Direct to consumer brands, who market their products and services directly to consumers, are re-writing the rules of the marketing industry and causing upsets in all corners. Are there insights to be gained from the success of this phenomenon for marketing more generally? What can other brands learn from the strategies employed in direct to consumer campaigns? Here’s the lowdown.
What is direct to consumer marketing?
Direct to consumer marketing, sometimes abbreviated to DTC, could be seen as self-explanatory in that it denotes marketing to consumers. Yet there is more to it than that. Investopedia defines DTC as ‘marketing that is aimed toward consumers when access to a product may require an intermediary.’
Investopedia explains that, traditionally, this kind of marketing was popular with pharmaceutical companies or financial services, as in these industries the customer often cannot obtain the product without liaising with a third party (think prescription medicine and the need to visit a doctor).
The objective of DTC marketing, in the case of a pharmaceutical company for example, is therefore ‘to create a dialogue between patients and their doctors with the ultimate goal of increasing sales.’ DTC marketing is also seen as a vehicle for increasing product awareness, engagement with customers and market enlargement.
Why is DTC causing an upset?
With this definition of DTC marketing limited to very specific industries, you could be forgiven for wondering why it is causing an upset to marketing more broadly.
Yet according to a recent article by Marketing Week, DTC brands have exploded onto the scene in less conventional industries and are ‘ripping up the marketing playbook.’ The likes of Dollar Shave Club and Warby Parker, a US online retailer of prescription glasses, have proven wildly successful and reported huge profitability and subscription numbers. Another recent addition to the DTC club, beauty brand Glossier, told Marketing Week that its move came in response to the decline of department stores and the increasing need to get to know customers.
Glossier has cleverly positioned its brand as ‘the antithesis of the beauty industry’s big beasts,’ with president and COO Henry Davis explaining to Marketing Week that ‘Glossier is very upfront about its strategy and its firm belief that owning the relationship with the customer is the only way to build a brand.’
How will DTC impact marketing?
Marketing commentators are united in the belief that DTC will inevitably impact marketing, but the question of how, where and when is out for debate. For CMS Wire, brands taking advantage of the DTC model are ‘distinguished by their ability to superserve existing customers.’ CMS Wire believes that DTC brands are taking advantage of new data streams, building ‘personalised customer relationship strategies that are responsive to every consumer interaction’ and making use of highly flexible supply chains to deliver products and services.
With the customer journey increasingly complicated and savvy customers demanding ever more from the brands they interact with, the level of service that DTC brands are capable of delivering could quickly create a new standard of expectation that others are required to match.
Another way in which commentators believe DTC could impact marketing more broadly is in terms of content. According to NewsCred, the rise of DTC marketing also fuelled an increase in content-focused marketing, as brands realised they needed to ‘say something’ as opposed to relying on a middle-man to generate sales. In this content-led context, NewCred believes that ‘collecting opt-in identity data and then building on that relationship through content and services differentiates winning brands.’
NewsCred also points to Glossier as an example, reminding us that it first originated as a blog before it ‘birthed a hot product line.’ Glossier founder, Emily Weiss, invested funding ‘in data and analytics technology to determine how well each product performed on social media,’ a move that generated a ‘massive, engaged fanbase’ and ‘600 percent year-over-year growth from 2015 to 2016.’ These eye watering figures highlight the central importance of content to the growth of DTC, suggesting that those currently lagging behind in the content arena could quickly see themselves outmanoeuvred by competition.
To remain relevant and competitive, brands will need to keep a close eye on those adopting the DTC model and learn from their successes. While the model may not be suitable for every product and service, it highlights some important trends that can generate insights to be applied to every form of marketing.