Embracing Direct To Consumer
Here at Trend, we’ve been fortunate to work with amazing CPG brands like Health Warrior, Four Sigmatic and Kettle & Fire Bone Broth. These are some of the most innovative and fastest growing CPG brands out there who are also doing direct to consumer the right way.
Want to know a major factor in their success?
They’ve embraced a Direct to Consumer (D2C) approach that allows them to directly communicate with potential customers and foster a stronger relationship - not to mention open up a new revenue channel that cuts out the middleman.
Why DTC Instead of Traditional?
Here’s the simple truth:
In today’s world, brands need to find new ways to stand out and connect with potential customers. Simply having your product sitting on a store shelf gathering dust as it competes for attention just doesn’t cut it.
That’s where direct to consumer can change the game for you and your brand.
Instead of waiting for consumers to discover you, you go to them. Even better, since you’re interacting directly with consumers, you have total control of ensuring they have a seamless and positive experience. This is essential, because 89% of companies now compete primarily on the basis of customer experience. In a traditional distribution channel, you’re at the mercy of a third party retailer to display, advocate and sell your product. Not to mention, they have some of your competitors on the same shelf!
By doing the direct to consumer route, you’re able to ensure a personalized and attentive the experience. This translates to increasing the chance that you convert a consumer into a customer, and, even more importantly, an advocate.
How you communicate in an authentic way is more of an art than a science. Creating a connection with your audience will pay high dividends in the long run and provide you with valuable insights about your branding and even product.
Take Kettle & Fire for instance. There’s more than one bone broth company out there, but what has made them one of the most successful is their meticulous attention to brand building and getting directly in front of their audience.
Once you’re in front of potential customers, direct to consumer has the added advantage of eliminating purchase friction by allowing people to buy immediately on your website and socials. Direct to consumer greatly streamlines the buying experience as consumers save time driving to a store, finding parking, making their way through the crowds, and then waiting in line at the cashier.
Or, even worse: getting someone excited and ready to buy your product only to then throw a bucket of cold water on them when you they show up to a retailer only to be told the specific item they wanted is out of stock or not carried at that location.
And finally, the streamlined approach and efficiency of D2C provides several additional benefits for your brand. Yous save money on overhead like logistics - savings that can be passed on to your customers and make your products more competitive. You can experiment with delivery and have a faster go-to market, since your products aren’t just sitting on a shelf somewhere.
Leading, forward-thinking companies have burst onto the scene and experienced great success in the past few years embracing a DTC approach that has allowed them to create a memorable customer experience and facilitate the ease of purchase. Here’s just a few recognizable names:
Dollar Shave Club
The Honest Co.
All of these companies started their journeys as direct to consumer brands and then, after experiencing quite the home run, have begun to explore the retail side of things.
This typically occurs once they hit a ceiling and can no longer reduce their CAC (Customer Acquisition Cost). However, by having a strong and loyal base by the time these brands open their first physical stores, they can ensure they’re an immediate hit, often starting with a long line on opening day - a line full of people that have interacted and loved the brand from it’s online DTC days.
Because of this, the DTC to retail approach is generally a lot more efficient than the reverse, which is what most legacy brands are now doing, retail first then DTC.
Most of these companies, such as Procter and Gamble or Johnson and Johnson, fear or hesitate to go the DTC route because these new DTC brands understand marketing better than anyone else today and perhaps even more importantly, DTC brands don’t have to eat up margins that distribution brands have to.
They simply can’t compete, because the DTC companies are more flexible and lean - words that you want to apply to your business too.
Here are some of the COGS (Costs of Goods Sold) for DTC companies:
Distribution and Transportation
These costs alone can eat up to 20% of your margins.
Not to mention the steep decline the retail space has had in the past few years. Direct To Consumer is not a fad on the rise - it is the new consumer behavior and it is here to stay. Here’s an example of why:
Again, these signs don’t show any signs of stopping either. Department store sales peaked in 2001 and have since declined 36% despite population and economic growth. Indeed, just this past April, online shopping overtook brick-and-mortar retail for the first time ever.
So, how does a company do D2C right?
D2C is all about going to where people are at. And these days, the people are all online. On Instagram, to be specific. Indeed, some people have gone so far as to call Instagram the new mall.
To keep using the mall analogy, this means it’s essential that your online storefront is welcoming and engaging. Check out Health Warrior or Four Sigmatic’s profiles - they’re full of high-quality content and a lot of activity. The same goes for their tagged pictures.
Of course, it takes a tremendous amount of time, money and effort to constantly generate engaging content, get it in front of millions of people, and then convert them into customers.
Trend allows you to seamlessly execute in all 3 areas from one centralized platform.
Generate Custom Content and Control the User Experience
When a brand sets up a campaign on Trend to support their D2C model, they fill out a detailed brief that tells the influencers everything they need to know, from talking points to mention in the caption to what hashtags to use to what color schemes would work best with a product’s packaging.
Brands are then able to select influencers to work with from our invite-only network of thousands of high-quality content creators.
The result? You quickly receive hundreds of pieces of outstanding UGC that meet your brand’s aesthetic / creative guidelines. You constantly have a fresh stack of creative to deploy across your socials, website and ads. And you did it all for a fraction of the time and cost.
Marketing and Sales Engine
Of course, that’s not the only benefit:
When influencers create content for you, they also share it on their profile. Over time, a standard campaign on Trend will generate millions of impressions for a brand.
If you would like to see how we generated over 1 million impressions for Health Ade Kombucha email firstname.lastname@example.org to have it sent straight to your inbox.
In other words, millions of people are being exposed to and learning about your brand and product!
And it gets better:
People follow influencers because they trust their opinions and recommendations, want to learn about new products, and aspire to have a similar lifestyle. A recommendation from an influencer that someone is following will resonate, feel more personal, and convert better than scrolling across a generic banner ad.
It’s also worth noting that Trend specializes in micro-influencers - accounts under 100k followers that have a more loyal following since there is a more intimate relationship between the creator and followers.
All together, this will directly contribute to the third benefit of using software like Trend for D2C campaigns:
And finally, through the power of D2C, the millions of people who are learning about your brand from trusted accounts that they follow can then proceed to immediately make a purchase.
Even if you have a brick and mortar presence, the vast majority of consumers will still go online to research before making a purchase. One of the first stops will be a brand’s social media - are they active? Is the content high-quality? Likewise, when they see the dozens of people tagging and talking about the brand, legitimacy and trust will be established.