The pandemic-fuelled direct-to-consumer (DTC) trend as well as the shift towards online shopping has made direct-to-consumer e-commerce a norm in the last year, with its effects likely to remain even in a post-COVID world.
Global retailers such as Nike, Lululemon, and Chewy are just a few of many brands that have moved online as part of the global shift towards DTC which has resulted in a record-breaking surge in their online sales. This global shift towards DTC is unlikely to lose momentum with brands like Nike gunning for 50% digital engagement by 2022 after seeing its Nike SNKRS mobile commerce app hit $1 billion in revenue in 2020.
Besides these global, big-name brands, we are here to share with you some other noteworthy companies that have been making their mark in the e-commerce space.
Here are the top 5 DTC brands you should know!
From its humble beginnings as a beauty blog in 2010, this $1 billion unicorn beauty brand has nurtured a dedicated online community around the Glossier brand.
Much of Glossier’s success stems from its community’s user-generated content which showcases product reviews on their website, both good and bad, helping to enhance brand loyalty and trust. Glossier’s community-centered approach has helped to create a satisfying shopping experience for their customers.
Besides its strong community, Glossier has also built a smooth customer journey that seamlessly takes its fans from their social media to checkout, all while maintaining a coherent brand throughout the customer journey.
(Screenshots from Glossier’s Instagram account)
Homegrown brand based in the UK, Gymshark has built quite the reputation for being a fashion-fitness brand.
The combination between fitness and fashion quickly gained popularity among “fashion-conscious gym rats.” The fitness apparel brand also made sure to keep their customers within their community by refusing to sell on third-party retailers. Through engaging influencers (influencer marketing) to represent their products, Gymshark has managed to build a close-knitted community for their customers.
“We were watching fitness YouTubers at that time, so we decided to send some T-shirts, shorts, hoodies to them, not because we wanted anything, but because we thought it would be cool if they liked it,” said Ben Francis, Founder and Owner at Gymshark in an interview with Esquire.
Instead of sticking to social media, Gymshark also ensured to engage with their consumers through offline events; frequently hosted meetups and pop-up stores for consumers to meet with their favorite fitness influencers.
Their direct-to-consumer strategy stood out even more so during 2020. Despite gym closures, Gymshark made sure to remain relevant through the creation of “Homeshark” where they created content revolving around home workouts, nutrition, and mental wellbeing.
(Screenshots from Gymshark’s Instagram account)
Gymshark has definitely won over the hearts of many fitness fanatics through its direct-to-consumer strategies.
“What we’ve built is a community-led, purpose-driven, direct to consumer model,” says Francis.
“It’s where the future of brands will go. We’ve had some massive retailers put huge orders in front of us. We could be twice the business, but we said no every time, we feel like that model is outdated,” Francis shared in an interview with Esquire.
Warby Parker is an online retailer based in the US that sells prescription eyewear. The eyewear brand started off by directly selling to customers online before expanding into physical retail stores.
(Screenshots from Warby Parker’s Instagram account)
Warby Parker is uniquely positioned as they allow consumers to choose their glasses and try them on virtually before making a purchase. In addition to that, the brand also offers to send 5 frames for consumers to try on for free and return the ones they dislike.
Similar to other direct-to-consumer brands, influencer marketing seems to be a preferred option when it comes to direct marketing. The brand engaged with influencers to post videos and selfies of them trying on their products on social media.
BarkBox is a pet care brand that has over 1 million subscribers. Their key to success has been their emphasis on personalization.
Through their customer-first approach, BarkBox is able to create strong connections with their customers, making each customer feel special. To date, BarkBox has sent out over 120,000 unique BarkBox varieties, each personalized to the customer’s needs.
(Screenshots from BarkBox’s Instagram account)
The company’s unwavering dedication to providing the best experience for its millions of customers has catapulted them into reaching $375 million in annual revenue by September 2020.
Even though subscription-based services often experience customer attrition, BarkBox has seen no signs of decline as it boasts a 95% customer retention rate, even during the pandemic. This is likely due to its personalized service that has kept its customers engaged over the long haul.
German company HelloFresh is one of the most prominent subscriber-based meal-kit services at present.
The meal-kit arena is flooded with intense competition and high customer turnover. Despite these challenges, HelloFresh has managed to claw its way to the top to become the leading meal-kit service in the US, toppling rival Blue Apron. But how did they get to this point?
The key driver of HelloFresh’s success is its aggressive marketing strategy which has seen the company pour millions, and sometimes even more than one-third of their revenue into marketing annually. This has allowed them to garner a constant stream of new customers and outsell and outlast their competition.
(Screenshots from HelloFresh’s Instagram account)
One significant aspect of their ‘blitzkrieg’ marketing is how the company tapped into the full potential of influencer marketing, hiring thousands of influencers and micro-influencers across various platforms and genres, enticing potential customers with a unique promo code.
Besides influencers, HelloFresh has splurged on sponsorships with celebrities such as Mandy Moore and Jessica Alba to help build more momentum for their organic marketing efforts.
HelloFresh’s underdog story is indeed one to be studied by DTC marketers, where influencers, both big and small, can be utilized as an integral part of a brand’s marketing strategy.
Influencer marketing and direct-to-consumer
A common thread that runs through these different DTC brands is influencer marketing. Building a shared community for consumers through brand ambassadors seems to be an effective way in engaging consumers and building brand loyalty.
Now that more brands are shifting towards direct-to-consumer, what does that mean for marketplaces and third-party retailers? Keep a lookout on our upcoming study as we dive into this issue next. Don’t miss any of our latest insights by signing up as a member or following us on our LinkedIn page!