Ultimate DTC Retail Guide to Scale Your Sales in 2023

DTC is short for direct-to-consumer retail. In this model of commerce, the brands eliminate the middleman by connecting with their customers directly. So, there is little to no reliance on retailers for selling their products. DTC commerce has picked a significant pace in the last few years. It is expected to generate a revenue of $151.20 billion this year, which is an approximate 16.9% increase from 2021.

It began with small businesses making their websites and turning into eCommerce giants. Warby Parker, for example, was set up a decade ago and got its unicorn horn shortly after by raising $245 million in funding to better cater to its customers. 

That said, let’s explore the DTC arena in detail and learn how to best scale your DTC business in the upcoming year.

Buzz Around the DTC Model

Running a DTC business is not all peaches and roses. It comes with its own set of challenges. You have to take care of A to Z of the business, including marketing, sales, customer service, and shipping to god knows how many addresses. Does not sound appealing at all! However, this model is being adopted by big-name brands like PepsiCo and Kraft Heinz to improve their sales.

Several world-renowned brands like Nike, have been playing catch up ever since. They established customer service centers and experimented with their online retail stores to develop a rapport with their buyers. What’s more, Nike’s online sales grew by 36% in the first quarter of 2020, a goal they were estimating to accomplish by 2023.

Source – https://www.emarketer.com/content/d2c-brands-2022

This makes it quite clear that the shift towards DTC, especially through digital commerce, is here to stay. Let’s dive into how you scale your sales like these companies by implementing a DTC model.

Strategies to Scale Your DTC Business

Personalize DTC brand With the Help of Data

Focusing on data analytics is the first strategy that will help you scale your DTC business exponentially.

One can truly make the most of the absence of third-party intrusion.

Your business will get direct insights into the purchasing trends like top-selling products, the busiest time of the day, and the effect of express delivery.

You may scale your business on such data by promoting the best-selling products, having agile customer service during peak hours, and choosing an air freight service provider that expedites the deliveries.

You absolutely need to leverage the data to shape your future product development strategies if you want to stand out amongst the competition.

BarkBox has done a tremendous job of personalizing its DTC brand with the help of data. The brand is in the business with the sole purpose to make dogs happy, all around the world. They achieve this by humans that belong to these doggos about their likes, dislikes, allergies, and more. They, then curate a personalized subscription box every month based on a particular theme with their favorite treats, toys, and care products. Such an exemplary level of personalization would simply not be possible while collaborating with retailers.

Targeted Email Marketing

An online shopper’s mailbox can sometimes feel more like an Eiffel Tower on Valentine’s day! However, emails play a crucial role in developing a close relationship with a DTC customer. You can use strategies like uploading shoppable quizzes to collect data about users’ preferences and channel them into meaningful targeted emails.

Additionally, you have to churn out engaging content and not just promote your product. This is because your brand is directly in conversation with the customers. They would appreciate it if you monitored the frequency, toned down the promotion, and made them read something of interest instead.

Here’s how Beardbrand engages its inactive customers. In the example, the user had not visited the BeardBrands website for around three months and got the following email with the subject line “How Fast Can You Grow”. Rather than sending a product promotion or an offer, they intrigue the customer and reel them in an educational manner. Do not miss the brilliant Call To Action at the end!

Source – Beardbrand

Work for Social Cause to improve DTC brand image

Consumers love affiliating themselves with a purpose-driven brand. So much so that they are 4 to 6 times more likely to buy, defend, and champion your DTC brand if they are passionate about the cause that you are backing. This is especially true for the younger tech-savvy and socially conscious shoppers. They flock to purchase from a brand that projects the values that reflect their own.

Some of the elements that are factored in while purchasing from a DTC brand include efforts towards sustainable products and packaging, a strong stance on social justice and racial issues, along with their CSR activities.

For example, Warby Parkey, one of the first digital DTC brands, runs a campaign called “Buy a Pair, Give a Pair”. They support a lot of people with vision impairment but don’t have access to or cannot avail of corrective glasses. The best part about this campaign is that it helps encourage the users to buy a pair to further their cause. Turns out to be a great way to scale a business and support the community.

Gamification

Gamification is one method that D2C firms can use to differentiate themselves and attract new customers. Every person has a natural need to compete, be challenged, have fun, be rewarded, and reflect on others. Games and gamified engagement can satisfy these five natural inclinations.

Furthermore, people are driven and feel a positive ‘rush’ when they play games. Gamification in marketing simply combines these pleasant feelings with a topic or information about a product using game components and game concepts. Gamification is already widely employed in a number of situations across industries to entertain, engage, and educate audiences.

With the global gamification market expected to reach $37 billion by 2027, you should definitely think about incorporating this strategy into your plans. You can start small, experiment, and amplify what works. The following elements have been a popular choice amongst businesses in the US.

Source

In a Nutshell

In the current era, DTC brands prove to be a prominent and beneficial trend in retail. There are benefits and drawbacks to selling your items directly to consumers rather than through an intermediary distributor such as wholesalers or stores. There’s no questioning the value of building personal relationships with clients and being able to respond rapidly to their input. However, it necessitates juggling a great deal of technology and processes that are generally handled by distributors and/or merchants.