The digitally native brands disrupting the consumer packaged goods industry remain a step ahead of their more traditional competitors and continue to rewrite the rules of marketing. In recent years, direct-to-consumer companies have established themselves as formidable competitors to household brands across every industry imaginable, leaving legacy brands under pressure to adapt.
The recent pandemic, however, has thrown a wrench in direct-to-consumer brands’ rapid growth. Digital natives might not be experiencing the same brick-and-mortar closures that traditional retailers face, but they are encountering new challenges, as well.. A drop in consumer spending, an increase in unemployment and an overall more competitive digital landscape are just some of the obstacles brands need to overcome in order to stay in business.
Given the volatility of today’s world, now is a good reminder for direct-to-consumer brands to double down on what they do best. What makes these brands so successful is their ability to build one-to-one, authentic relationships with their customers and foster communities online. Any brand that hopes to retain their customers, manage through the current crisis and ensure long-term growth should take a page out of the direct-to-consumer marketing playbook and prioritize connections—now.
Direct-to-consumer brands are going straight to the source
Where better to foster connection than going right to where people spend their time? Social platforms like Facebook, Twitter and Instagram enable two-way conversations between brands and people, providing a level of intimacy that other forms of marketing can never achieve.
In the wake of COVID-19 and the rising social justice movements following George Floyd’s and Breonna Taylor’s murders, direct brands are leveraging those connections to listen, learn and better understand how to support their customers and authentically give back to their communities.
At the start of the pandemic, Rothy’s used its social platforms to share how they planned to support COVID-19 relief efforts, from making and donating cloth masks to establishing a direct relief fund. But along the way, people took to social to highlight a flaw with Rothy’s original plan to donate masks to first responders. Instead of ignoring or trying to resolve this problem internally, Rothy’s listened, acknowledged their shortcomings and incorporated customer feedback into their updated donation plan.
Customer feedback on social can also help brands formulate their response to current events. After the murder of George Floyd, a number of organizations posted statements of solidarity across their social platforms. But people demanded more—specifically, they wanted to see brands put words into action and donate to causes supporting the Black Lives Matter movement. Beauty brand Glossier delivered, posting their support for the Black community, making a $500,000 donation to organizations combating racial injustices and establishing a grant initiative for Black-owned beauty businesses. Glossier’s approach was applauded by their community and shows how brands can appropriately respond to racial injustices when they take the time to listen to and incorporate feedback from their customers.
Scaling one-to-one relationships for the masses
Nurturing individual connections is key for a long-lasting relationship, but identifying how to scale those connections and effectively grow as a business remains a challenge for many brands.
With in-person transactions shelved for now, DTC brands are more prepared than most but still need to find ways to enhance customer experiences. Bedding and home brand Parachute was forced to accelerate the implementation of their virtual styling services. While social media helps Parachute stay connected to all of their followers, their one-on-one styling services also ensure the brand maintains a personal connection to individual customers.
With so many of us cocooning at home for the past several months, they’ve tapped into the inner (if slightly forced) homebody in all of us, livening spirits and answering the call for a more restorative personal space. Since the beginning of the pandemic, Parachute’s online service has drawn more than 100 customers and generated a 50% conversion rate. I recently revamped my room with Parachute bedding and, fun fact: give your bed a spritz or two of their Rest Linen Mist before calling it a day you’ll be dreaming in no time!
As industries mature and manage a constantly-changing global environment, reaching new customers on the same social platforms can be daunting. To maintain scalability, direct-to-consumer brands also need to do more than rely on word-of-mouth marketing and grassroots advocacy.
While some brands find themselves investing in TV advertising, others like Hubble are also experimenting with paid ads to amplify their reach to connect with new customers in Canada and the UK. The contact lens company explored multiple platforms before settling on Pinterest for several reasons. At a recent Forrester Consumer Marketing Forum, I spoke with Dan Rosen, Hubble’s creative director, about how Hubble uses Pinterest to better understand regional differences as they expand into new geographical markets. Not only does Pinterest, as a platform for ideas and inspiration, align with Hubble’s own brand principles, it also attracted a specific community Hubble knew would connect with the brand’s colorful and creative designs.
Relationships today generate revenue tomorrow
Historically, brands that controlled the supply chain and had massive advertising budgets enjoyed the lion’s share of the market. But as people’s preferences evolve, legacy brands are discovering they can no longer just buy their customers with traditional marketing efforts.
According to our own Sprout data, 64% of consumers want brands to connect with their customers. To get to know their customers better, direct-to-consumer brands are focused on building connections with people who align with their brand’s mission and values. And these relationships have real financial impact. When people feel connected to a brand, 57% will increase their spending with that brand and 76% will buy from that brand over a competitor.
Consider how one direct brand’s strong relationships mobilized its customers to give back to the community. Trinity Mouzon Wofford, co-founder and CEO of health and beauty brand Golde, shared with her followers that she would be donating 100% of her business’ profits to the NAACP. In less than 72 hours, Wofford announced the Golde community raised over $10,000 for the NAACP’s Legal Defense Fund. Wofford’s actions not only inspired her customers, but also her friends who also own small businesses, with several brands reaching out to Wofford to let her know they would follow in Golde’s footsteps.
The donation window only lasted for several days, but the relationships Golde cultivated with its customers, both new and old, are likely to last.. Amidst a clarion call for greater support and patronage of Black-owned businesses, moves like this not only create connections but align communities around shared beliefs and offer proactive ways to build a future customer base.
The future of retail starts with connections that last
In the throes of a pandemic and evolving civic landscape the most successful direct-to-consumer brands aren’t always creating the most innovative or never-before-seen new products or services. Rather, they’ve learned how to engage people’s hearts and heads by investing in human relationships right from the start. It’s this relentless and authentic emphasis on connection that’s empowered direct brands to upend the status quo in the consumer goods market.
To learn from and even compete with these direct brands, companies need to invest in resources that yield better connection and take on the responsibility of getting to know their customers on a personal level. Adapt your brand message to reflect the current times; engage with your customers directly on the platforms they frequent most; understand their likes and dislikes and craft content that sparks an emotional response to strengthen the individual relationship. Because if you can’t confidently say you know how to connect with your customers, there’s a good chance they will shift their Likes and loyalties to another brand that does.