Creating meaningful relationships in Marketing is more important than ever as it increases the chances of customer loyalty, Adimo delve into why this is important...
The dominance of gigantic sales platforms has only grown more pronounced as eCommerce took a massive bite out of the retail landscape last year. With shoppers gravitating to online stores, we’ve seen companies that were dominating their marketplaces grow stronger. Alibaba reported 45% growth in revenue year on year for 2020, with Amazon earning 38% more sales revenue, and even those retailers who are famous for big box stores like Wal-Mart and Costco reported revenue growth during the pandemic.
But what’s good news for massive retailers and sales platforms is often bad news for brands. Becoming dependent on Amazon or another mega-platform for the majority of your sales leaves your business with a host of vulnerabilities. They will see all of your sales data, and if they sniff profit, they’ll be quick to cannibalize your business with an own-brand offering, pushing your messaging and your product to the back of the shelf, or even refusing to sell it. If you become entirely dependent on them, you’ll be limiting or relinquishing your power to control prices, promotions, and other fundamental aspects of your interactions and relationships with consumers. It’s time to look for a way out of the Amazon trap.
While the shift to eCommerce has been a massive boon to Amazon and its ilk, it has also opened a number of doors for brands looking to level the playing field. Consumers looking for new products frequently turn to the web, with studies showing that 87% of shoppers start their searches for new products online. Once they’re online, 59% of respondents reported that they preferred to research directly from a manufacturer’s website, while 55% said they preferred to make their purchases in the same fashion. The assumption that shoppers gravitate to Amazon or other giant retail websites may be mistaken.
A host of D2C success stories seem to confirm the potential of the approach. Beauty brand Glossier is often touted as the poster-child for the movement. The innovative firm has used canny social media marketing (it boasts well over a million followers on Instagram), its own content creating machine, splashy product launches, and an image as a lovable underdog taking on the exploitative giants of the cosmetics industry to gain a devoted following. President and COO Harry Davis says he “became obsessed with how to use digital for creative purposes to engage people at scale and ultimately change what it means to be a customer.”
The sea-change in relationships between consumers and brands is at the heart of the D2C revolution. Glossier bases its approach on what customers are craving, and designs its products and campaigns with a view to delivering satisfaction. In Davis’ words: “Customer is at the heart of product development, customer is at the heart of strategy and customer is at the heart of the sale.” Glossier is based on the principle that making customers happy should be at the core of everything a brand does, ranging from product design to social media presence. As Davis says “When your friend says, ‘you have to try this thing’, you listen. You cannot buy that much goodwill with all the advertising and the best creatives in the world.”
Shifting to a D2C sales model has three main advantages: it helps you build close, personal relationships with your customers; it gives you complete control over the data that allows you to find out precisely who your customers are; and it lets you shape every aspect of the shopping experience, to maximize engagement and convenience. Research has shown that today’s shoppers are looking for what customer experience experts at Walker call the “new big three: personalization, ease, and speed.”
In fact, experts are predicting that customer experience will soon replace price and product quality as the biggest factor differentiating your brand from competitors. And D2C brands have been at the forefront of this wave, with beauty, FMCG, fashion, and pet-care brands reaching the public via innovative social media campaigns, and providing convenient, often subscription based services, that fit seamlessly into the lives of millions around the globe.
One such success story is the UK sparkling water start-up Ugly Drinks, which has captured the hearts of their trans-Atlantic audience with an approach based on collaboration with consumers. Orla Weir, the company’s head of DTC and Brand, credits an excellent supply chain and flexible design partners with the brand’s ability to quickly and continually launch limited edition campaigns based on customer creations and votes for wild new flavours like marshmallow, candy cane, and pumpkin spice.
As Weir states, campaigns based on customer desires have given Ugly “ this hold in the US to be the ‘fun flavoured sparkling water,’ with a community of people that can engage with it and make decisions with the brand. And that’s maybe become our US differentiator.” The emphasis on customer engagement and input in product development ensures that new offerings will be well-received, and builds a vibrant social media community based around your products. Glossier, Ugly Drinks, and many other D2C success stories have been leveraging this strategy for years. It’s time for more brands to get involved!
Adopting a D2C strategy also makes it easier for your brand to promote the social and environmental causes that you care deeply about. Men’s grooming company Harry’s has earned plaudits for its #8foramate campaign that promotes and raises funds for CALM, a charity that promotes positive mental health and connection with others. Meal kit company Blue Apron has also built goodwill by focusing on sustainability, designing packaging that rates better with environmental experts than traditional grocery offerings.
For brands looking to survive and thrive as eCommerce’s reign begins, the D2C model offers a host of benefits. It limits your dependence on platforms that don’t have your brand’s best interests at heart. It allows you full control over the experience your customers have when interacting with your brand. And it allows you to shape messaging and content to build genuine connections with consumers. If your brand needs a helping hand as you develop a D2C strategy, get in touch with Adimo today!