Where, how and with whom retail consumers shop has changed. Traditional powerhouse brands like Sears, JCPenney and Barney's have struggled to adapt to changing expectations and now face new competitors better equipped to meet those expectations.
In this midst of changing consumer behaviors and expectations, direct-to-consumer brands have gained market share by providing an ecommerce experience that emphasizes convenience, price and engagement - so much so that 81% of consumers say they'll make at least one purchase from a D2C brand within the next five years. If brands are to avoid being made obsolete, here are a few lessons retailers need to learn from the industry's innovative new members.
Lead with convenience to win new customers
One in five consumers rank convenience of the purchase process as the most significant convenience factor when considering a purchase from a new retailer, and 40% ranked free or expedited shipping as the most significant factor, according to Yes Marketing's 2019 Customer Lifecycle Report. Brands have struggled to meet the challenge of instant gratification retail spurred by the likes of Amazon and Walmart. But more than ever, shoppers won't interact with a new retailer if it's not convenient to do so.
D2C brands are embracing ecommerce strategies that emphasize convenience as much as they do price and quality. The key to this success is implementing convenience at the first consumer touchpoint, showing potential customers that throughout their journey with the brand, convenience will remain at the forefront.
For example, eyewear disruptor Warby Parker's landing page highlights their trademark convenience acquisition tool: free home trials. In addition, "Free shipping and free returns, always" is featured on every page. By offering convenient, low commitment touchpoints like free shipping and trials, Warby Parker incentivizes first-time shoppers to engage with their brand.
The first thing potential customers see upon visiting WarbyParker.com is a frictionless, no-commitment opportunity to engage with the brand.
Leverage price to drive new acquisitions ... with caution
Not surprisingly, price is top of mind for consumers when they decide whether or not to purchase from a new brand. Yes Marketing's data found price ranked highest among product-related features that most influence consumer decisions to purchase from a new retailer (47% ranked it as their top choice).
Of course, discounts always help brands attract new shoppers. D2C sleep brand Casper encourages first-time buyers by offering $100 off their first purchase, using attractive pricing to get in the door, and then emphasizing the quality of their product to build loyalty.
But lowering prices isn't a long-term fix for many brands, and if you don't use this strategy cautiously, it can devalue your products in the eye of the customer. Rather than focusing solely on discounts, brands can emphasize the value customers receive from the products and experiences they purchase, so they feel justified, even when prices are high. Casper can lure customers in with the initial discount, for example, but they must remind customers that they're getting a long-lasting and high-quality product. Even better, they could throw in value-added services or additional products and accessories that increase the perceived value-to-price equation without devaluing their featured products.
Casper eases the financial commitment of buying an expensive mattress with first-time incentives. In addition, the survey collects valuable data to improve their experience.
Use creative engagement to build loyal relationships
Prioritizing first-time acquisition is important, but shoppers need to be properly engaged beyond the first purchase to cultivate loyalty. Many D2C brands have taken a refreshed approach to their email marketing campaigns, providing value beyond discounts and abandoned cart reminders. But it's important to remember email campaigns must be relevant and engaging for them to be effective.
Targeted, relevant content informed by behavior and preferences (like "10 activities for the outdoor lover this fall" for a hiker) appeals to customers beyond generic seasonal sales promotions. Men's ecommerce retailer, The Idle Man, adds value with gift ideas, outfit advice and other creative content to establish the brand as a source of inspiration rather than a sales engine.
This content can only be effective if it's informed by customer data - whether it's your own data captured from your customer's behaviors, preferences and interests they've shared with you or data from third parties. Since customers now expect more relevant communications from brands before they've even engaged with them, you'll need to use a diverse range of data sources to meet this expectation.
The Idle Man's email campaigns use editorial content to inspire and inform, not sell.
Direct-to-consumer brands have challenged the traditional mix of convenience, price and engagement that traditional retailers have historically relied on. In the modern era of quick commerce, these digital natives understand that convenience drives acquisition and loyalty and have geared their strategies to showcase and deliver convenience better than ever before. The challenge for brands is to understand the needs of the modern consumer and determine how to best deliver value as retail continues to evolve.