In another webinar, carried out within the Increase Awareness Academy lecture series, Google presented the results of the current analysis of marketers’ behavior in the DirectToConsumer (DTC) category and presented a set of best practices that can be implemented for marketers in this and other categories.
Unfortunately, the whole study is based on the American market, but the conclusions and best practices are still universal, because they often also refer to trends and behaviors present on the Polish market. The first of these trends is the development of the scale of online shopping, which has been further exacerbated by the covid situation. The second is the expectation of customers to engage their brands in broadly understood social issues (from veganism and not testing their products on animals to worldview issues).
For the purposes of this study it was assumed that DTC is defined as
– Those selling products directly to the user, usually online
– Those selling their own products -they are not marketplaces
– They rely on data obtained about users as 1st party in their actions
The importance of this market segment is clearly demonstrated by the data from the American market, where young brands are able to compete effectively with the older, seemingly heavily entrenched market leaders. What’s interesting is that DTC brands are able to effectively operate in such a seemingly well-established offline segment as mattresses. In this case, the element that enabled such a strong presence is the 100 day free return period.
The diagnosed reasons for the success of these brands have been divided into 4 main groups.
- Believing in what and buy – DTC brands are 36 times more frequently searched in combination with phrases touching on social issues. Consumers increasingly make purchasing decisions based not only on price as such, but also on the values that the brand or product features (Eco, vegan, etc.) represent.
In this case, the key is the brand’s consistency in building its image at every stage of the purchasing process.
Within the selected categories, the key values for consumers are:
2. Luxury in simplicity – this is the trend towards a return to simplicity. DTC brands often prioritize quality over quantity and focus on selling high-margin products.
However, this must be combined with the ability to show your product at the best time. In the case of activities such as Paid Search, the key phrases here would be generic phrases like
“best” + product.
Interestingly, the potential of these phrases systematically increases in relation to the “budget” phrases.
3. Part of something is an element inseparably connected with building relations between the brand and the consumer. This relationship is often strengthened through social media and so users look for DTC brand SM profiles 600 times more often than traditional ones. This translates into the success of these brands’ partnership programs – consumers more often recommend brands with which they can identify themselves, which can be additionally motivated by the benefits for existing customers. We can speak of a transfer of benefits between the brand and the consumer and vice versa.
Personally, I think that access to first part data is an element that cannot be overestimated nowadays. But even such a mundane element as constant consumer feedback is invaluable when talking about product development.
4. Feeling Valued – This is an element closely related to personalization.
This element is important not only in the context of the product as such, but again during the whole user path. At the beginning it can be a personalization of the brand page, then the development of the command engine, which increases e.g. the size of the shopping cart, then the product development.
How do all these actions translate into the results of individual brands?
At the level of brand awareness and interest you can clearly see an increase in the number of queries from DTC brands vs. traditional brands:
The graph compares the upward (or downward) trend in the number of searches for specific brands.
Such trends translate into the final effectiveness of actions, e.g. in the Paid Search channel – where a significant percentage of sales is generated based on brand phrases. Each decrease in the number of their searches is connected with a decrease in campaign effectiveness. But does it translate into sales?
On the basis of the data presented by Google we can risk a claim that it does. The number of people buying DTC brands at least once a year increased by more than 50% (2020 vs 2017) which, combined with the described trends, allows us to forecast the further development of this trend.
Will this make DTC brands completely supplant other brands? Definitely not. However, it is possible to effectively implement the activities carried out by DTC to its brand in order to compete in the new reality.
