The pandemic caused major waves throughout the ecommerce landscape, many of which have shown staying power, including the growth of DTC or direct-to-consumer trends. DTC brands experienced over a 45% increase from 2019 to 2020, and DTC sales are projected to reach $175 billion by 2023.
Ecommerce brands are seeking ways to connect directly with their customers and maintain control over the entire customer experience. In return, they receive valuable data and insights to show what is and isn’t working as they plan for the future. Even traditional brands in the retail industry can’t ignore this surge in the success of the DTC model and want to make sure they benefit as well.
What are the most prevalent DTC trends today?
Customization and convenience are two of the biggest factors driving direct-to-consumer ecommerce trends. Consumers want personalization when it comes to both products and shipping from brands that align with their values and deliver consistently exceptional buying experiences. Therefore, ecommerce companies must shape their strategies to meet these rising demands.
1. Increased collaboration between brands
Two is often better than one when brands collaborate with purpose. By honing in on a shared target audience and delivering complementary products that aren’t competitive with each other, retailers can cash in on double the marketing exposure and reach. It’s also an opportunity for brands to test new products on a niche audience before going all-in on a complete product line expansion.
To make this ecommerce trend effective, brands must perform due diligence in personalizing the DTC experience for customers. A prime example of a brand that has implemented a successful direct-to-consumer strategy is Gravity Blankets whose brand partnerships make up nearly 20% of its total revenue. The company has launched co-branded campaigns with everyone from Pizza Hut to Objective to present its products as part of a lifestyle versus a one-off purchase.
2. Expansion into new product categories
Due to increased competition in the DTC space, brands are diversifying their product offerings to reach a wider scope of consumers. Two methods of achieving this are personalization by color, size, and material as applicable to existing products.
And, secondly, brands are introducing new product offerings to complement their existing customer favorites. A popular example of this is the bed-in-a-box company, Casper, a DTC brand that already conquered the space before extending its product line into bedding, CBD gummies, and other sleep-related products to keep customers interested and engaged.2
3. Relaunch of subscription-based products and services
Subscription-based products and services are one of the winning direct-to-consumer ecommerce trends to not only survive but thrive during the pandemic. What once was a supplemental strategy to increase customer retention for specialty items and offer a sense of exclusivity for brand loyalists has become the norm. Financial predictions reveal subscriptions will equal $1.5 trillion by 2025, which is more than double the current estimated worth.3
As a revived retail trend of the past, ecommerce companies are reconfiguring how to package their items in ways that delight their customers and increase brand loyalty, while still benefiting their bottom line. The concept delivers on convenience and customization. Now, it’s up to brands to get creative with product packaging and entice subscriptions through early product selections, all while delivering high-quality value month after month.
4. Rise of social commerce
Social commerce is one of the fast-growing d2c brand trends. In a few years, it’ll likely change from an of-the-moment trend to a long-term foundational strategy. In the U.S. alone, social commerce is expected to become nearly an $80 billion industry by 2025.4
By building brand awareness and capturing the attention of the billions of potential shoppers flocking to social media channels every month, it only makes sense for brands to connect with consumers where they are. Brands must create an inviting, seamless shopping experience straight from social media platforms that allow consumers to make a purchase without ever leaving the site. One-click checkouts, easy autopayments, and AI-driven product customization are all part of what will boost consumer sales and make social commerce a sustainable success.
5. Flexible payment opportunities
DTC brands have opened up payment options for consumers. Using a physical credit/debit card or cash is quickly becoming a thing of the past. Between Google Checkout, Apple Pay, and Venmo, it’s easier to pay for a shopping experience with a simple tap of the phone or scan of a QR code.
Additionally, many ecommerce retailers are offering flexible on-the-spot “financing” that doesn’t involve being approved for credit. Instead, it offers consumers a breakdown of smaller payments for larger-priced items. With well over half of cart abandonment due to a too-high purchase price, brands incentivize cart completion with a “buy now, pay later” offer.5
How can DTC brands tap into these retail trends?
Each of these direct-to-consumer trends helps boost sales and prevent brands from operating at a loss as they introduce new products or when they experience a dip in revenue. DTC brands succeed when they use technology to glean valuable insights about where their customers are shopping, product trends, and the reliability of their supply chain and order fulfillment operations.
Many traditional retailers are focusing on how to find the balance between selling through a wholesaler and DTC. They’re assessing which areas perform best so they can also maintain their supplier relationships during this transitional time. They’re not abandoning their old business models but rather evolving them to accommodate for the future.
How can brands streamline the order fulfillment process to account for predicted ecommerce growth?
Omnichannel retail fulfillment plays an important part in promoting ecommerce sales growth. Since today’s customer experience may start with one shopping channel but be completed with another, brands must have all digital platforms interconnected to accurately track inventory and sales. It ensures a positive customer experience by eliminating out-of-stocks and improves inventory management to prevent surpluses and additional holding costs.
Stay flexible in a rapidly-growing space
Traditional retail is changing course by the minute as ecommerce reaches toward the preferred shopping experience. Today’s consumer wants personalized products curated to their lifestyle, values, and buying preferences. Retail brands that can’t keep up with demand will only be left with empty shopping carts.
Flowspace technology provides fulfillment solutions that help ecommerce brands keep up and excel beyond their competition. With seamless integration of all online stores and platforms, in addition to real-time visibility and predictive analytics tools, brands can make real-time, data-driven decisions that keep them connected to what customers really want.
Learn more about how Flowspace can help you succeed in the DTC space. Contact us today.
Sources:
- eMarketer. Direct-to-Consumer. https://www.emarketer.com/topics/category/direct-to-consumer
- Built In. All You Need to Know About Direct-to-Consumer Brands (With 27 DTC Examples). https://builtin.com/marketing/direct-to-consumer-brands
- Washington Post. Everything’s becoming a subscription, and the pandemic is partly to blame. https://www.washingtonpost.com/business/2021/06/01/subscription-boom-pandemic/
- Insider Intelligence. Social Commerce 2022: Social media and ecommerce convergence trends bring growth opportunity for brands. https://www.insiderintelligence.com/insights/social-commerce-brand-trends-marketing-strategies/
- Yotpo. Buy Now, Pay Later: The Benefits of Offering Flexible Payments. https://www.yotpo.com/ecommerce-product-page-guide/flexible-payment/
- Modern Retail. DTC Briefing: Partnerships are becoming a consistent part of startups’ marketing playbooks. https://www.modernretail.co/startups/dtc-briefing-partnerships-are-becoming-a-consistent-part-of-startups-marketing-playbooks/
Written By:
Allison Champion
Allison Champion leads marketing communication at Flowspace, where she works to develop content that addresses the unique challenges facing modern brands in omnichannel eCommerce. She has more than a decade of experience in content development and marketing.
