DTCs are Growing Up and Changing the Rules

The retailers CPGs and consumers have been captivated by these companiesamp160 The products are innovative and solve problems for customersamp160 Their backstories are inspiring and usually include a social mission that appeals to shoppers particularly younger onesamp160 And the brand promise of offering a higher quality product at lower prices thanks to a more efficient sales model that cuts out layers of costs promises a compelling value propositionAt the recent Forrester marketing conference held in New York April 13 Beyond the DirecttoConsumer Revolution organizers posed the questionamp160 Are we at peak DTC yetamp160 The answer wasamp160overwhelmingly quotnoquotamp160 DTC is more important to the CPG landscape than ever but the definition is evolving as the trend growsStrictly speaking a DTC brand is one that sells directly to consumers onlineamp160 Early on they were termed disruptors and the moniker has stuckamp160 Casper Mattresses Glossier and Warby Parker are among the best known but it39s quite likely that there39s a DTC challenger or 20 in every consumer product categoryAnd now CPGs are changing how they viewamp160not only these challengers but even the term itselfLegacy Brands Go DTC An entirely new kind of retail model is emerging around the DTC phenomenonamp160 The term DTC is now being applied far more liberally than to just digital nativesamp160 Wellestablished legacy brands are talking about going directtoconsumers in ways that require new marketing messaging platforms and product developmentamp160 They are breaking away from traditional methodsCoty39s Covergirlamp160has a standalone store in New York39s Times Square and launched a website for DTC salesamp160 Fender Stratocaster a 55yearold brand is solving its customer retention problems by going DTC with personalized products that have proven popular with women the fastestgrowing customer base that also dislikes the instore experienceMcDonald39s is talking about DTC in terms of how they speak to or identify customersamp160 It recently purchased personalization technology companyamp160 Dynamic Yield for 300 million to do just thatamp160 The technology will help them identify what customers are interacting with beyond the McDonald39s brandamp160 The quickserve chain launched a mobile app just four years ago and this was the brand39s first attempt to connect directly to the customer which is how McDonald39s is interpreting DTCEstablished brands are also investing in DTCs financially or creating brand incubators and innovation centersData Is the DTC Currency Data is what builds and drives DTCamp160 Digitally native brands are datafirstamp160 They develop algorithms mine customer information and leverage AI and machine learning to finetune marketing and develop new productsamp160 It39s also the bargaining chip something DTCs bring to the negotiation table in partnership and acquisition talksFoot Locker in February invested 125 million in Rockets of Awesome a DTC brand dealing in kids39 apparel founded by Rachel Blumenthal spouse of Warby Parker cofounder Neil Blumenthalamp160 Foot Locker has been investing in startups of late and one of the attractions is the data and technology these DTCs offeramp160 quotA nimble environment machine learning data amp8230 these are all things we can sharequot Blumenthal saidquotDTC brands are built on the bedrock of data to create highly tailored highly functional solutionsquot according to Forrester39s Dipanjan Chatterjee Vice President and Principal Analystamp160amp160Are DTC39s reaching critical massamp160 Not even close according to industry insidersamp160 Investors are lining up to fund these ventures legacy brands and large companies are investing in or acquiring them and new business models are being developed to serve and amplify the growing army of DTC brandsquotDTC will end up being a very significant part of the futurequot said Tim Armstrong former AOL and Verizon Oath CEO and current founder and CEO of The DTX Companyamp160 quotThere are so many companies you39ve never heard ofamp160 There isn39t a DTC ceilingquotThere are challenges and opportunitiesamp160ahead for DTCs and those that try to think like themClick the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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DTCs are Growing Up and Changing the Rules

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Laura Heller

FEMA and the Ad Council Encourage AANHPI Communities to Enhance Disaster Preparedness in New PSAs - Ad Council InSites

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DTCs are Growing Up and Changing the Rules

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