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Direct-To-Consumer: The New Way To Sell On E-commerce

Posted By Administration, Monday, March 26, 2018

Retailers have fast been turning to e-commerce as a way of driving profit with lower overheads. However, a few more revolutionary brands have seen potential in a new sales channel: that of DTC (direct-to-consumer).

Amongst many other commercial benefits, DTC models encourage a loyal customer base by tapping into some of the most lucrative consumer needs of the present day. Indeed, the most successful DTC products have the same features in common: they are curated, add delight and remove effort from buyers’ lives.

So, what makes a direct-to-consumer model different to core e-commerce? Why have they been so successful of late? How do they continue to thrive? Let’s see…

Defining DTC

DTC products hook their audience into a subscription service: consumers pay a rolling monthly fee, to receive a set number of products, some — or all — of which will be, in a way, unexpected. Take for instance Birchbox, one of the original, and most successful, beauty DTC services in the market. Buyers of Birchbox receive a gift box every month, with a curated selection of beauty products that have been chosen based on that individuals’ preferences (do they have blue eyes or brown? Do they wear lipstick or not?). Upon receiving their monthly purchase, Birchbox users don’t know what to expect when they open their delivery — the element of surprise is enticing and seductive; it keeps them coming back for more.

Birchbox also utilizes another DTC benefit, in that it’s a third-party seller: none of the beauty products are created by Birchbox themselves. This approach is replicated by many other DTC brands, including YogiSurprise and Not Another Bill. This freedom to partner with suppliers to create your subscription product means that anyone, anywhere can set up their own DTC brand. All you need to establish your own direct-to-consumer product is an idea, a website with WordPress hosting and a steady stream of stock that can be compiled through collaboration with big, successful brands (or more independent ones).

The magic of DTC

As stated, DTC taps into emotive human needs. Depending on the service, these brands offer personalization, delight, entertainment and ease, while also establishing a long-lasting and trusted partnership between consumer and company. This is a truly triumphant combination, and is the genius behind these products.

Not all DTC products arrive in a physical form. In fact, even Netflix, Spotify and Tidal are also classified as direct-to-consumer models, whereby a monthly subscription fee is paid in exchange for goods. These platforms rely heavily on the curation and personalization approach: offering customers the ability to create their own playlists, sharing music selections created in-house and encouraging further entertainment exploration. These DTCs are so effective that most consumers forget they pay for the service — in terms of commercial success, that’s ideal.

However, a DTC model should not be approached lightly. A brand must respect the contract it’s signing with DTC customers and ensure they meet their end of the bargain. Products must always be delivered in a timely manner (or instantly, if it’s a digital service), must be of the highest possible quality and offer customers flexibility to cancel, freeze, upgrade and downgrade when they need to.

Another important element of DTC’s appeal is the packaging in which it arrives. Best in class packaging for direct-to-consumer products are beautifully crafted, with clear branding and, of course, are ergonomic and fit through the letterbox easily. Packaging design also proves a great opportunity to surprise and delight – Birchbox does this very well, by using seasonal prints and creating limited edition styles that vary each month.

The future of DTC

As consumers’ lives continue to become faster paced and demanding, we may see a rise in DTC offers that simplify routine or take a chore out of the day. For example, LOLA delivers female personal care products at the right time each month, so the user doesn’t have to think about it. HelloFresh provides a weekly healthy meal plan, complete with portioned amounts to cater for the exact number of people in your household.

If you’re working on a direct-to-consumer concept right now, there’s no better time to see it come to fruition. From Doki Doki by Japan Crate sending out boxes of kawaii to boxes sending out books on a monthly basis, there’s a niche for everyone to revel in; all you have to do is find yours. 

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