It seems like everywhere you turn analysts are advising CMOs to take their brands direct to consumer. And it’s not surprising given the upward trajectory of the D2C market in recent years.
Since 2016, ecommerce D2C sales in the US have more than tripled, with the pandemic alone fueling 45.5% growth from 2019 to 2020. By 2023, D2C sales are expected reach nearly $175 billion in the US, and significant growth is expected in international markets, such as China, making this channel too lucrative to ignore. D2C is becoming a key to brand longevity in a digital age.
However, mature, legacy brands looking to make a real play in the D2C channel have a large, slow ship to turn. When you are not digitally native and don’t have built-in D2C strategies, moving to a D2C operational model means overhauling everything—from your budgeting to your logistics to your technologies to the basics of your brand positioning.
So what should CMOs of established brands do when you have legacy brand plans in order to prioritize D2C?
Reexamining the tools and resources already at your disposal is good place to start. Below are four actionable tips for mature brands to follow as you steer your ship toward a D2C brand model.
Put Your Brand Purpose on The Frontlines
Every marketer knows the importance of brand purpose. After all, it’s why your brand exists in the first place. And in today’s marketplace, brand purpose is a driving factor in consumers’ purchasing decisions. Zeno Group’s 2020 Strength of Purpose Study found that “global consumers are four to six times more likely to trust, buy, champion and protect those companies with a strong purpose over those with a weaker one.”
The importance of brand purpose in the D2C space can’t be underestimated—it’s a key engagement point for consumers in the increasingly crowded market. Because many D2C brands are built with a specific purpose in mind, generating stories that demonstrate their raison d'être is an important growth strategy. It builds engagement, trust, loyalty, and emotional connections in a digital environment when direct brand interactions aren’t possible.
But established brands face a challenge here: the commoditization inherent to a traditional retail model often puts brand purpose in the backseat. To be competitive, it’s time to put your brand purpose on the frontlines, so to speak. You’ve already spent decades evolving your brand purpose and cultivating the emotional connections necessary for D2C success. Young brands have not had the luxury of time to reinforce brand values and build brand love with consumers to the same degree.
But you can’t rest on the emotional connections of yesterday. As consumer attitudes and outlooks have shifted over generations, you must ensure the stories and emotions you evoke speak to a modern, digital audience. Purpose-led, mission-based brands must reinterpret their core brand values in new and innovative ways.
How do you do this?
The first step is reconnecting with your brand’s roots. The founding mission and vision are your brand’s building blocks and prioritizing these core values within your initiatives will help provide the lens for viewing all your marketing—both internal and external. Put your brand purpose at the top of your briefs and proposals, focusing on your brand’s usefulness, not on its success.
Restructure Your Organization
With your brand purpose now top of mind, it’s time to think about the structure of your marketing operations. It sounds daunting but taking a close look at your internal structures and ways of working can help remove the roadblocks that keep you from being nimble. D2C brands have the advantage of agility and tend not to have the organizational baggage that mature brands have. So, it’s a good strategy to figure out what’s holding you back.
Is it how your teams are structured? Old workflows? The wrong technologies? Tired marketing campaigns? Poor brand reputation? Red tape? Bureaucracy? Answering some of these questions can help you develop a roadmap for delivering both your marketing and products at the speed required to be competitive in the digital marketplace.
One method for achieving agility quickly is to form a smaller D2C taskforce within your overall brand team. This taskforce should be empowered to operate within your brand guidelines but at the speed of the marketplace. Not being hampered by the “establishment” can help you be as responsive as smaller D2C brands without completely blowing up your normal brand operations.
Foster Smart Partnerships
As a mature brand working to appeal to new audiences, you have a great opportunity to leverage old and new relationships with partners who may already have the hearts and minds of your target consumer. One of your great strengths is respect and recognition in the marketplace, and a smart partnership can inject new life into your brand.
For example, General Mills developed a new activation strategy to leverage their 40-year relationship with the Star Wars franchise. They found creative ways to appear on the red carpet and engage with Star Wars fans. Through an immersive experience at the El Capitan Theater in Hollywood for the premiere of The Rise of Skywalker, fans, celebrities, and influencers sampled cereal, learned about the historic partnership of the two brands, and immersed themselves in an experience that combined futuristic digital points, “space-grade” cereal sample packs, and memorabilia aboard an “earth-based space station,” making every moment Instagram-worthy. General Mills has also sought new relationships with brands that have significant cultural impact, such as collaborating with Nike to create sneakers to be delivered in Wheaties boxes.
But CPGs aren’t the only ones looking to leverage partnerships to engage new, digitally focused audiences. As malls have lost foot traffic—especially considering the pandemic—legacy clothing brands are looking to revitalize their D2C channels through partnerships with cultural icons. The goal is to become relevant to younger generations who prefer hanging out on TikTok to the mall.
For example, the Gap is working with Kanye West’s Yeezy brand to design an exclusive line of clothing, due out later this year. In early June, Yeezy/Gap released a jacket as a teaser of the line to come, with Kanye sporting the jacket around Los Angeles as an anticipation builder. Gap deleted all its Instagram posts to leave a single image of the new Yeezy jacket as part of the promotional campaign. Their strategy has been a success. The jacket sold out within a few hours, and Gap stock has gained nearly 130% as the retailer builds momentum to draw in new customers or entice long-time customers to return to its stores.
Hollister has also similarly leveraged a partnership with influencers Charli and Dixie D’Amelio to develop the Hollister-exclusive brand Social Tourist. Social Tourist launched following a hugely successful Tik Tok campaign with the D’Amelio’s as Hollister’s “Chief Jeanealogists.” They tested and promoted Hollister’s denim and launched the #MoreHappyDenimDance challenge on their TikTok channel, which garnered more than 5 billion views globally. The Social Tourist brand will be one of Hollister’s first standalone, digitally-driven brands and is set to be a long-term growth vehicle through a digital-first mindset and social selling.
Putting Digital First
As the Hollister example above demonstrates, a digital-first mindset is imperative to success in the D2C space, especially when you consider that today’s D2C brands are almost exclusively digitally native. This means they are experts at segmenting audiences and delivering value to not only those segments but to individuals. And because of how they sell their products, they have the first-party data to do this efficiently.
Since most established brands are not digital natives, digital marketing is usually only a small part of your overall marketing strategy. In this scenario, marketers have likely inherited someone else’s playbook for how to spend your digital marketing budget and how you market your brand online. To be competitive in the D2C space, it’s imperative to get your digital marketing right. In today’s market, however, if you can be successful in your digital marketing, you will find more success in your marketing efforts across other channels.
So how do you ensure the success of your digital marketing?
First, you must deliver value to your consumers where they are in a complex web of digital platforms. Study what platforms they engage on, where they spend their time, what content they share, and where they spend their money. Which social platforms are best suited to your consumers? How will social selling work for your brand? What can you leverage from your current ecommerce strategy? Once you can answer questions like these, then test the waters and try out new avenues for your digital campaigns.
As a mature brand looking to move into the D2C arena, there are several tools already at your disposal if you can realign your marketing strategies, teams, and campaigns around a digital-first mindset. Based on your brand’s longevity and size, your single greatest advantage is scale.
Consider this: a young but successful D2C brand likely does not have a large marketing budget. They achieve their success not with how much they spend but by spending differently than a mature brand. With just a $50K budget, they focus on influencer and social marketing while hypertargeting campaigns and events to a small, core group of consumers and individuals. Now think about your own brand’s marketing budget, which could feasibly be 100 times larger.
If you follow the D2C strategy—leading with purpose, being nimble, and leveraging partnerships all with a digital first mindset—the possibilities for success at that scale are endless.
About Peter Beck
As SVP, Brand Experience, Pete partners with world-class companies to design and implement enriching brand experiences. 25+ years of experience leading comprehensive, multi-channel engagements, Pete provides a compelling vision that drives innovation while delivering desired brand and financial results. His transparent & energetic leadership style emotionally connects, inspiring creation through close partnership in delivering amazing brand experiences.