How do you know you’re truly a direct-to-consumer brand?
When you start thinking about Christmas in July.
Direct brands and their marketing teams spend a big chunk of every year thinking about Christmas; whether it’s your pre-peak planning meetings that start to ramp up in late summer, the high-intensity peak season or the annual headlong plunge into the January sales, Christmas is the crucial season for brands operating in Western markets.
But customers’ buying habits are shifting and your peak strategies need to change along with them. The biggest winners of the past 18 months are the brands with the best technological capacity and the ability to react instantly to changing customer demands. A closer look at McKinsey’s Super 25 (the 25 retail brands with the biggest combined retail share in the US) shows that small technological advantages translated into huge wins during lockdown and there’s no sign of that trend changing anytime soon.
What can other brands learn from this?
In truth, the change has been coming for a while so most brands are on the way to becoming digital-first and many ecommerce brands are there already. But just because you have a good grasp of your data and your tech stack doesn’t mean you can rest on your laurels; if you don’t stay agile, you’ll be left behind. After all, the consumer landscape is evolving all the time and digital transformation should be top of every brand’s priority list.
Customers and investors alike are flocking to digitally-adept brands, a shift that is resulting in monumental gains in brands’ real-time performance. Now that we've all have had time to get used to the new global status quo, your customers have different expectations of you. Adapting to these changing demands can be challenging but brands that focus intensely on delivering the best experience for their customers will come out on top, no matter what challenges or changes lie ahead.
But customer experience doesn’t just come down to speedy loading times on your website or a unique unboxing experience; as a brand you must be ready to serve customers across new channels and adapt quickly to different consumer behaviours. In the context of peak, that means starting your peak season earlier and being ready to react instantly with new, diverse offers based on channel and product performance.
What should you focus on?
As the leadership team in a D2C brand, it can feel like everything needs your attention all of the time. Urgent issues crop up and drag you into the day-to-day of trading, supply chain, and team management. But you owe it to your brand (and your team!) to avoid getting bogged down in too much detail and to keep the bigger picture front and centre instead. Coming into peak, that focus is more important than ever. At more2, we work with the senior teams at direct-to-consumer brands to help them identify the actions that will drive the best outcome for their business – and to deliver on those actions consistently.
Here are the top 5 actions that smart business leaders should focus on right now:
- Make your channels work together
No channel operates in a vacuum. If you have stores, your online channels will influence in- store buying and vice-versa and Direct Mail, affiliates, and good old-fashioned print media will drive online performance just as well as offline. For brands with stores, the traditional balance of profitability is changing: whereas stores have typically driven more profitable sales (larger average order value, higher loyalty and so on), this is changing as more customer cohorts embrace online channels. Equally, however, you need to keep up with the latest ecommerce trends and demands: instant delivery will help you to remain competitive and will bolster online profitability by increasing your average basket value.
For brands with a physical footprint, it’s critical that your online and offline channels are working in harmony with specific goals in mind: supporting store performance and helping your brand to stand out on the High Street, as well as keeping up with the expectations of customers accustomed to top-class delivery services. Your stores will have to work harder (and with less footfall) to remain profitable but there’s a wealth of opportunity in the future of the High Street. Identify your store-dominant customers and target them online with store-specific offers (new product drops, in-store events and special offers are a good starting point) to make them feel valued and build customer loyalty.
And when you’re really thinking about the big picture, consider what the store shopper of 2030 will expect. Hybrid-function stores? Home delivery? Virtual dressing rooms? Remember, it’s the ambitious brands who broke rank and offered an innovative, customer-first service who really succeeded in 2020. So be brave and keep innovating – your customers will thank you for it!
- Dive into your data capture
As the founder, owner or CEO, the customer is your responsibility. Everything you do should have a positive effect on your customers: how many you recruit, how you look after them, how you show them how important they are to your brand. Your data capture is a key component to your customer strategy – the more data you capture, the more potential customers you can market to and the more sales you can make. In short, you can never have too much data.
Your website traffic will increase during peak so now is the time to ensure that you’re capturing as much of the right data as you can. Make sure your teams are testing their data capture strategies and implementing the learnings quickly: try gamifying your sign-up process, offering better discounts or other incentives to prove to your customer that it’s worth their while to share their information with you.
- First impressions count
Once you’ve optimised your sign-up process and your marketing channels are working in harmony together, you’ll see an uplift in your new customer recruitment. Great – but what next? The first steps of your welcome programme are critical as it sets the tone for your customers’ relationship with you – and it’s too important to leave to anyone else.
Think about the reason behind your brand. Why does your brand exist? What problem do you solve? Why does that matter to your customer?
Spend your time communicating that message with your customer and share your story with them. We all love to connect with a story, that’s what makes you different to all the other brands competing for your customers’ attention. Share your story in a way that inspires action, builds an emotional connection and shows your customer how they benefit from being with you. You can do this using email, your website, a small gift or a simple thank you – what matters most is that you start to build that personal relationship with your customer are early as possible.
If you do one thing this week, make sure it’s this.
- Prioritise customer intent over customer cohort
Presuming you know something about your customers is the worst mistake you can make. It’s tempting to spend hours discussing customer cohorts, segmentation, and automation but this can run the risk of creating prescriptive assumptions about your customers.
This is the quickest way to lose customers.
Customer cohorts and segmentation have their place but intent is a greater indication of future buying behaviour than age, gender, or location will ever be. Listen to what your customer are telling you when they browse your website and set up omni-channel automations and triggers to respond to those tell-tale signs. Equally, keep a lookout for customers at risk of lapsing and enrol them in win-back programmes in time for peak – a good offer or intelligent product recommendation can be the difference between losing a customer for good and saving them from going cold.
- Stay agile
You’ve heard it before and you’ll hear it again: agility is key. Brands that innovate constantly are the ones that win and, as a leader, you need to be on the lookout for new ways to adapt your business to drive the right customer actions. Look at your competitors and listen to your team – they're the ones in the thick of daily trading and they’ll know what your customers are responding to. Be open to being challenged and ready to try new avenues – whether it’s adding a subscription offering, trialling new product lines or leaving the emotion at the door and getting rid of something that isn’t working, your ability to adapt and change when the business needs you to will help you to compete with the biggest brands out there.
This year’s peak will be different to anything we’ve gone through before. Although brands aren’t facing quite the same uncertainty as this time last year, the rate of change in the direct-to-consumer world is continuing apace and nobody can afford to take their foot off the pedal.
It can seem daunting (and exhausting) but ultimately the principles of a good D2C business still apply: focus on your customer, guide your team with empathy, and be ready to embrace the next opportunity when it presents itself.
We’ll have more insight and advice for peak trading over the coming weeks so keep an eye out for benchmarking, top tips and more! And if you’d like to talk to us about anything you’ve read here, get in touch below – we'd love to hear from you!