The rise of direct-to-consumer (DTC) brands has profoundly reshaped nearly every industry over the past decade. As a result, this designation of “DTC” seems to suggest some sort of mystical secret sauce that bestows unstoppable power on a brand. In this sense, the label does a disservice to these companies and the marketers behind them, and may be misleading to new brands that seek to adopt the DTC playbook.
The key to DTC success isn’t a mystery. Across the board, the strongest DTC brands are the ones that lay the strongest foundations. Let’s take a look at the fundamentals that aspiring DTC brands need to have in place before ramping up marketing spend to drive sales and customer file growth.
Conversion Rates
It’s absolutely pointless to spend a significant amount of money to drive web site traffic if you haven’t first optimized your on-site conversion rate to maximize every marketing dollar spent. A healthy conversion rate for retail is more than 4%. That means if your conversion rate is less than 4%, there is still work to be done on your web site. Common areas that require attention include product merchandising, navigation, creative and overall functionality. Monitor site activity carefully to discover where potential customers are dropping off most frequently and begin your optimization efforts there.
Customer Data And Security
Privacy and data security aren’t the sexiest topics, and it’s easy to understand why they get deprioritized in favor of bigger-picture creative discussions. But if a company ramps up its marketing efforts without first getting its arms around how it’s handling customer data — and how that handling is conveyed on its web site — it won’t take long for the company to run into regulatory and legal trouble. Customer information capture is absolutely essential for brand success today — so make sure your privacy policy is clear and up-to-date.
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In-Store Information Capture
Speaking of remarketing: For brands with brick-and-mortar locations, it’s also important to capture customer information in stores to feed back into remarketing efforts. This data is vital when it comes to driving customers back to stores or to online offers. As a reference point, today’s best-in-class brands are boasting in-store information capture rates of between 60% and 80%.
In-Stock Inventory
I’m sorry I have to include this on the list, but experience has told me that I must. It should go without saying that you can’t sell a product you don’t have. So please, please — before you launch a campaign, ensure you have a real-time handle on your inventory and can appropriately turn off promotions for a given item as soon as it sells out.
Creative Assets
It is critical that you have the right creative assets to drive results. That typically means amassing a combination of both aspirational lifestyle photography as well as strong product visuals, including multiple viewpoints and, ideally, video. Brands that launch campaigns before establishing a strong asset portfolio will be severely limiting the possibilities and results of their campaigns.
Email Sign-Ups
Despite all the exciting opportunities that established and emerging social media channels bring to the table for DTC brands, a strong email strategy and adherence to best practices in this arena are key to growth. Before launching campaigns, it’s important to ensure you have a prominent email sign-up on your site to which you can funnel traffic. The sign-up should at least be above the fold, but ideally it would manifest in a pop-up or light box with a new customer acquisition offer.
Retargeting And Digital CRM
Finally, once your site is ready for prime time in terms of conversion rate, privacy policy and email sign-up, you need to ensure you’re able to capture and leverage the traffic that comes to your site for retargeting purposes. These programs are absolutely essential for further boosting return visits and conversion rates. As a part of this preparation, it’s important to implement a digital CRM program so that you are also immediately ready to remarket to customers who purchase via email, paid social, paid search and display.
Many of today’s established and emerging DTC brands arose from a great idea — a better, often tech-centric way of delivering goods or services to consumers. But while a novel idea and ambitious marketing plan are key to gaining market traction, success does not start and end there. The sexiest brands on the market today are, in fact, the ones that are most buttoned-up behind the scenes. Aspiring DTC brands should train their resources on mastering the fundamentals first.
Polly Wong is Managing Partner at Belardi Wong, a leading direct marketing firm and strategic partner to more than 300 DTC brand clients. Her focus is on emerging best practices and trends across channels and categories, with an emphasis on leveraging data and technology to push retail forward. Founded in 1997, Belardi Wong has spearheaded customer acquisition and retention strategy for leading brands across multiple verticals, including Allbirds, Warby Parker, Blue Apron, Bonobos, UNTUCKit, Petco, Restoration Hardware, Lucky Brand and CB2, as well as for non-profits such as New York University, NAACP, EMILY’s List, and Human Rights Watch.
