to deal with the middleman
- Companies will be able to collect accurate consumer data for reporting and optimizations purposes
- Companies will be able to offer highly-personalized products which will enhance the consumer experience
What does that mean for you?
To continue to be a competitor in your industry, it is important to find opportunities to better enhance the customer experience and strengthen your relationship with your consumers. For example, you could use digital platforms, such as social media, to portray the value behind what the product actually does and what the consumer will experience from purchasing the product (e.g. personalized subscription boxes tailored to align with their health needs). While a complete switch away from eCommerce may not be possible immediately, there are opportunities to move in that direction towards DTC – and we highly recommend doing so!