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Direct-to-consumer advertising: Why you need different tactics
The UK has always been ahead of the curve when it comes to buying online, but the pandemic has turbocharged this shift in purchasing habits, with two-thirds of UK consumers saying they are now more likely to buy online (compared to pre-March 2020).
This has naturally translated into rapid growth for the D2C / DTC (direct-to-consumer) market – although, in truth, its ascent started long before the pandemic, which has acted as rocket fuel.
Quizzed on why they have become more open to buying direct from brands, over half of consumers (58%) claim that it’s quicker, while ease of search (57%) and cheaper products (32%) were other key reasons stated, as per the research from BBH London. The closing of non-essentials shops, as part of lockdown restrictions, has undoubtedly played its part, too.
For some goods categories, D2C sales are projected to grow by as much as 59% over the next 12 months.
D2C becoming a priority
Sensing an opportunity, brands are more open to the idea of selling their products directly to consumers, missing out the middle people (retailers and wholesalers) and assuming total control over their reputation, marketing and sales tactics.
A survey by ChannelAdvisor and research firm CensusWide of chief marketing officers from UK brands with online stores found the majority expect D2C to drive at least 20% of their sales in the next five years.
Some were even more optimistic, with 16% expecting D2C to account for more than 40% of sales over the period.
Nearly all of the CMOs agreed that their D2C channels have become a higher priority for their brand since the start of the pandemic, with a third (34%) calling it a “significantly high priority”.
They’d be crazy to think otherwise. But it’s not as easy as pointing customers towards their own website. As McKinsey points out, brands are building out their D2C capabilities “with varying degrees of success”.
“Building a D2C business may be easier for some, as companies differ in terms of their history in direct selling, as well as the attractiveness of their brand and category for direct sales,” McKinsey explained.
As some brands are quickly finding out, it’s not enough to simply move into the D2C space – those benefits of convenience, ease of use and customisation have to be realised for the customer.
Giving customers what they want
For legacy brands, on paper at least, D2C seems to play into their strengths. The huge amounts of customer data they are generating provides a platform to deliver on the expectations, values and desired experiences of modern consumers.
But McKinsey suggests they are being held back by a series of factors including a lack of prioritisation of D2C by top leadership and “little or no incentive to focus on consumer-centricity and journey thinking”.
If you’re not putting the customer first and delivering a much more personalised brand experience, there’s an argument that you’re not doing D2C at all.
As legacy brands attempt to pivot in the direction of D2C, those agile, online-only businesses are already enjoying success in the space.
In the beauty category, brands such as Glossier and Harry’s have shaken up the market by simply asking their customers what they wanted instead of telling them what they wanted.
Meanwhile, in the food category, brands like Hello Fresh and Gousto have redefined the ‘weekly shop’. Rather than having to come up with meal ideas and then go shopping for all the ingredients, their customers simply have to choose from a menu and everything is delivered to their door, saving them time, money and – perhaps most importantly – mental space.
What these brands all have in common is that they offer additional value on top of the standard retail experience. And once customers have had a taste of it, the data shows that they will keep coming back for more.
The UK subscription model is forecast to be valued at £1 billion by the end of 2022 – almost double what it was worth (£583m) only five years ago. But with only a quarter (27%) of UK consumers currently signed up to a subscription service, there’s clearly plenty of space left in the sector for further growth.
How to advertise D2C brands
As more and more brands look to capture market share in the D2C space, the winners will be those who ‘go beyond the transaction’ and drive recurring long-term relationships with customers.
Ultimately, an e-commerce channel relies on a core set of customers. To do that, brands need to find a way to attract and connect with them on a social and emotional level – something that’s very difficult to do with standard online advertising.
So, how do you make that initial pitch to potential customers online? The answer is you need more space – more room to sell the features and benefits of your products and services. More room to tell your story and get the buy-in needed to attract and retain loyal subscribers. Enter a long-form format that allows you to do just that – native article.
Whether you call it advertorial, branded content or content marketing doesn’t really matter – what does is the credibility of the editorial environment, the quality of content and how the page is structured. Get these elements right and you’ll set your newly acquired audience on the path to conversion.
