Amazing things happen when you care about your customer, and that is why D2C is winning!

I recently read Kent Bennett from Bessemer referring to D2Cs aka Direct-to-Consumer as earthquakes. The unicorn businesses may seem unique and exclusive, but it is these earthquakes that are creating gorges and valleys where none existed before. And I absolutely love that!!! The best D2C brands are not only brilliant commercially and profitably, they are known to care. They care about their customers, their customers' emotions, their problems, their money, their physical and digital experience. In short, they are all about solving a seemingly simple but a serious problem for consumers and reducing further nuisance in consumer’s already hectic lifestyles. These digital-native, customer-first brands are democratizing how people shop/use products, and thus, setting new expectations for both consumers and entrepreneurs, sometimes at the same time.

This isn’t a new trend, but now more critical than ever…

Market research experts have been talking about a change in consumer behavior – a shift form meaningless to purposeful buying. While the change might have started years ago, the onslaught of Covid-19 has amplified the push and urgency for both brands and consumers to be more thoughtful. For brands - putting people/life before profit, and for people - supporting brands that drive real value proposition vs. extortionate “exclusivity”, is what we all ought to be considering.

And DTC brands are on that path of becoming that thoughtful, purposeful “friend” that consumers need in their daily lives, right now! While you may or may not believe in this movement, DTC brands are changing and disrupting the large enterprise and conventional methodologies in a fraction of the time that it took for global consumer giants to capture the market.

D2C or DTC aka Direct to Consumer brand begins with control and clarity. They allow manufacturers to control the entire customer experience. Without having to fight the shelf space and high middle layer costs, their/our, purpose is to bring the best value directly to you. 

But, like every new trend/idea, there are a lot of beliefs/skepticism around D2C businesses. One of them is this – 

People think that brand/business owners consider a direct-to-consumer model to avoid the major overheads often resulting from the traditional value chain. This is not completely true. 

Yes, of course, the very basis of a D2C business model is to connect to the consumer directly. But it is as much in benefit of the consumer as much as it is to the business.

For the business, selling directly to the consumer gets rid of the expensive middle layers, gives them complete access to customer insights. I’m sure every entrepreneur will agree that how extremely valuable such insights are in creating incredible customer experiences and customizing their journey. For the customer, on the other hand, this means better value in terms of product quality, brand experience, better shopping/buying journey, and of course, costs. That’s the dream, isn’t it? After all, who wouldn’t want to pay the right price for the product?

These numbers will probably give you a better picture – 

61% of consumers would be willing to share more information with brands if it would allow them to have a better shopping experience.

26% of consumers believe that an improved security and user experience on the payment gateway facilitates their consumption at D2C.

But that’s just the tip of the iceberg that this D2C model will become someday, as I see it.

D2C brands that are hitting the right note, and I am loving them…

Of what I have seen, learned, understood, and implemented (still doing), the very need to be directly accessible to consumers has more to do than what it seems. 

Let me give you examples. Here are a few ground-breaking D2C brands that I love. Each of them identified a serious issue in their respective spaces, found a solution, and made life easier for their users.

Thirdlove 

Yes, another intimate wear brand for women, you might say. But it’s not your average bra brand. Founded by the husband-wife duo, Heidi Zak and David Spector, Thirdlove started with the simple idea of making bras comfy and sexy at the same time. Ask any woman and they’ll say that they compromise either on the look or the feel when it comes to bras. Not fair, right? And this results in the most common problem among women – wearing the wrong bra! It sounds very basic but it’s a very, very critical thing. As a woman I can vouch for that. We spend half our lives not even realizing it! 

Annual Revenue: $160 Million

Allbirds

Did we really need more shoe brands? 

When it comes to sports shoes, the standard thinking is – if it’s a big-name brand, it’s better. Even if it means spending a fortune and getting confused with a million variants. Founder of Allbirds, Tim Brown decided to do just that. Defying the traditional shoe-manufacturing model and synthetic materials, he decided to give people environmental-friendly footwear which is not adorned by branding. It’s all about the shoe itself. Made with merino wool, Allbirds’s focus is on the shape, look, and feel of the shoe rather than the name on it.

Annual Revenue: $100 Million

Harry’s

What’s the big deal about a new men’s razor brand? 

Well, that’s what Andy Katz-Mayfield thought before he realized that buying a razor, the traditional way is nothing but a headache. So he and his friend Jeff Raider (co-founder of Warby Parker) set out to make razors that are cheaper than the mainstream brands, easy to buy, simple to use. They live the simple principle - “Unlike the big brands that overdesign and overcharge, we make a high-quality shave that’s made by real guys for real guys.”

Annual Revenue: $200M

Brands for the people…

People often ask - Why create a DTC business model when you can sell through Amazon, Walmart, Alibaba etc.? 

It’s not just about cutting costs and people in between, cheap deals or bargains. It’s about solving a higher, bigger problem. With life getting more complicated, irreversible environmental change, we need sustainable, ethical approaches more than ever! Customers deserve to be understood as people and not statistical data, to be painted with a broad brush. If in the process, everyone ends up saving costs, it’s only a great thing, isn’t it? Simplicity is the new luxury. Easy to buy, easy to use, and easy to operate are needs of the hour for all of us.

It’s very rewarding to be an entrepreneur and turn an idea into reality. But to be able to create something that can help people and have a positive impact on their lives, now that’s being truly sustainable. And that’s the biggest return that your business can fetch  you.

Stay tuned for my part of this story, next week!