In this Q&A, DTC Daily talks to Sandra Loeffler, regional vice president of sales for Nielsen’s EMEA Marketing Effectiveness. She discusses how DTCs can measure effectiveness across multiple channels, what aspects of traditional retail models suit DTC, and Amazon’s role in the ecosystem.
What are today’s top marketing challenges for DTC brands?
Rapid growth has transformed the DTC market and adjusting to this shift is a challenge for many brands. Where once, low competition meant brands could drive awareness and win customers through social media alone, an influx of new players has changed the DTC game. As the popularity of direct buying has increased — with 70% of UK shoppers interested in DTC style subscriptions — so has competition. Breaking through now requires larger scale marketing that engages consumers across channels, and this requires higher investment.
As a result, success is becoming increasingly dependent on smarter decision-making. With no middle men to share revenue or split costs, DTC brands must ensure media spending choices are based on an accurate view of individual customers and the specific channels, tactics, and messages that effectively spark their attention, and drive results.
With such a complex consumer path to purchase, how can DTC brands maximise engagement and measure results across multiple channels?
With purchase paths spread across multiple screens and channels, DTC brands find themselves in a difficult position; they still hold responsibility for customer experience, but less control over a growing number of interactions. To ensure every touchpoint drives optimal satisfaction they need comprehensive data and a full view of the consumer journey, along with the means to analyse and act upon that data effectively.
Fortunately, there are a variety of solutions brands can use to harness data and build an all-encompassing measurement stack. For example, multi-touch attribution (MTA) taps user-level data from addressable channels to calculate the impact of each touchpoint; providing an accurate and granular view of what is or isn’t working. Meanwhile, marketing mix modelling (MMM) leverages aggregate-level data to generate a wider view of performance across all channels. By leveraging actionable insights from their marketing efforts as a whole, DTC brands can prioritise spending and tune up activity to maximise engagement.
Many DTC brands are digital natives – what advantages does this hold, and how can they benefit from leveraging ‘traditional’ business models and channels?
The internet has provided an affordable entry point for countless DTC brands. Selling exclusively online has allowed startups to gain a foothold while avoiding reliance on stores and the expenses they bring. But digital alone isn’t enough to drive sustainable growth: brands need a broader range of exposure that includes digital and traditional offline retail. Having already built a strong presence online, DTC players are well placed to extend their businesses into the real world and reap the rewards of a combined omni-channel model that unifies e-commerce and conventional stores to maximise engagement and revenue.
How can DTC businesses benefit from the convergence of bricks-and-mortar retail and e-commerce?
Traditional stores still play an important part in the shopping mix. In fact, research shows 85% of UK shoppers still prefer to make purchases in physical stores and a further 94% research items offline before buying in store. Ultimately, success will be attained by gaining a deep understanding of consumers and meeting their unique needs through relevant, omnichannel experiences that empower consumer choice. This is why global DTC brands such as Casper have extended their operations offline and British players are following suit; including Made.com with its recent pop-up showroom in Stockholm.
In the “Amazon’ era, what tactics can DTC brands employ to stand out and measure success?
The unique nature of DTC companies remains their best asset. In a world of infinite choice, consumers are drawn to unique brands that align with their individual values and offer a more personal kind of shopping. But outpacing rival firms and large corporations with deep discounting ability such as Amazon is getting harder. If independent organisations are to stand out and stay in business, they must play to their strengths instead of trying to compete on the basis of price and service add-ons.
This means putting more focus on understanding the impact of creative. Consumers are becoming much more selective about the brands they buy from based on the values they represent and the context in which those ads appear. Earning their business will mean rethinking traditional value propositions, being more daring with creative, and living up to the values they represent. Libresse’s Viva la Vulva campaign is a great example of a brand that’s embracing this approach to much success. The campaign celebrates femininity after decades of feminine product ads that peddled shame and discomfort around a woman’s period – and it’s been universally embraced by women.
When rolling new ad creative, lift analyses can provide DTC brands with powerful insights into the incremental impact on sales. Sales impact is measured by analysing changes in consumer purchase behaviours – such as average spend, purchase frequency and more – for buyers who were exposed to a campaign versus those who were not. With insights into the consumer segments and campaign elements that are driving the greatest response, DTC brands can maximise the revenue outcome of their campaigns.