This “Outside Consultant” column by Kim Sovell, a faculty member in the Marketing Department at Opus College of Business, ran in the Star Tribune on Feb. 14, 2022.
Direct-to-consumer (DTC) brands have been big in recent years. In the past, consumers developed a relationship with department stores, not brands. Consumers are now developing relationships with brands and bypassing traditional stores. New brands have launched DTC and some brands have expanded into the DTC market because this approach works.
Think about the brands we know, such as Warby Parker, Away, Casper, Rae Wellness. Many of these brands are worth over a billion dollars. These brands started as a direct-to-consumer brand with no brick-and-mortar presence. Many of the DTC brands started with a social media campaign and grew from those roots. Some have a retail presence now, like Away, but many are trying other retail formats like pop-up shops or leasing space within an existing retailer: a store within a store. Because of the success of these brands, even more companies are coming into this market in 2021. For example, the SmileDirectClub provides 100% clear liners for your teeth. Outdoor Voices is a new company promoting activity and recreation.
To break out as a direct-to-consumer brand, websites should provide consumers with detail and information consumers need to familiarize themselves with the brand and access it. It’s important as a DTC brand that pricing is flexible. There’s no need to reduce the pricing, as originally thought with DTC brands, but offering 20% off a first order to establish a subscribe-to-save habit does get consumers reliant on receiving and using a product.
Brands should also provide consumers with a way to purchase and receive the brand easily. If the brand is being carried in a brick-and-mortar store as well as online, the brand should work toward a seamless omnichannel experience for consumers. Make sure the product is available and accessible in multiple different ways, so consumers have options to shop for and purchase the product. When consumers see a direct-to-consumer product in a store like Target or Nordstrom, or in a branded brick-and-mortar store like an Away store, the decision to support and use that brand is reinforced.
Don’t forget the importance of building a relationship with consumers through customer support, personalized emails and curated consumer experiences beginning with opening the first package. These are all opportunities to connect and bond with a consumer.
Kim Sovell is on faculty at the University of St. Thomas Opus College of Business.