Direct-to-consumer brands are at a crossroads. Three years after online shopping spiked as a result of global shutdowns, D2C brands are now left wondering how to stand out amongst the noise and continue providing value to the consumer. A whopping 91% of shoppers would abandon an online retailer over a poor shopping experience. How does a D2C brand ensure that their brand experience hits the mark?
The answer is personalization. Having a strong strategy for D2C marketing personalization increases brand loyalty. Your brand’s image will become increasingly important as you set off to personalize the shopping experience. Consumers want to trust the brands that they are sharing data with, and know that their data will be used ethically to add convenience and delight to the shopping experience.
What is D2C marketing?
Direct-to-consumer marketing is an opportunity to interact with and sell to your consumers without a wholesale retailer acting in the middle. This allows you to have full control over your brand experience and gives you the opportunity to improve from direct customer feedback. It also gives you direct access to customer communications and data, from discovery to purchase and every touchpoint in between.
Before the COVID-19 pandemic, many CPG companies and larger brands were distribution-driven, relying on wholesalers to reach their consumers. Only smaller e-commerce brands used direct-to-consumer channels. In the past, only these smaller brands benefited from the data and feedback that D2C marketing afforded them.
Today, D2C sales, including established brands and digital natives, are estimated to reach $182.6 billion in 2023. This represents an increase of more than 36% from 2020 - 2022. If we think about the benefits of D2C marketing, it’s clear that this estimated increase will propel retail and e-commerce forward into the next level of consumer experience.
That next level is 1:1 personalization for every consumer. Here, we have a ‘chicken-or-egg’ moment: personalization is needed to build out a stellar direct-to-consumer experience. But D2C marketing is needed to collect the types of detailed data that enables effective personalization. As you can see, personalization and direct-to-consumer marketing go hand in hand, and both are necessary to create the unforgettable brand experiences that win over and retain customers.
How can D2C brands personalize the shopping experience?
Collect first-party data: Many brands adopt a direct-to-consumer approach because they feel disconnected from the customers they wish to serve. D2C marketing cuts out the middleman and opens a direct line of communication between brands and consumers. Make this opportunity count by collecting and analyzing robust first-party data on your consumers, through conducting surveys and studying testimonials or simply observing their shopping and research behavior. First-party data lends itself to true personalization by giving brands an unfiltered view of consumer behavior.
Provide highly relevant content and recommendations: Once you have a full picture of consumer preferences and behavior, you can push them the content and recommendations that are most likely to get them to convert. For example, let’s say you own a direct-to-consumer bakery with a fully-fledged online store. Knowing that your consumer, Betty, likes to do some baking on her own, you can send her recipes and product recommendations for equipment that will get her started on her hobby while keeping your brand top-of-mind.
Leverage artificial intelligence: Collecting in-depth data on every consumer can quickly become an overwhelming task—not to mention the part where you create actionable insights and create campaigns that appeal to individual consumers. Whereas one customer may respond to content and product recommendations, another might prefer a promotional offer. An AI marketing personalization engine can help you spot the difference. It can also help your marketing team sift through loads of consumer data and extract the insights that will produce the best results.
According to McKinsey, 71% of consumers expect companies to deliver personalized interactions. And 76% get frustrated when this doesn’t happen. With so many brands moving into direct-to-consumer strategies, it’s becoming increasingly easy for consumers to drop a brand they are dissatisfied with and find one that better suits their needs and preferences. Investing in D2C marketing personalization is an essential step to staying afloat in today’s oversaturated market.