In a recent PwC Global Consumer Insights Survey, brand trust is cited as one of the top three factors that influence consumers’ buying decisions. Online, 8 out of 10 customers prefer to buy directly from the brand if given the option.
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If you’re a brand, these numbers should put your mind at ease. But they only tell half the story.
Another look at the industry reveals that 72% of customers are not fully satisfied with the shopping experience offered by their favorite brands, while companies increasingly come under scrutiny from consumers. In the US, trust in businesses dropped to 48% in 2018, 10 points down from last year, suggesting consumers hold brands to ever higher standards.
So how can brands fix declining consumer trust and build lasting customer relationships?
Direct to consumer – the key to success?
Interestingly enough, brands with a direct to consumer model are in prime position to consolidate that trust.
On the one hand, the rise of social networking triggered an amplification of customer touchpoints and, coincidently, data sources.
Consumers now use social media to discover and shop new products (Instagram’s shopping stories are just one example), making it easier for brands – particularly emerging ones – to get in front of customers and better understand behaviors and preferences.
Secondly, consumption patterns evolve continually. Consumers are increasingly attracted by shopping experiences that are innovative and unique, which traditional retail is striving to keep up with. IAB’s brand economy study shows Gillette’s men’s razor business position is declining to the advantage of new, disruptive business models, such as Dollar Shave Club.
In this particular market, Harry’s is one example of a direct to consumer brand that used simplicity, product line downscaling, and candid messaging to attract customers and win market share over the incumbent brand.
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To find the benefits of direct to consumer operating models we don’t have to search too far. For consumers, they translate into lower prices, increased transparency and peace of mind when it comes to product quality and authenticity.
For brands, the gains are even greater. They span higher margins when third parties are removed, better inventory management, and more efficient production planning. But the greatest of them all is firsthand access to data and customer analytics.
For direct to consumer brands, data drives content
Marketers already rely on troves of data – ranging from keyword trends and industry-specific metrics to website behavior insights – that can be successfully used in their content strategies.
Direct to consumer brands can leverage the added value of direct, personal customer interactions which generate data about shopping behavior, product preferences, or customer interests.
When putting all this data together, brands get a deeper understanding of the customer which can drive their decisions about:
- channels that are most likely to drive conversion,
- engaging types of content (educational, informational, or inspirational) depending on customers’ buying stage and intent, and
- most effective delivery formats (blogs, infographics, video ads, social media, etc)
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Direct to consumer brands who use data to truly understand their customers can go beyond the traditional content marketing approach to provide a superior customer experience that results in higher conversion.
It is the case of the Honest Company, who, in an effort to support parents concerned about the products they use every day, used their blog to build a valuable resource to educate customers on the composition of such products.
Reaping the benefits of direct to consumer models
Direct to consumer approaches are very fertile ground for established as well as emerging brands. Such an operating model gives them a level of control over the customer journey that traditional retail wouldn’t be able to provide.
“When thinking about working with retail partners, we are admittedly hesitant to give up control. We started as a direct to consumer brand, by athletes for athletes, and have been rewarded for our attention to customer experience with loyal, repeat customers”, ROKA CEO and Co-Founder Rob Canales says.
A direct relationship matters not just through the lens of building customer perception of the brand. It also enables brands to build a one-to-one communication channel with the customer, personalize services and products, and create engagement for the long-term.
It also allows brands to understand their customers based on more than demographic and past purchase behavioral data, and bring personal values, experience, and expectations into the equation.
Brands that opt for direct to consumer operations – and there’s more than a couple out there – are in top spot for winning customer confidence and differentiating in times of mounting competition from both retailers and new brands.
Consumer Products Company Improves Direct to Consumer Sales with Data-driven Content
Knexus is an AI decision engine that offers brands a single, virtual content view and matches it with customer data to deliver 1-to-1 content experiences in real-time and on any digital channel.