Gone are the days where big-name marketplaces and department stores dominate the consumer market. The direct-to-consumer (DTC) strategy has exploded in popularity, attracting startups and established CPG brands alike.
It’s clear to see why, as with lower costs, full marketing control, and the ability to form more authentic relationships with customers, selling DTC is full of high-value possibilities.
What is a Direct-to-Consumer Brand?
A direct-to-consumer (DTC) brand sells their product straight to their end-customer, bypassing the traditional utilization of third-party retailers or wholesalers.
They operate almost exclusively online, leveraging digital channels to independently build their brand and attract customers. Casper and Warby Parker are perfect examples of popular DTC brands.
Whether you’re a startup looking to go full DTC or a curious CPG company wondering how it’s done, here are some steps you can take to create a successful DTC brand.
1. Choose the Right Product
There’s never been a better time to start an ecommerce business, and everybody knows it. Chances are, your new business will be diving into a saturated market, competing with big and small brands alike.
Fortunately, if you’re passionate about your product and perform in-depth market research, your product can stand out to your target audience.
Know your product inside and out. What customer pain points does it address? What is your USP? Why should a customer pick your product over your competitor’s? The answers to these questions will determine where your product sits in the current market, as well as your target audience, and how best to reach them.
2. Create an In-Depth Finance Plan
Because ecommerce is deemed cost-effective, it’s common for startups to underestimate outgoing costs. From the smaller fee of your domain name to your larger marketing investment, all expenditures should be planned and documented to reduce financial risk.
Many ecommerce businesses hire accountants just for that extra bit of financial guidance and security. They can offer you invaluable strategic financial advice and manage those pesky legal requirements that we always forget (like renewing our business insurance or submitting our VAT return online). It’s definitely a worthwhile investment for those who can afford it.
3. Build a Website
Your website is the cornerstone of your brand and a prerequisite for any successful ecommerce business. A low-quality website will skyrocket your bounce rate and potentially ruin your brand’s reputation (48% of people have ditched a company’s website and purchased elsewhere due to poor site navigation).
Take time to create a high-quality website that is fully operational across multiple devices with a mobile-first approach to optimization. It should also have user-friendly features and smooth, flexible payment capabilities.
Luckily, you don’t need to be a coding genius to build the perfect website. There are loads of ecommerce website building platforms that simplify the process considerably. Always consider the specific needs of your business before committing to a platform and do your research on monolith vs microservices architecture to make sure that your platform aligns with your scalability, integration, and future-proofing goals.
4. Optimize Your Customer’s Journey
Just as physical stores optimize their floor plan and product placement for maximum engagement and sales, your online shopping experience needs to do the same. However, online customers aren’t all entering through the same door, and many switch between devices or channels before making a purchase.
It’s your job to map out your customer’s buying journey and optimize it to nurture them smoothly down the sales funnel. Here’s a visual representation of what your map might look like—take note of the amount of digital touchpoints there are compared to physical ones.
Creating an intuitive, omnichannel experience by addressing pain points, optimizing features, scaling screen sizes, and eliminating data silos will maximize customer satisfaction and the success of your DTC strategy.
5. Fine-Tune Your Marketing Strategy
As a DTC brand, you won’t have access to a third-party retailer’s ready-made audience. The sobering reality is that you have to start from scratch and source every customer yourself. While this is enough to put some people off, it does come with the glorious benefit of having complete control over your marketing strategy.
You have full agency over your branding and advertising, from your product’s packaging and pricing to the audience you target and the channels you use. Not only that, but you have access to every bit of your customer data, which is invaluable when it comes to refining your marketing strategy.
So, using your market research data, create a digital marketing strategy that appeals specifically to your target audience.
6. Prioritize Customer Service
You’re also completely responsible for delivering customer service. There’s no hiding behind a marketplace if a customer has been charged twice or their delivery hasn’t arrived. You have to consistently meet your customers’ high expectations and provide a swift omnichannel customer service experience at every touchpoint in your buyer’s journey.
With a help-desk, live chat, and online self-service options supported by a dedicated customer service team and CRM software, you can confidently provide amazing service to your customers.
What’s even better is that handling it all yourself is in your favor. By aligning your brand with excellent customer service, you humanize your company and build more authentic relationships with buyers. And with 93% of customers more likely to purchase repeatedly if they experience excellent customer service, investment is vital for securing brand loyalty.
7. Focus on Building Brand Loyalty
DTC brands are hyper-focused on building brand loyalty. Loyal customers are more likely to buy high-value items, make repeat purchases, and engage on social media, making them considerably more valuable than the new customer who buys once before disappearing back to Amazon.
Selling DTC favorably positions you to build a tight-knit community of high-value customers, thanks to the wide range of customer retention strategies available. Nurture new buyers into loyal customers through personalization, pre order marketing, subscription services, loyalty schemes, discounts, and, of course, impeccable customer service.
Now You Can Launch a DTC Brand
Thanks to its lower-barrier entry, increased control, and customer-centricity, DTC has become a standard way for startups to enter the market. Selling DTC is perfect for brands who are digitally-savvy and committed to delivering exceptional customer service.
However, you don’t have to be exclusively DTC. Plenty of CPG companies are slowly branching into DTC territory while continuing to reap the benefits of third-party retailers. Regardless of whether you’re going digitally-native or just dipping your toe in, hopefully this article has equipped you with the foundational knowledge you need to launch a DTC brand.