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Why now is the perfect time to plan for DTC.

| 8 minute read | By Mark Steel
‘Why DTC Faces Serious Challenges In 2022’ laments the headline from a Forbes article at the beginning of 2022. Citing rising supply chain and marketing costs, the article points out that these spiralling costs are eating into growth for many DTC brands, making life increasingly uncomfortable.
Fast forward to the end of 2022 and the headline seems even more prophetic. Not only have costs continued to rise, but increased competition from an abundance of new brands, along with the resurgence of a post-pandemic physical retail sector, make it even more challenging for DTC brands to drive profitable growth.

Add to this a cost-of-living crisis putting pressure on disposable income plus global inflation and recessionary headwinds, and you’d be forgiven for thinking all is lost and maybe it’s time to reconsider DTC investments.

The reality couldn’t be further from the truth. So many great brands are continuing to grow and thrive in the DTC landscape; building communities of loyal followers, delivering fantastic branded experiences, and building sustainable, profitable business growth for the long term.

Take Nike (often hyped as the poster child for direct-to-consumer): Nike Brand Digital Sales rose by 16% in the last quarter, with a 46% increase in the EMEA region and double-digit growth in North America, offset by declines in the still lockdown troubled China market [1]. Incredible performance for an established, mature brand.

Not all brands have the luxury of Nike’s media budget, but despite this, many more DTC brands are experiencing strong growth.

Patch Plants offers greenery-loving consumers an easy route to find the perfect plant to fit just about any room space, and delivers directly to the doorstep.

Estimated web traffic to the online store is growing at over 120% quarter over quarter [2].

Plant-based meals brand Huel saw revenues top £100m last year [3] fuelled by growth in both the UK and internationally as demand for its nutritionally complete food continues to soar.

Himalayan spring-water-powered skincare brand Herbal Essentials is winning award after award for innovative new products that are finding an audience amongst consumers looking for all-natural, vegan cosmetics products.

The list of successful DTC brands is long and comprised of businesses big and small, from founder-led start-ups to global FMCGs. These brands prove beyond doubt that selling directly to consumers continues to offer a compelling opportunity for brands to successfully grow.

The benefits of DTC are clear and undeniable; offering brands the chance to build direct relationships with their consumers, gain insights and data to improve the product portfolio and personalise consumer experiences, and ultimately, drive profitable revenue growth in a channel that offers greater control and flexibility than the traditional routes of retail and marketplaces.

So, the benefits are clear, but the challenges are many…
  • How to drive stronger engagement and make marketing spend go further in a world of increasing cost of customer acquisition?
  • How to get access to the best talent in a fiercely competitive e-commerce market?
  • How to move at pace, test and learn to deliver new experiences quickly, and take advantage of emerging opportunities as they arise?
  • How to face into inflationary pressures in supply chain, logistics and fulfilment without compromising the consumer experience?
These challenges are often focused on the operational parts of delivering DTC and require skills and experience that don’t always exist inside a brand-led organisation.

The entrepreneurial spirit and eye for products that perhaps fuelled the initial growth of the brand don’t always lend themselves to driving growth in this challenging environment. Brand managers and founders alike want to focus more on the next exciting product and creative developments, rather than worrying about warehouse picking and despatch lists, or managing returns (and quite right too!)

One answer to this conundrum is to enlist partners to address the thorny challenges; bringing in expertise to complement the existing capability of the business and immediately benefitting from access to experience in these areas.

But even this isn’t without some challenges… the skills needed can range from media planning to warehouse management; web store optimisation, to handling customer queries. It is extremely difficult to find partners in every single area and this also introduces the new problem of managing multiple third parties (not to mention the costs involved in engaging so many different advisors).

One route that many brands are choosing is to find one end-to-end partner to provide a fully-managed, outsourced DTC solution. The concept is simple: spend more time developing your product assortment and brand story, whilst trusting a strategic partner to manage your digital commerce needs.

This is the foundation that Everymile was built on – we think of ourselves as your ‘in-house’ support, an extension of your team, and a trusted partner that cares passionately about delivering your brand’s commerce ambition.

A partnership with Everymile gives you access to everything you need to deliver strong DTC growth: the tech, the people, and the experience. Perhaps more importantly, Everymile allows you to shape the consumer experience at every step of the journey, from screen to doorstep, all wrapped up in an outcome-based partnership focused on growing your brand.

Regardless of the chosen route, facing into e-commerce headwinds is essential for any brand wanting to grow its consumer business. Whilst it won’t be easy, the upside is significant with more and more consumers engaging with brands directly, rather than through a traditional retail route.

Indeed, the majority of Gen Z and millennial consumers prefer buying directly from e-commerce brands, compared to marketplace platforms [4]. From that perspective, the future for brands selling directly to their customers looks particularly rosy.

DTC is flourishing, with more brands telling more stories to more consumers worldwide and reaping the significant rewards on offer. With the right support in place, there’s never been a better time to kick-start your DTC strategy.

Get in touch with the Everymile team here to talk through your DTC needs and how a partnership approach could help fuel your business growth for the future.

2. Upskill your team so they can embrace change

Having the right team and capabilities in place is invaluable to any business, and is especially critical in creating an ecommerce strategy that lasts in an ever-changing world. Although shopper behaviour continues to shift and evolve, in the past few years, companies have rarely changed the traditional roles of their teams or applied the right expertise to the right platforms.

Rather than search for new people to fill certain positions, it’s time for businesses to shake up these roles and utilise the talent that already lies in their existing teams.

A third-party agency can also help you upskill your employees in the interim, equipping staff with the relevant insight to drive the customer purchasing journey while you focus on the bigger picture.

3. Make your data actionable (and say “no” to siloes)

Most teams will have access to a wealth of Web analytics and data, but the key to success is being able to create actionable insights from the information you have.

The first step in achieving this is to identify your ideal customer journey profile. Who are the customers making the quickest route through your ecommerce site and making a purchase? And what are they engaging with?

Once you have the answers to these questions, you can share this data with the rest of your marketing team and optimise it into your business. Everyone involved must have access to these insights, eliminating any siloes.

Most importantly, remember that ecommerce is not just an online shop – it’s one area in which your customer engages, and an opportunity to use their interests and interactions to your benefit.

4. Get creative when you have less

With budgets being cut across many brands, implementing the right strategy may feel unachievable. But you can find innovative solutions and do more with less by partnering with an agency that helps you to analyse where in your business you may not be performing well and seeing what can be done to quickly fix it.

A good starting point is to look your website’s content. Is it geared towards Google’s algorithm? How can you use your internal team to make essential tech recommendations and optimise things like your page speed and load time? And what can you learn from post-purchase communications about which content your customers like the most?

Interestingly, organic traffic has increasingly been outpacing paid in the past few years, and those who have invested in the latter have ended up with slower turnaround (and less money!). Working with the right supplier can help you pinpoint where exactly your focus should be placed, ensuring your team invests its time—and finances—wisely.

5. You don’t have to be something to everyone

We’re often told a ‘new year’ calls for a ‘new you’, but there’s no need to change the essence of your brand, or to chase shiny, new objects to appeal to your customers.

However, you can be braver with your strategy and use different channels to reach them—as long as your message is consistent.

Personalised content can help immensely with your business’s success, allowing you to target your ideal customer profile. Don’t be afraid to test what works best, and use humour to engage with your audiences, conveying your brand’s tone of voice and personality in the process.

While customer purchases will be very considered this year, and you may be competing more with businesses offering better prices and discounts, you needn’t spread yourself thin or try to be something to everyone—you just need to resonate with the people that matter to you.

Prepare for success

After a few turbulent years, 2023 certainly won’t be without its challenges. But come prepared and you’ll be able to boost customer engagement, have a stronger team, and ultimately, improve your bottom line.

And that’s not a trend…that’s just good business!

Find out how we can help your brand deliver more by talking to our team