Reinventing the Direct-to-Consumer Business Model


June 26, 2021
6 MIN READ
Vinculum
Written by:
Vinculum
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At the moment, we are all going through tough times. The shock of the COVID-19 outbreak has severely impacted retailers and direct-to-consumer (DTC) brands. However, during Coronavirus, our industry’s leaders are focusing on survival, recovery, and future growth and implementing proactive DTC strategies to support their survival.

Coronavirus has exposed many DTC companies’ financial problems and supply chain problems, even though the demand for some of their products has increased. As a result, Casper and Away have laid off or furloughed workers as a means of preserving cash, Everlane offered discounts to move inventory, and others have suffered from the crisis since the year started.

Despite these difficulties, there are still plenty of reasons to be optimistic, as well as lots of options for ensuring DTC survival in COVID-19. It’s not about reinventing DTC models in the face of COVID-19; instead, it’s about adapting and adjusting to the new normal. As a part of this post, we will offer some tips that DTC brands can utilize in this ongoing pandemic to help them thrive and survive.

Demand-Driven DTC Industries

The overall picture may seem gloomy, but there are still some positive points. The demand for DTC brands is increasing in many different sectors and industries. Mainly, brands that sell consumer products, alongside brands that jointly produce protective gear for medical professionals, have seen sales spikes.

Deliveries of food and retailers have been in high demand, as have many other companies specializing in eCommerce or currently enabling delivery. Even the biggest industry giants see their supply chains and wait times affecting their profits, which leads consumers to buy directly from manufacturers and Direct-to-Consumer brands. In addition to attracting new customers, this helps businesses raise their awareness, boost sales, and improve customer loyalty.

DTC Brand Trends as of COVID-19

With increased customer demand during Coronavirus, many companies developed new direct-to-consumer strategies. Yet, it is still vital for businesses to stay focused on the critical current trends affecting customers. Currently, we should focus on the following directions:

Authenticity:

Brands that succeed in direct-to-consumer marketing are generally mission-driven. In many cases, the impact is more important than high-quality products or services. The brands that follow in DTC are those with personality and authenticity. Any endeavor that disrupts an industry, promotes sustainable initiatives or removes barriers to entry is equally essential. Millennials and Generation-Z shoppers often expect brands to take a stand on important social issues, especially with everything going on in the world today. You will receive many thanks from your customer if you remain authentic and honest in all your interactions.

Personalization:

The purpose of personalized shopping is to tailor your interactions with eCommerce brands by using previous searches and purchases. A personal shopping experience is a hallmark of some brands – particularly those using direct-to-consumer strategies. Through them, you can decide which products you’d like in a bundle, use past purchases in your future purchases via emails or newsletters, and even personalize the items themselves. Gifts or customized products are becoming increasingly popular, but if their experience does not feel genuinely customized, they will look elsewhere.

Building A Community:

Marketing cannot be overlooked during tough economic times. Almost all direct-to-consumer strategies should take their marketing seriously to build a loyal community. Encourage community engagement and continue to tweak your marketing. Despite budget reductions, staying in touch with consumers is crucial, even if you must sacrifice mediums with higher costs. It is essential to build a supportive community that drives both demand and sales for any company. Since acquiring a new customer costs five times as much as retaining one, creating relationships and interacting with the community is a beneficial marketing strategy, which is now more critical than ever before.

Subscriptions:

Even though subscription methods are less of a trend, they have proven to be a tried-and-true method for keeping customers, with more DTC businesses now incorporating subscriptions into their overall business model – either as a core offering or an extra benefit. A more consistent cash flow can promote engaged users, establish a community, and encourage repeat business.

What DTC Brands Can Do To Succeed

Throughout COVID-19, companies are also reinventing the DTC model in many ways and grouping products according to individual needs. Here are a few:

  • Gathering Useful Data:

During the COVID-19 outbreak and in the future, this will allow you to make informed business decisions. With the right marketing campaign, you can understand what products are most appealing to your audience and what marketing campaigns are most effective.

  • Learn to Listen:

You can communicate effectively with your audience by using survey questions and questionnaires. This feedback allows you to learn and develop and make your consumers feel like their concerns are being heard. By using these insights, you will transform your brand and build meaningful relationships with your customers.

  • Adapt Messaging:

Compared to past iterations, your current messaging may need to differ. The current situation requires you to be more aware of what is going on. Your messaging must adapt to the changes in the world, as well as your imagery. A well-designed messaging strategy that reflects the new normal demonstrates that you respond appropriately to the current situation.

  • Become More Human:

You may benefit from humanizing your brand at this point. Consider how your branding characteristics may resonate with and correspond with your consumer’s needs. Instead of just repeating positive words, or reciting platitudes, communicate on an emotional level. People adapt and innovate during a crisis, and your business should be too.

Final Thoughts

There are not many businesses that will be unaffected by this situation right now, and the financial crisis is having a severe effect on everyone. Despite the challenges, your brand will successfully navigate the ongoing pandemic by understanding the major trends of the day, responding quickly and effectively, and following some survival tips.

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