How retail brands can leverage Direct-To-Consumer space in a post-COVID world
Guest Column: Apoorv Chitnis, Strategist at Sideways, writes on the three major trends that businesses should consider
Envisioning a post-Covid world, experts agree on three major consumer trends - seeking safety in buying experience, higher emphasis on value for money and favouring socially sensitive brands. We, at Sideways, believe that businesses too would (or rather, should) consider three major trends - increasingly leveraging online channels, achieving greater control over supply chain and aiming for category leadership by uniquely solving for consumer needs.
If we look at the intersection of these trends, Direct To Consumer (DTC) brands hit the sweet spot. DTC brands are usually digitally native vertical brands that manufacture products and sell them directly to consumers. They use an interesting channel mix to sell through brand’s own website, standalone retail stores, social media platforms like Instagram and even online marketplaces like Amazon. Developing own distribution channels gives them more control over the entire consumer experience.
As DTC brands cut middlemen and multi-brand retailers out, they significantly save on product mark ups. They pass on this cost benefit to consumers, making it a great deal for them. Selling through own channels also help brands understand their consumers better than selling through a multi-brand retailer.
For example, Winc – a digital native American winery gets website visitors to fill out a simple 6-question form to suggest them wines that are best suited for their palate.
Above all, what makes DTC brands loveable is their value proposition. Firstly, DTC brands operate in a significant product category or they make an ordinary category significant. Then, they position themselves to uniquely, making them memorable and desired. They usually offer value in at least one of the five ways within the DTC space.
Offering A Contemporary Product
Away is an affordable luxury luggage brand that offers stylish suitcases, handbags and backpacks. In America, branded luggage is subject to inflated prices and varying degrees of quality. So Away cut the clutter by launching affordable and well-designed bags. According to a luxury and lifestyle travel magazine CN Traveller, ‘Away made a relatively boring necessity into an enviable statement piece at an affordable price.’
Providing Unparalleled Expertise In The Category
Casper sells sleep products like mattresses, bed frames and pillows through their own website and retail stores. Interestingly, when Casper launched in 2014, it offered only one mattress model suitable for ‘all types of sleepers’. Rather than providing multiple options, they packed all their expertise in one product and made it available at an affordable price, with quick and free delivery along with 100-day trial period.
Offering Convenience Through Subscription
Dollar Shave Club came into being in 2011 almost as anti-rip off movement in the men’s razors category. Back then in America, men’s razors are very expensive and buying them from theft protection boxes in stores was a painful experience. So, Michael Dubin, Founder of Dollar Shave Club launched an online brand that would send monthly subscription-based razor blade boxes, suited as per consumers’ frequency of shaving per week. He played on the cost benefit up-front by making it part of the brand name. But mainly, he made an enjoyable video commercial explaining value of his novel subscription-based offering.
Addressing A White Space Consumer Need
Andy Dunn realised that when it comes to men’s trousers, American pants were too boxy and European pants were too tight. To address this problem, he launched Bonobos – only a men’s pants brand back then that offered a curved waistband, a medium rise and a tailored thigh for better fit. With Amazon not yet selling clothes online in 2007 and general scepticism around selling clothes online, Bonobos identified an unmet need and built an online apparel brand worth $300 million over the years.
Leading With A Philosophy or Social Cause
Bombas is a comfortable and trendy socks brand from America that was launched in 2013. What made Bombas unique and meaningful as a brand is that it promised to donate one pair of socks to homeless for every one pair bought by its customers. Socks being the most demanded clothing item in homeless shelters, Bombas have not only donated over 36 millions of pairs of socks so far but also lauded them as ‘The Greatest Sock Never Sold’.
Interpreted from: 5 Key Value Proposition for a Direct-To-Consumer Business – Edge by Ascential
In current times, retail brands will have to hold their ground and survive before finding energies to pivot in a new world. But in the long run they will need a newer approach which will help them reinterpret the entire business and not just marginally tweak offerings to suit the changed consumer needs. Going Direct-To-Consumers, retail brands can create meaningful value for consumers of a new world. After all, new ways of consumers cannot be accommodated by old ways of business.
Apoorv Chitnis is a strategist at Sideways. Views expressed are his own.
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