Here's why DTC brands are killing it – and what you can learn from them

It's no secret that the retail industry is in a state of flux. Department stores are closing at an alarming rate, and retailers are having to come up with new ways to compete with the likes of Amazon and other online retailers. One way that some retailers are starting to compete is by emulating the direct-to-consumer (DTC) brands that have been taking the retail world by storm.

DTC brands like mattress disruptor Koala an travel brand July are quickly becoming the way of the future, and there are a few key lessons that retailers can learn from them, from the importance of personalisation, how to create great customer experiences and the power of social media marketing.

1. What do DTC brands offer that other retailers don’t?

DTC brands sell their products and services directly to consumers, without going through retailers. This can be done in a few ways: through the brand's own website, through social media platforms, or through marketplaces such as Amazon or eBay.

DTC brands are quickly gaining popularity in the world of retail, offering consumers a wide range of products and services that physical stores simply cannot match. One of the main benefits of DTC brands is that they offer greater convenience and accessibility to customers. By selling online directly to consumers, they eliminate tedious brick-and-mortar store hours and allow customers to shop from anywhere at any time. Additionally, the best DTC brands offer premium customer service that goes above and beyond what you would typically find at a retail store. Whether it's personalised product recommendations or concierge-level customer support, DTC brands strive to provide a superior shopping experience for their customers. Ultimately, this combination of convenience, selection, and top-notch service has made DTC brands an increasingly popular option for consumers everywhere.

DTC brands are unique in many ways compared to traditional retailers.

Whereas brick-and-mortar stores tend to focus more on selling established brands and standard products, DTC brands cater to specific niche markets and often create their own unique products. Additionally, DTC businesses typically have a different business model, focusing more on marketing themselves directly to customers instead of relying on intermediaries like wholesalers or distributors.

DTC brands also often have a better understanding of the latest trends and what consumers are looking for. This is because they have a close relationship with their customers, often collecting data and feedback through platforms like social media. Using this customer insight, they are able to design products that better meet people's needs and preferences.

Finally, because they operate through online channels rather than physical stores, DTC brands tend to have a very different approach to customer relationships and feedback. Whether through social media or email marketing campaigns, these brands make it a point to actively engage with their customers and constantly seek out their input.

Overall, the differences between DTC brands and traditional retailers reflect the growing shift towards consumer empowerment and direct engagement in today's marketplace.

2. The importance of personalisation

DTC brands have disrupted the retail industry by focusing on personalisation. By utilising data points such as a customer's location, purchase history and browsing behaviour, DTC brands are able to deliver a highly personalised experience that traditional retailers have struggled to match. In other words, they make an effort to understand their customers and create a unique shopping experience for each one.

There are a number of personalisation strategies that DTC brands use that could be adopted by traditional retailers. For example, many DTC brands utilise email marketing to send personalised messages and offers to their customers. Other DTC brands utilise social media to deliver personalised content and recommendations.?

Traditional retailers can also learn from the way DTC brands use technology to enable personalisation. Some DTC brands use AI to provide real-time recommendations to customers based on their past behaviour. This could involve things like surveying customers, asking them for feedback and using data analytics to understand their shopping habits in order to craft an differentiated improved experience.

3. Creating great customer experiences

It's no secret that retailers are struggling these days. Bricks-and-mortar stores are facing increasing competition from digital-native brands that have disrupted the industry by offering a better customer experience. Traditional retail brands need to take notice and adopt some of these same practices if they want to compete. Here are a few tips:

DTC brands focus on the customer experience from start to finish

They work hard to deliver a seamless, convenient, and enjoyable experience from the moment a customer visits their website or store all the way through to when they receive their purchase. Traditional retail brands could learn a lot from this focus on the customer experience. Personalising interactions with customers by using data and analytics to understand their preferences and behaviours should be a must.

DTC brands are great at using tech to enhance the customer experience.

Retailers should invest in upgraded technology that allows for seamless transactions, such as self-checkout kiosks or smart payment systems like Apple Pay or Google Wallet into the retail environment. This could also involve implementing interactive displays that allow customers to browse and order products even if there is no inventory available in-store. They should also look for ways to incorporate cutting-edge technology like virtual and augmented reality into their stores in order to provide a more immersive shopping experience.

DTC brands kill it on social media marketing?

By creating engaging content, collaborating with influencers and the new generation of content creators, retailers would build a strong community on social platforms and connect with their customers like never before. Strategic partnerships with key social and cultural influencers can help retailers reach a new or wider audience and boost brand recognition. In addition, working closely with content creators gives retail businesses an opportunity to tap into the creativity and insight of experts in their field, resulting in targeted, quality content that aligns well with consumer needs and preferences. Retail businesses should also use social media to monitor customer sentiment and be responsive to customer feedback.

Retailers can learn a lot from DTC brands when it comes to delivering a great customer experience. By focusing on it as a whole, personalising interactions with customers using data and analytics, and investing in technology that enhances the shopping experience, retailers can stay afloat in today's competitive retail landscape.

It’s clear that the DTC model is one to watch and traditional retailers would do well to take note of the strategies these brands are using. By tapping into technology, understanding the customer journey, and providing a seamless experience, retail brands will be off to a great start.

Renaud Frisé is Director of Digital and Technology at retail strategy agency The General Store.