The case for DTC brands
In the past decade, DTC brands have shaken up the rules of traditional retail—and to say DTC is continuing to gain momentum is nothing short of a gross understatement.
Simply put, DTC is here to stay.
The DTC movement, pioneered by brands like Warby Parker, Bonobos and Dollar Shave Club, made $14.3 billion in revenue in 2019, a 33% growth rate over the prior year. Today, there are over 400 DTC brands in operation (and counting!), and categories playing in the field have expanded to every corner, from personal hygiene to prosciutto and footwear to pharmaceuticals.
These DTC darlings have disrupted a lot of the traditional ways retail is done by focusing on brand-forward messaging to capture customers’ hearts and wallets. But DTC isn’t just about selling more—it’s about seriously investing in the development of your brand’s relationship with customers. DTC has become critical for building relationships with your customers.
What’s in it for you?
We think of DTC as a spectrum. Going DTC can offer many benefits to your brand. Goals can range from generating consumer insights that can be used to improve product performance and marketing, to increasing or protecting your share of customer spend in an increasingly brand-first world. Let’s explore some of the benefits:
- Consumer insights: Gathering data and delving into consumer insights can help you engage and sell to your customers more effectively. It can even help improve sales through third-party retailers.
- Brand narrative:The power to shape the content you put out and the way you gather and respond to feedback means you have the power to guide the relationship consumers have with your brand.
- Building relationships and brand loyalty: DTC means your brand is forming a direct relationship with consumers. A positive relationship with your consumers means increased brand affinity and loyalty. This can ultimately lead to the creation of an actual rewards or loyalty program, but the takeaway is the same—a satisfied customer is more likely to be a loyal one.
- Increased and protected share of spend:In a world where consumers increasingly expect and seek out direct connections with brands, going DTC can help your brand grow sales and protect your market share.
Once you’ve defined the right goals for your brand, it’s time to begin defining a strategy on how to get there. In the next post in our series, we’ll dive into the keys to success and principles for growth in DTC.
About the authors
Camilla Whitmore is a senior consultant at PK focusing on retail and loyalty strategy. With a background rich in marketing and public relations, she is inspired by creating connections to drive brand growth for clients. Camilla’s obsession with brand experience and customer engagement is rooted in her work with consumer brands in fashion, lifestyle, tech and fitness over the past dozen years.
Martin Mehalchin is managing director for retail and consumer at PK, the experience engineering firm. He has dedicated his career to working with executives and managers to help them define their strategies and then translate those strategies into results. Among the clients Martin has worked with are Nike, Atlantic Records, Microsoft, Qualcomm, Expedia, Victoria’s Secret, Adidas and DuPont. Martin is a Board member and Chair of the Marketing Committee for the North Cascades Institute.Tags: Contactless, DTC, Retail