Seizing the direct-to-consumer opportunity with Accenture and Google

Grace Francis, Chief Experience Officer, Karmarama, part of Accenture Interactive

Our patterns and purchase behaviours during lockdown have changed our relationships with brands. We’re asking more of products, from ethical sourcing to inclusive design and transparent supply chains. We’re asking more of the brand experience, expecting channel-agnostic chats with the people behind the product and a trusted and easy response if things go wrong.

Perhaps most tellingly, we’re expecting more of business leaders, from founders with a lived experience linked directly to their product, to corporate giants with the power to create environmental and economic impact in their sector.

Amongst them, brands selling directly to consumers (D2C) are faring well. 

These are businesses which have moved from purely transactional relationships, to building connections, and even a sense of community among their customers. They are doing so successfully even as Amazon continues to set the gold standard for digital customer experience. 

The D2C model is versatile. In a wide variety of sectors and categories, from financial services to FMCG, even extending to high-price and emotive purchases like cars, highly profitable D2C players are emerging. What they share is a kind of alchemy: brand savvy, digital excellence, and laser focus on customers’ needs.

When the business model is correct, rewards are considerable. Profits multiply but more importantly customers loyalty starts to grow.

How can brands rethink themselves for D2C? A talk I gave together with my colleague Ben Bilboul and Nicolas Darveau-Garneau, Google’s Chief Evangelist (watch here) to explain three key levers in the D2C playbook. 

The KPI which helps you retain the right customers

The first lever is benchmarking. Nicolas spoke compellingly for using customer lifetime value (CLV), rather than sales, as the KPI D2C brands should benchmark against. 

By looking at millions of customers and transactions, Google can now help brands understand the attributes and behaviours of their most valuable customers. This insight considers both the demographic (how we identify) and the psychographic (our values, opinions, interest and attitudes).

Combined, this insight enables Google to predict who’s going to be an active customer or even a superfan after just one or two purchases. 

Gold Standard Expereinces

This has big implications for the second lever, customer experience (CX). 

To learn what customers are looking for in a gold standard experience, we focus on those with greatest lifetime value (CLV) for clues. Not only do those customers tend to purchase with more frequency, giving us more data points to analyze, they also exhibit traits we hope to match with others. This propensity modelling enables us to attract more customers with high CLV.

Strong D2C brands take this idea one step further. They excel at seeing their entire business from the customer’s perspective, modelling everything from the supply chain to customer touch-points to create a compelling experience. At Accenture we talk about the Business of Experience. This way of working considers the whole of the business, retaining customer centricity while igniting growth.

The result is a brand that pre-empts the customers’ needs but also retains the human connection across product, service and brand association.

Passing the T-shirt test

CLV modelling and CX speak to the pragmatic elements of our decision making, the third lever is an emotional driver: brand trust. In our research, we have observed that the most successful, profitable brands are those that have a significant connection with a customer base. 

When a customer advocates for a brand—sometimes known as the T-shirt test, literally wearing your brand name with pride—they’re expressing a sense of alignment and allegiance with your company.

In D2C companies we’re seeing this taken a step further, a connection between brands and often founders with a lived experience that echoes that of their customers, creating belonging, of community, of shared purpose: if they met a stranger in the street wearing the same brand, they might greet one another. This is a space where founders and fans are equal and aligned in their beliefs. 

The most effective D2C brands of recent past include makeup powerhouse brand Glossier, who focused first on building a community with their site Into The Gloss and waited to know their audience before creating products to meet those customers’ needs. Unsurprisingly consumers who are most active in Glossier’s communities are likely to have the highest CLV.

Perhaps the “C” in D2C shouldn’t be Direct to Consumer but rather Direct to Community.

This isn’t just about tribes, D2C brands are thriving because they center purpose alongside profit in their core offering. In a year when we’ve been stripped of our autonomy and agency by Covid, where we spend our money is more important than ever a study we carried out in 2020 found 88 percent of consumers think purpose is at least as important as the customer experience. Every pound, dollar or yen is a vote for the kind of world we want to see.

The power of partnership

During our conversation, the key message is the alchemy of brand and business, considering the holistic requirements for growth– the combination of the deep data capabilities of Google Cloud, and the business of experience within Accenture. 

As more brand owners chart their path towards post-pandemic success, we’re always excited to lend partnerships such as ours to help them deliver on both purpose and profit.