5 Lessons Retailers Can Learn from Direct-To-Consumer Brands

Posted on July 7, 2020 by Carm McCormick
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5 Lessons Retailers Can Learn from Direct-To-Consumer Brands

Posted on July 7, 2020 by Carm McCormick
 

From customer service and in-store experience to engagement and seamless online-to-offline experience, DTC brands focus on customers first — and their customers know it.

Not too long ago, direct-to-consumer brands were the kings of commerce. They broke the traditional distribution model in favor of selling directly to the end user while conventional retailers looked on with envy. They could launch a Shopify or Magento store overnight and tap into Facebook audiences to earn quick profits. And they did so with minimal overhead and major accolades from their customers who enjoyed a refreshing way to discover and buy new products.

Companies like Dollar Shave Club, Casper, and Soylent began by bypassing the in-store and opted for DTC instead, keeping costs low and branding high. The result was (and remains) a better, faster, and cheaper way of doing business without sacrifice while connecting directly with the buyers that support them.

Small and large retailers can learn a lot from one another, but both can learn valuable lessons from direct-to-consumer brands and what it means to put both customers and their in-store experiences first.

Focus on the best product vs. the most products

Bombas, Allbirds, Harry’s, Casper — many of the most prestigious direct-to-consumer brands started with just one core product that skyrocketed them into household names.

Historically, retailers were limited by shelf and storage space, which ultimately determine what they could sell and how much of it. But as eCommerce evolved, this issue shifted because they didn’t have to think about conserving shelf space. This opened up new opportunities for retailers, who could start turning to niche products you wouldn’t typically find in a brick and mortar store.

Fast forward to today, where DTC brands are bringing simplicity back to shopping. Rather than following in the everything-goes footsteps of modern retailers, they’re dialing back to focus on a handful of high-quality products (or in some cases, just one) that best represent their brand.

For example, Casper started their road to success with what they touted as the “perfect bed”. Harry’s launched with just one type of razor for men and women alike, their response to a product that had become unnecessarily complicated over the years. Even Allbirds cemented their brand by selling one type of shoe — a stark contrast to any physical or online shoe store that serves up hundreds of pairs of shoes for every age.

But now, these companies are the go-to’s for the type of product they sell. When you’re on the hunt for the perfect mattress, Casper springs to mind. When you want a great shoe and don’t want to try on dozens of pairs, Allbirds has you covered. These brands don’t have the largest variety, but they’re becoming the best at what they do.

The takeaway: you don’t have to invest in lots of inventory to find out what sells and what doesn’t. Limiting your selection can help you pivot quickly as markets shift and focus on delivering quality over quantity to your shoppers.

Change and innovate for the better

Many direct-to-consumer brands didn’t find success through products alone. Sure, everyone needs a bed and a good shave, but because these are often viewed as commodities, there’s already a heap of competition and only by doing something different could the brands earn market share.

Brands like Casper, for example, chose to brand themselves as anything but a mattress company, while Harry’s leaned on transparency and substantially lower pricing to turn heads. Both strategies worked well for these two companies.

The takeaway: Differentiation and disruption are more than buzzwords. They can be effective strategies, but only if they are designed to do more than get attention. Ideally, daring to be different should add value to your brand and the customer alike, helping them see why you’re truly different while maintaining authenticity with your audience.

Offer something exclusive

One of the most attractive things about DTC brands is that you can’t find most of them in-stores (although many are starting to explore the physical retail world). There’s something exclusive about brands that aren’t trying to be everywhere or be everything to everyone. And often, when you can find them in stores, it’s in limited quantity or through collaboration with other brands (like a DTC natural makeup brand collaborating with a wellness boutique on a limited-time range of products). 

The takeaway: Brick and mortar retailers can offer their own sense of exclusivity in a myriad of ways. For example, you might host in-store events or carry certain products that aren’t available through online channels. This could be enough to get busy customers through your door while giving them something unique to look forward to.

Optimize your brand (and store) for social media

Some of the most successful DTC brands have built their early success on social media through the use of influencers and paid advertising. Their brands weren’t exactly born on social media, but because they began as an online-only retailer, they did and still do rely heavily on their social media presence to continue winning customers.

To do this well, DTC brands focus on creating content that’s engaging and shareworthy. They create their ads and designs in a social-first mindset, and brick and mortar stores can do the same in their retail design. For example, adding photo booths, mirrors with hashtags, or even picture walls can encourage in-store photos and social sharing.

The takeaway: It’s important to build a brand that’s shareable in every sense of the word. When done correctly, your in-store shoppers can become your biggest social media advocates, and they can do so organically when your store offers something worth sharing.

Embody transparency and empathy

One of the most prominent themes among DTC brands is their commitment to ethics, transparency, and values. Many DTC companies are also philanthropic in nature, and they’re not shy about sharing how they give back to others.

Third Love is an excellent example of transparency done right. They use models of all ages, races, and sizes, ensuring that all their customers feel adequately represented. Honest Company focuses on the purity of their products, offering full transparency into their ingredients. And while it helped that the company’s founder is also a famous Hollywood A-lister, users still respect the company for their commitment to safer beauty and care.

The takeaway: Customers will respect companies who promote honesty and transparency because it emphasizes people over profits.

Always add value

Arguably, the biggest factor that makes direct-to-consumer brands so successful is simply the fact that they personalize and add meaning to every interaction. Even without a storefront, DTC brands think about design and branding just as much as physical retailers and prioritize these elements alongside service and experience.

This is largely because there are no “middle men” to influence the process. Customers get the most authentic experience with the company and brands maintain control over their interactions with customers.

By following the core tenets of the DTC model — long-term profitability over short-term sales, value over boldness, and personalization over cookie-cutter messaging — retailers can win and retain more customers just like their direct to consumer competitors do. 

ACHIEVE THE SUCCESS OF DTC BRANDS WITH YOUR NEXT RETAIL STORE LOCATION

Making the most of your next retail location starts with understanding what inspires your customers. Through experience, research, and a deep comprehension of what it takes to grow a retail business, we take your ideas and turn them into actionable plans that help you grow, earning the foot traffic and sales you brand merits. Learn more about how we can help you achieve that (and more) by contacting our expert team today.