D2C as a business model has always been around. We’ve seen it from the street sellers who sold door-to-door, knowing us by name and preferences. In current times, D2C refers to brands selling directly to consumers rather of the more traditional approach of selling through retailers.
The D2C business model no longer only represents the value proposition for brands, but now also encompasses the tactics that they have creatively employed to grow their market share (while tailoring to each individual market’s preferences). These tactics are lessons that all brands can learn and apply to their business model.
Amplifying Social Media Presence
28% of internet users globally discover brands/products via ads on social and another 43% research products via social networks. This means that social media platforms like Facebook, Instagram, Pinterest, LINE, Tiktok, Xiaohongshu (RED) or Wechat are the first touchpoints with the consumer (instead of a Google search). Therefore, its key that brands apply learnings from D2C brands to their overall strategies.
One example of this is Nike, which amplified its 165 million social media followers to grow its D2C commerce revenue, accounting for 33.1% of its total revenue in 2020. Other well established brands have also jumped on the bandwagon to utilise social media hashtags or encourage consumers to post their reviews of their products. L’Oreal utilised TikTok with the hashtag #LetsFaceIt challenge to destigmatise mask wearing and garnered nearly 17 billion video views, becoming one of TikTok’s best performing campaigns of 2020.
Dynamic Online Assets
D2C brands need to generate a greater variety of marketing content and improve the content seen on their e-commerce website. This means creating a marketing content ecosystem that fits different social media platforms, including repurposing content for each platform and market. D2C brands must also ensure they product top-notch product photography to entice consumers to purchase.
Australian D2C mattress brand Koala (which launched in 2015 and hit $13M in sales in their first 12 months) has created a variety of engaging imagery to go along with its D2C e-commerce website, such as unboxing videos, Facebook ads with clickable headlines like “Man buys Koala mattress just to get their ads out of his f—king newsfeed” and several other unconventional videos like “Can your mattress do this? – Zero disturbance test” that garnered more than 1.5M views. Its marketing content is a mix of imagery that features the product features, as well as unique and amusing content intended to grow its social media following.
One of the benefits of D2C brands having full control of their content is that it’s easier to manage via an agile content development workflow and robust content management system. It also makes it easier to understand the preferences of the consumers interacting with the marketing content and to tailor future marketing campaigns for them.
Focus on Physical Packaging
A huge part of the consumer experience is when they finally receive the much awaited package in their mailbox. Many D2C brands design packaging that creates a memorable unveiling experience for the consumer. This provides an additional opportunity for brand followers to share on social media platforms. Some brands have further reinforced this behaviour by providing additional prizes for consumers who share their photos of the product and tag the brand in their social media posts.
One example is skincare and makeup brand Glossier, which started as an online beauty blog and has grown into a $1 billion brand in just a few years solely through online channels and viral content that’s built up an engaged online following. Its physical packaging is minimalist, complements each other when placed side-by-side, and is packed in pink bubble wrap, making very social media-friendly content. This allows Glossier another channel to gather consumer feedback easily and engage directly.
According to psychologist George Miller’s research in 1950s, the optimal number of choices one can process at a single time is seven (plus or minus two). As consumers, we love personalisation and options, but too many choices often slows the purchasing journey down. Quizzes to create personalization without overwhelming the consumer is one method D2C brands have applied to avoid the paralysis of too much choice.
D2C skincare brands like Yours have simplified the ordering process by giving consumers a personalized quiz on things like skin type, lifestyle, environment for the consumer’s skin concerns, then recommends a formula tailored specifically for users’ skin concerns. The consumer is happy that they get a tailored skincare product instead of having to search through multiple skincare brands with the most suitable ingredients for their skin.
One example of a B2C applying this to D2C concept is Mondelez, which launched oreo.com, where consumers can personalise Oreos’ colours, flavour or even add an image/text on it. The website also includes recipes and ideas on how to incorporate Oreos into desserts and collectibles. The personalisation engages consumers and provides unique content for consumers to post on social media.
Subscription-based D2C brands like Perk Coffee or Hook Coffee are good examples of simplifying the purchase process for busy multi-taskers. Consumers can choose the type of coffee they like and ensure the beans are ground to fit the way that they drink their coffee. If they struggle with choosing, they can request to receive a new flavour with each delivery and choose their delivery schedule based on their consumption.
The subscription model has also gained traction for learning-based D2C brands. KiwiCo and Little Passports (with similar concepts in Asia like Big Book Box in India, or Atom and the Dot in Malaysia) have won over the busy parent who may not have the time or expertise to curate age-relevant themed activities for their kids. These subscription boxes support busy parents while providing opportunities to bond over the shared activity.
Amplifying Brand Purpose
For many D2C brands, the brand purpose and mission are the most important part of their strategy. This has been especially true for menstrual care products like Diva and Freedom cups, which have become synonymous with the goal of improving women’s menstrual experience. The mission to find a more comfortable and environmentally-friendly option for women to use has led to better awareness and an increased and committed worldwide brand following.
Several D2C skincare brands have also put social responsibility at the forefront of their messaging. Krave connects with consumers about the importance of simplicity in skincare, and Rooki Beauty has developed products that are clean and use superfoods. By focusing on brand mission and purpose, D2C brands have to work much harder than most B2C brands to not only win sales and market share, but also to promote and educate the market on their unique brand missions.
Enhanced In-Store Experiences
In the recent years, fully online brands have moved toward the use of physical space. Iuiga (which started as a purely online store in 2017) has opened shops so consumers can see key products and purchase certain product in store. These in-store experiences aren’t meant to compete with a D2C’s online focus, but rather enhance the brand in the mind of the consumer.
Winners in the B2C to D2C conversion race have also utilised the retail space to enhance the interaction that they have with consumers in other areas. Nike debuted in “Nike Rise” in Guangzhou China where visitors are able to use their Nike app while in store to sign up for local soccer matches and running clubs.
There is a lot that traditional brands can learn from the D2C trendsetters of the world today. D2C brands have used their deep understanding of their consumers’ needs to enhance their buying experience. This is not an easy feat as it takes place in the overcrowded noise of the online marketplace. But successful D2Cs have worked hard to hook their consumers, developing a level of loyalty often unmatched by traditional brands.
About Grace Chen
Grace brings 10+ years consulting experience in consumer marketing, IT and operations management. Grace has led global and regional projects across CPG, Health and Retail industries in APAC, AMERS and Europe. Prince2 Practitioner certified, Prosci Change management and Lean Six Sigma trained, Grace has successfully implemented various continuous improvement initiatives. In her free time, she enjoys trying new local delicacies and finding new brands that bring a twist to products we see every day.