Digital disruption of retail has picked up pace in 2017, with apparel brands seemingly taking their turn in the eye of the storm in recent weeks. Levis, Nike and North Face owner VF have become the latest retailer-reliant mega-brands to announce a new focus on the hotly contested and fast growing direct-to-consumer (DTC) market.

It’s easy to see why extracting middlemen and creating direct, loyal relationships with customers digitally is attractive. However, it can be a challenging environment, especially for brands new to fulfilment.

We have listed six ‘golden rules’ brands must follow to create successful direct customer partnerships:

1. Build and maintain trust

DTC brands must appear open and honest right from the start. Brands have access to precious sales data, as well as personal information like home address & bank details. So a responsible image is crucial when there is no physical retail store to stress test credibility.

This is especially important in markets where fake brands or an unreliable postal service undermine trust. A Chinese consumer who took part in one of our DTC focus groups explained that a brand following the Netflix or Birchbox model, which expects consumers to commit to an immediate monthly sign-up is “a lot to ask of a new relationship.”

Santiago Navarro, from Garçon Wines, says his brand plans to build up trust quickly by demonstrating consistent reliability. He says Garçon’s market research shows potential consumers love the convenience of subscribing to a regular supply of wine, delivered through the letterbox, as it means one thing less on their weekly to-do list.

2. Hand over control

Brands like Uber or Netflix let consumers digitally configure supply to meet their needs, and are always accessible and responsive to customers. Basic information like phone numbers which link to real humans, as well as email and social links can be vital - our research shows that customers might walk away if they feel they can’t speak to someone easily.

Daniella Peri, co-founder of Your Happy Period, says their model, which delivers a tailored tampon package at a time to suit customers, is all about giving girls and women control.

“Not one size fits all, not one diet fits all. [Similarly] the packs in the stores do not fit my period, so we developed a box that better suits our needs,” she said.

3. Be Flexible

Adaptability is essential. Brands need to be prepared to listen to customers and respond to their needs, such as making it easy to pause deliveries when on holiday, for example.

Nick Dormon, managing director at design agency Echo, says brands who are prepared to be flexible to meet customer demands will be well rewarded: “[Customers] will give you information if you give stuff back which is designed for their specific needs,” he explains.

4. Show your emotional side!

DTC services need to feel accessible. People like to feel there is a real human behind the digital façade who is interested in their specific needs. So ‘‘people presence’ on apps and websites (photos, staff names, the founder story etc.) is important, as is using humour, cute messages and communicating with a human tone of voice.

Daniella Peri says feeling part of a community is important to their customers. Yoppie responds to physical needs by delivering a monthly product but also caters to an emotional need to feel part of a positive community by donating to developing countries on customers’ behalf. Peri points out that going into Boots to buy tampons struggles to live up to this customer experience

5. Surprise!

Customers like DTC brands partly because their efficient, modern order & delivery systems inspire a ‘savvy’ feeling. However, routine deliveries lessen this effect. Brands can counter this by adding an element of surprise, such as offering a ‘variable reward’ like occasional small gifts, vouchers or samples with deliveries.

Beauty box brand Birchbox curates very box with products based on data shared by customers. This information exchange is key to the signing up process which meets the needs of the customer but also ensuring Birchbox has access to valuable sales information too.

6. Be delightful

Finally, a great DTC business isn’t just about having efficient & engaging sign-up, order and delivery. They need to create an emotional bond through physical touchpoints too.. In lieu of a beautifully designed retail store, a chic sales assistant and vanilla candle, DTC packs must be the sensorial salesperson, and gift-like (even if rather functional). The ‘unboxing’ phenomenon online shows how important this element is to customers.

Birchbox marketing director Janis Thomas says the firm partners with high quality, design and visually engaging retail, celebrity and media brands such as Tatler, Millie Mackintosh and Boden to ensure customers are continually delighted by new and changing box designs.

In the end, a great DTC brand must uphold the same values as any great partnership - if they can ensure both parties get to know each other better, they will find continual and mutually benefiting union.

 

By Kahlia Pyle, research director at The Big Picture

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