In Part 1 of “The Return of Direct-to-Consumer” series I discussed WHAT direct-to-consumer looks like in 2021 and how the definition and opportunities have evolved.
In Part 2 of this series I will provide examples of DTC brands that have embraced experience-driven commerce and are winning big because of it, and those that aren’t quite living up to the DTC brand promise – a cautionary tale.
Which Capabilities to Prioritize to Compete in the DTC Landscape?
Direct-to-consumer is all about the consumer, so when considering a DTC play, start by understanding the experience capabilities that exist in the market. Your customers will judge their experience with your brand based on their last best experience with other brands so it’s important to be on-par, if not exceed their reference point. The goal is to become that last best experience they reference.
When we work with our clients to evaluate and prioritize a capability and program portfolio we typically use our Now, New, Next framework. Using this framework we compare a brand’s experience to market comparables to determine if you are offering an on-par experience, an innovating experience or differentiated experience in the eyes of your customer.
To understand the depth and breadth of DTC experience capabilities based on the N3 model we first created a data set, for example:
- mobile by design
- product videos
- installment payment options
- try before you buy
- product configuration
- product customization
- digital channel selling
- digital + physical channel selling
- phygital experiences
- sustainability commitments
- diversity & inclusion statements and proof points
We then selected and assessed a subset DTC brands to understand which ones were the banner examples of delivering Now, New and Next experiences their customers. Not all DTC brands are delivering innovating experiences which presents opportunities for category leaders to adopt innovating DTC go-to-market strategies.
DTC Now, New, Next Results
Now – Representative DTC Tablestakes Experiences
For any DTC experience, consumers expect easy, frictionless, flawless interactions that allow them to shop, pay, and track at their convenience, usually on their phone.
1. AllBirds: Multiple Payment Service Options
2. Glossier: Mobile-Friendly Checkout
3. Cobalt District: Easy Order Tracking
4. ThirdLove: Guided Selling via Gamification (e.g. Quizzes)
New – Representative DTC Emerging Experiences
Brands who have conquered Tablestakes add features that enhance the customer experience and drive loyalty. In some cases, moving traditionally physical, complicated buying and selling experiences online.
1. Love & Wellness: Supplement Subscriptions
2. Versed: Installment Payments
3. Carvana: Buy/Sell Cars Online. Get an instant offer to buy your car.
4. Away: 100-Day Product Trial
Next – Representative DTC Innovating Experiences
Whether it’s a considered purchase or an impulse buy, advanced digital features geared toward meeting the consumer where they are, body, mind, and soul, drives expectations within the category across brands.
1. Versed: The Brand is the Message
2. Warby Parker: AR/VR Glasses Try-On
3. Tesla: Car Configuration
As with any general survey and assessment results, your mileage may vary. For example, if you don’t have a product that lends itself to configuration then obviously that capability might not be applicable to your brand BUT do your own survey and assessment of market comparables. Is there a competitor who has innovated a way to make that same type of product configurable in some way? Even if it’s personalizing packaging? Thinking outside the proverbial box, and in this case that might mean literally, will allow your brand and products to stand out amongst the sea of DTCs in 2021.
Now that I’ve outlined WHAT direct-to-consumer is in 2021 and provided examples of brands who are doing it well, Part 3 of “The Return of Direct-to-Consumer” series will explore the WHY of a direct-to-consumer business model, especially for traditional B2B organizations.