It’s a buyer’s world—we’re just living in it. At least that’s the takeaway from the unstoppable growth in the direct-to-consumer (D2C) sphere. Shoppers are turning to brands that sell exactly what they want—conveniently, directly and frequently online. Two-thirds of consumers expect direct connectivity with a brand, paving the way for success for digital-focused brands eschewing the traditional model of selling product through a retail partner.
The conveniences inherent in online shopping have directly impacted the growth of D2C brands, not only by removing the need to shop at a brick-and-mortar location, but by eliminating the cost of selling through a middle-man. The result? Higher quality products at affordable prices. Smart luggage provider Away says it best with its tagline: “First class luggage at coach prices.” The brand’s suitcases use the same materials as luggage that costs three times as much, but by owning production, marketing, distribution and sales, Away is able to provide quality at a lower cost.
Some of the most successful D2C brands have built a business model based on expertise. Rather than produce a variety of products like retail giants of the past, successful D2C brands focus on a single category—and frequently, a single product. Consider men’s grooming company Harry’s, which launched with just one razor. After being inundated with options in the shaving aisle, founder Andy Katz-Mayfield sought to simplify the razor shopping process. Using his experience as a shopper, Katz-Mayfield created one style of high-quality razor, bypassing the need to sift through the myriad options at the store. Focusing efforts on the one razor allowed Harry’s to be viewed as a category leader despite being newer to the market than more established brands.
The D2C model also lends itself to a price transparency that customers will soon come to expect as the norm. D2C clothing manufacturer Everlane breaks down the exact cost of producing an article of clothing, from materials to labor to hardware, for every item for sale on its website. This “true cost” is displayed adjacent to the price at which Everlane sells the item, and also compared to the much higher price at which a traditional retailer lists a similar item. With nearly 40% of consumers saying they would switch to a brand that is more transparent, this tactic is more than just a way to showcase the value to the customer—it allows brands to develop personal relationships with their audience.
The stories D2C brands cultivate are the natural continuation of a more transparent relationship with customers who feel increasingly comfortable discussing their affinity for brands they trust. D2C brands are harnessing the power of user-generated content, in which people share their experiences with a product, to both study and broadcast what they’ve learned about their audience. Rent the Runway, a company through which users can rent and return designer clothing, fills its Instagram with reposted images of consumers who have tagged the company in their social posts. Their feed reflects the desire of their community: real women living their best lives affordably. Rather than buying their audience through television or print ads, D2C brands are creating their audience—and proudly showing them off.
There are lessons to be learned from D2C brands even if adopting the sales model is not always feasible. Namely that specificity is key and transparency is the future. An understanding of the fundamentality of these two concepts will help brands as they seek to foster deeper relationships with consumers in a digital-focused world.