Page Contents
What is a brand?
The term ‘brand’ can have several meanings, from a customer or a company point of view:
It is the name, design, symbol, or other feature that differentiates one product (good or service) from another in the marketplace.
A brand is also how the customer perceives and experiences the overall engagement with the company. It reflects the values and functions of the company and what it stands for. A brand defines the business’s strength, quality, and personality.
A brand is the company’s reputation as perceived by customers. This sometimes can be different from what the company thinks about itself.
Why does a company need a brand?
Today’s consumers have many options while purchasing a good or service. Branding is essential for the following reasons:
Improves and increases company awareness
A strong and recognisable brand can attract new customers.
Reinforces the company within its industry
A company needs a brand to ensure its product or service is clearly differentiated within its industry.
This differentiation ensures the consumer chooses its product or service and the competitors.
Conveys intangible values to customers
A brand is a representation of the values of a company.
It summarises what the company stands for through its products and working style.
Reminder to existing customers
A robust and well-designed brand locks in existing customers who have had a good experience with the brand.
The growth of direct-to-consumer (DTC) brands
Over the last few years, the massive growth of online shopping, or e-commerce, has shifted the shopping experience from the retailer to the consumer. The Covid pandemic accelerated this shift, and today, e-commerce contributes to nearly 20% of total retail sales in the US.
Image source: https://www.bigcommerce.com/articles/direct-to-consumer/dtc-trends/#current-dtc-landscape
What is a direct-to-consumer (DTC) brand?
A DTC brand controls all elements of the selling experience, such as:
Product manufacturing
Marketing
Sales directly to the end user or target audience
A D2C brand has a much shorter route to its customers, than the conventional retail experience. as seen in the graphic below.
The earliest brands to use DTC were in the easy-to-ship categories such as makeup, fashion, skincare, and hair care. Today, the DTC space also includes more complex and higher-priced brands such as home technology.
The DTC industry today covers several types of players, such as:
Online marketplaces such as Amazon, Nyka or eBay
Single brand e-retailers such as Lenskart
Store-in-store facilities in regular brick-and-mortar locations such as Mama Earth
Top consumer brands are also increasingly embracing the direct-to-consumer model for many reasons, such as:
Maintain control over their consumers’ brand experience
Understand the customer better through deeper insights into their behaviour
Create a clear and differentiated value proposition to customers
Drive sales
How to create a DTC brand?
A brand wishing to enter the D2C space should follow these important branding and product development steps to be successful. Have a reason to enter the market
Identify an opportunity to disrupt an existing market.
Identify an everyday item that can be launched at a lower price than competing brands.
Identify and address customer pain points
A brand must solve a customer’s pain point.
This ability is more important for a D2C brand because the research for a suitable brand is done online, and multiple factors influence a customer’s decision.
Design your marketing and branding efforts to revolve around this critical aspect.
Keep the options simple
The brand should offer well-designed options and not a flood of options.
This makes the entire search and purchase experience straightforward and convenient for the customer.
Personalise the customer purchase experience
D2C brands need constant data flow to initiate and improve the customer experience.
The collected data makes the customer’s journey a unique experience and provides value in upselling, cross-selling, product bundling based on previous purchases, etc.
Create virtual experiences
D2C brands operate in the online space, so their brands can and should be experienced online.
The launch of Virtual Reality (VR) tools, larger bandwidth and faster internet speeds have simplified the entire online customer experience so that the customer can try the brand before purchasing it.
Use influencers and influencer marketing
D2C brands operate in an online environment where there is no in-person brand experience.
New D2C brands also must get customers on board.
Influencers provide a human touch to online brands and are considered trustworthy references for product reviews.
Use content marketing extensively
D2C brands may not have substantial advertising budgets.
They still need to build their brand reputation, especially in an environment where customer attention can last just a few minutes, if not seconds.
A robust and engaging content marketing strategy helps the D2C brand pull customers to its website, create trust, engage with the customers, and answer queries.
Offer post-purchase benefits
A successful brand should offer several post-purchase facilities and benefits to the customer.
Facilities such as free delivery, free returns, or a free replacement of damaged goods reassure the customer in the ‘online only’ space and reinforce brand values, which will lead to repeat purchases. Create customer advocates
Give incentives to customers to bring in more customers.
Referrals are a huge source of new customers, and rewarding existing customers for referrals builds loyalty.
Build user-generated content
D2C brands must encourage customers to create and promote their content about the brand.
This could include posting photos and videos on their social media pages, responding to content on other social media pages and engaging in online forums to discuss the brand.
This helps the brand go viral and provides a fertile ground to build the brand values.
Conclusion
The direct-to-consumer business is growing rapidly and there are more opportunities for companies and brands to reach their target audiences in a more focused manner than traditional, brick-and-mortar retail channels.
The entry barriers for a new brand in the DTC space are relatively low. Still, it must compete with giants such as Amazon and Reliance Retail, trailblazers in the market and have built massive customer bases.
An effective D2C branding strategy requires the company to have an up-to-date digital infrastructure. Suppose the brand can provide a hyper-personalised digital shopping experience to its customers. In that case, it can stay unique and relevant to the customer, thus ensuring the customer does not consider competing brands.
D2C brands can access many direct customer data like search behaviour and purchase habits. A D2C brand should build on these insights and deliver unique shopper experiences, to be relevant and successful in a crowded marketplace.