Direct-to-consumer retailing is becoming ever more prominent, and recent years have seen success stories from start-ups that have used the business model to their advantage. But exactly what factors have made these direct-to-consumer brands successful in spite of competition from established rivals operating more traditional business models?
Convenience is what the traditional established retailers have as an advantage – high-street shops that stock a selection of brands or online marketplace sites such as eBay and Amazon. But there is no need for small independent companies to try and fight them on this battleground. Instead, what really counts when it comes to the success of a direct-to-consumer brand is the customer experience itself. If a customer needs to quickly purchase something without much care for the experience – replacing a broken lightbulb, for a particularly dull example – then the likelihood is that they will rely upon the traditional shops and marketplaces.
But when a customer wants to have a more personal retail experience and to feel valued by the company they are buying from, that’s where the direct-to-consumer model comes into its own. A particular shining star of the DTC constellation has been the Dollar Shave Club, a service that sends out boxes of shaving equipment and grooming products every month to its subscribers. The combination of high calibre products and a gift-like method of delivery has propelled the Dollar Shave Club to the heights of being bought by cosmetics behemoth Unilever in 2016. Other similar success stories have sprung up since, with ever-increasing numbers of these streamlined and small-scale outfits garnering a loyal customer base before being purchased by a larger company.
The growing number of DTC brands across industries – whether a physical storefront, online retailer or subscription service – has shown that customer service and experience combined with a quality product is a strategy that can see small modern start-ups taking the fight to the giants of the industry. The convenience of online and high-street retailers is still very useful to consumers, but the way in which many DTC brands make customers feel valued means that there are likely to be many more direct-to-consumer success stories in the near future.
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