Statistics show that 71% of apparel and accessory brands are now direct-to-consumer (DTC). Have you purchased from a DTC brand? Are you a DTC brand? What are the benefits of this operating model? Keep reading to learn more about the benefits of operating your business in this way.
Eliminate the Middleman
One of the reasons that DTC brands were created was to eliminate the middleman and the costs associated with not selling directly to the customer before. Instead of your supply chain being a long line, it can be shortened and made much simpler. Paying someone to get your product to your customer is a huge expense and leaves room for error to occur, after the order has left your hands.
Finding a reliable middleman was tough for a lot of businesses and now you no longer have to vet businesses to see if they would be a reliable partner for this operation.
Better Customer Service
When brands are DTC, they know exactly the reason a shipping order is held up or why a certain product is out of stock. When customers get to speak directly with the people sending the product, it enhances the customer service experience. Some companies that are not DTC will have third-party customer service that cannot directly answer most questions and complicates the experience for the customer.
When you have more control over customer service, you can keep a positive brand image a lot easier. The ability to respond to negative feedback can be instantaneous and the transparency will show through to customers that you care about them and their experience with your brand.
Brands Can Actually Build Relationships
When you aren’t dependent on retailers to sell your product, you get to know your customers better. No longer do you have to fight for shelf space or a well-placed rack for clothing at the front of a store. Talking to your customers and helping them make buying decisions can start and grow a relationship with them for years of loyalty to come. Since DTC businesses are not brick and mortar, customers may be hesitant to order without knowledge of how the product fits or certain features of it.
Brands Can Maintain Control
Your reputation is everything as a brand. Bad PR is the first thing to pop up in search results and negative comments always rise to the top. Being a DTC brand means that you have more control over this image that is portrayed of you. If they say the person on the phone was rude, that’s your employee. If someone says you should carry more color options, you can make those changes. You don’t have to send the dreaded email to your customer that you are having supply chain issues or that you have no idea where their order went.
Brands Can Partner to Grow
It can be difficult to grow DTC businesses. How do you find new customers when you aren’t in major retailers? Where do people hear about you? How do you achieve growth year after year?
One way is to find an angel investor. Pitch your brand to an investment group like The Chernin Group (TCG), a multi-stage investment firm that got its start by acquiring and operating direct-to-consumer brands in media and tech. A glance at their portfolio shows that they still invest in DTC companies such as Dadi, which specializes in direct-to-consumer male fertility testing.
More Product Options
When you are trying to carry your product in regional or national retailers, you have to be selective about your products. Only sending the best-selling colors or models of your product is how you maximize your sales in retail.
When you are DTC, you can afford to carry more models and more products because you are holding all of your inventory and not sending it out to several locations hoping it sells. If you get feedback that your customers would like to see a certain color, you can act quickly on this and offer it in your online store while the interest is high.
Share Your Story
When you are a DTC brand, there is a greater opportunity to share your story. Consumers love to connect with brands and feel like they are a part of something. Focusing on becoming great storytellers can result in you selling more products.
How does this happen? You build your brand through online strategy. Use the enormous popularity of video to drive interest to your brand. Instead of posting a 3 sentence testimonial on your website, have it recorded on video with excellent visual presentation. This is much more likely to resonate with the viewer and impress them that such nice things are being said about your brand.
Unfortunately, you don’t have many options for personalization in retail. You are dependent on whichever employee is working at the retailer that day to speak for your brand and hope they give the customer a personalized experience.
With a DTC model, you can add a personalized note or coupon that says thanks for your first purchase with our business or we hope you shop with us again soon. These handwritten notes could be the most personal shopping experience someone has ever had.
You can also personalize the shipping to serve as another advertisement for your business. Think of the life of a shipping box or bag. It travels on a shipping vehicle. Sits in a home for a while. Having a personalized shipping container can serve a unique channel to reach customers that see the package and want to learn more.
Why Is This Important?
Whether you are a business owner or a consumer, knowing the benefits of DTC is important. You can likely name brands that you already buy from that are a DTC model. Check out our website for more business operations articles like this one.