Introduction Reasons for D2C Growth of D2C Retail/D2C Differences The power of insights D2C strategy Unique D2C tactics Request a Demo
Get the complete guide

The Informative Guide To Direct-to-consumer Marketing

Considering going direct-to-consumer (D2C)? Don’t follow traditional retail tactics. Mapp & VTEX have compiled the must-read differences and opportunities for D2C marketing.

Direct-to-consumer (D2C)

This rapidly growing channel is popular among emerging manufacturers and retailers shifting sales models. Profit margin was one of the original reasons, but now brands can see the value and profitability in owning and creating authentic customer experiences.

Traditional Retail

The retail channel provides wider consumer reach and allows manufacturers to focus on one thing – just the manufacturing. The supply chain is a long and expensive journey from product idea to a product in consumer homes, requiring a variety of expertise.

New Reasons For Shifting To D2C

Many brands have been dipping their toes in the D2C world, with the primary driving force being a declining margin through the retail channel. However, these newer reasons are validating a second wave moving to the D2C model.

Lower eCommerce technology barriers

More accessible logistic processes

Focus on values and ethics

The growth of D2C

D2C brands are anticipated to grow, but it’s not a new concept. The foundations of commerce started directly between the producers and consumers, and has evolved over time.


According to :



As a result of the COVID-19 pandemic, brands of all kinds are looking to shore up their own direct-to-consumer (D2C) efforts as more consumers seek authentic and engaging brand relationships in increasingly digital spaces.



10 differences between retail and D2C channels

There are several key differentiators that D2C brands should focus on that can positively influence the experiences that a direct-to-consumer relationship can offer. We highlight the 10 core differences and opportunities for manufacturers to consider.



Consumer Reach
Retail

Provides instant access to a wide reach of prospective customers that are already interested in the product category and want a low barrier to transacting.

D2C

Emerging brands often start from scratch. But they have a unique position to start building an audience prior to selling product, even including them in design.

Values & Ethics
Retail

Ethics and values might be important, but it’s hard to guarantee that the manufacturing processes for all goods sold live up to the same high standard.

D2C

Owning the supply chain allows full control of ethical principles. The focus on values can create exceptional experiences, connecting on emotional levels.

Consumer relationships
Retail

Builds credibility of new products but maintains the relationship. Often sells competitive brands or launches their own private label at a lower cost to retain customers.

D2C

This is the Holy Grail – the direct relationship with consumers. D2C enables authentic experiences with the brand, nurturing, and personalized moments to upsell.

Innovation
Retail

Requires commitments to larger production batches, which delays getting feedback and insights on how the product can be tweaked to increase customer satisfaction.

D2C

Direct access to consumers and their immediate feedback provides greater flexibility to tweak product design or formula, and test small batches.

Pricing models
Retail

Price is often dictated. Options to provide brand-specific vouchers in joint campaigns with the retailer may occur. Manufacturer rebates are tedious and not immediate.

D2C

More flexibility in pricing, refund policies, and offers like “try before you buy.” Subscriptions are common, allowing consumers to schedule regular deliveries.

Profit margin
Retail

Takes a significant proportion of margin, allowing economies of scale throughout the supply chain, marketing, and distribution which facilitates greater reach.

DTC

Lower margin is not a given, but there is an opportunity to save significant proportion of margin by cutting out the middleman from the supply chain.

Loyalty
Retail

Creates an inherent gap in ability to connect transactions and loyalty to individual consumers, making it hard for manufacturers to recognize or reward.

DTC

Every transaction can be attributed to an individual, providing frictionless customer loyalty and reducing brands’ reliance on discounts.

Branding & Packaging
Retail

Meeting the specifications of the retailer and standing out on shelves can result in excessive packaging and placing a huge priority on branding.

DTC

Packaging can be simplified (even recycled) allowing more focus on the overall brand experience and product quality, rather than visual differentiation.

Variety of Choice
Retail

Provides a variety of choice for a variety of goods. But consumers love low prices and home delivery, giving rise to Google and Amazon, diminishing retail success.

DTC

Consumers’ resistance to buy from manufacturers directly is a barrier. There is an opportunity to sell niche and exclusive products; choice is moot point.

Insights & Data
Retail

Retailers have market insights based on product sales data and consumer data, giving an advantage to forecast demand and define pricing strategy.

DTC

With direct consumer data, manufacturers can gain insights on why customers buy from them and discover new products that capitalize on consumer preferences.

Unlock the rest of the D2C guide

Get the rest of the informative guide by providing your details. We’ll also email you a copy of the complete PDF.

Harnessing the power of customer insights in D2C

Customer insights for D2C can revolutionize the way you power your marketing. Getting the right information on how your existing, new, and potential customers are behaving will be critical to shaping your CX strategy.

  • Find easy ways to identify and segment your audience, such as which shoppers come for convenience, price, or that direct connection with your brand.

  • If you don’t have access to analytics teams that can pull rich insights from your data, invest in a platform that can generate insights for the marketing and eCommerce teams, without the need for special training or knowledge.

  • Research from Accenture shows that 91% of consumers say they are likely to shop with brands that recognize, remember, and provide them with relevant offers and recommendations.

Customer behaviors are always changing, and being able to understand our customers’ buying habits across all physical and digital touch points is really important to PepsiCo. Going Direct-to-Consumer allows PepsiCo to drive market leading marketing campaigns and ensure our customers always receive the best brand experience.

Jeroen Heslenfeld, Head of Unwasted at PepsiCo

Create a CX strategy for D2C

Since D2C cuts out much of the supply chain compared to traditional retail, you’re left with a significant boost in responsibility over your customer experience (CX) strategy. As a D2C marketer, you’ll have total, or nearly total, control over your CX strategy. That control enables you to truly know your customer and deliver exceptional experiences. Here are the 4 steps of a customer journey, and the strategy you can use to improve your marketing.

Bringing new customers is essential for any business. For D2C brands, a lot of the acquisition comes from awareness – often customers may not know they can purchase directly from you. The goal is to set up an acquisition strategy that will allow your company to automatically attract and convert new customers to maintain a healthy bottom line. Some examples of marketing tactics for this stage of the customer journey include:

  • Welcome email sequence
  • Product registration
  • Competitions

Getting the second purchase is an important step towards becoming a high-value customer, moving prospects through the funnel until they become repeat buyers. Now is the time to build a relationship with your company, engaging them with relevant information. For D2C brands with complex services/products, or even subscription models, it’s critical to use this stage to educate your customers. Some examples of marketing tactics for this stage include:

  • How-to content
  • First purchase nurture
  • “In-the-moment” triggers

Existing customers require and, more importantly, deserve preferential treatment to show that your company values them, particularly in the D2C world. This will create a predictable revenue stream and prevent customers from engaging with your competitors. So, it’s your job to help customers see the value of your product or service to encourage their continued business with you. Some examples of marketing tactics for this stage include:

  • Focusing on newsletter engagement
  • Website personalization
  • Invite a friend
  • Shopping cart top-up

You can’t focus most of your marketing efforts on acquiring new customers. Increasing customer retention rates by 5% increases profits by 25% to 95%. The goal is to turn one- or two-time purchasers into loyal fans who will act as advocates for your brand. The magic bullet here is the customer experience; a positive experience is guaranteed to boost retention. Some examples of marketing tactics for this stage include:

  • Churn prevention
  • User-generated content

Marketing tactics unique to D2C



TACTIC 1
Product Customization

Allow consumers to personalize and customize the product or its packaging – it’s a sure-fire way to develop a personal connection with your customer.

Example: Wild Deodorant

Wild makes sustainable natural deodorant delivered straight to your door. Customers get to personalize their reusable case, choose their scent, and set their delivery frequency.

TACTIC 2
Customer Feedback

Encourage customers to provide direct feedback about recently purchased products. D2C brands can quickly respond and/or incorporate that feedback, improving the CX.

Example: Bose

Many brands don’t check in with their customers post-purchase. Bose, on the other hand, sends surveys to their customers after they’ve had time to use their products to find out how satisfied they are, and more importantly, why.

TACTIC 3
Pop-Up Stores

Take advantage of available low-cost and low commitment pop-up venues to build awareness and test selling in different physical locations and geographies.

Example: Pernod Ricard

Spirits and Wine distributor Pernod Ricard launched a 4-month concept pop-up store to build awareness of their new direct-to-consumer channel. Every month the space was transformed into different experiences for customers.

TACTIC 4
Behind-the-Scenes Content

Share content featuring product design & production. It shows greater transparency and allows customers to interact with people directly manufacturing their product.

Example: Le Slip Français

Le Slip Français wants to change fashion by manufacturing “all of your clothing within 250km of your home.” And they share how they do it with behind-the-scenes content about their manufacturing process on social media.

TACTIC 5
Pre-Orders

Allows you to predict demand, provides insights for manufacturing, enables launch-ing new products with little-to-no media spend, and is an important part of the CX.

Example: Mrs. R’ganics

Mrs R’ganics allows customers to pre-order skincare products. They promote that their products are “Handmade in small, fresh batches” which decreases wastage and allows for more efficient planning in their manufacturing process.

TACTIC 6
Crowd Funding

Crowd funding is useful for funding a new product, but also extremely valuable to test the market and build a loyal fan base before starting the manufacturing process.

Example: Bird & Blend Tea Co.

As an eco-friendly Tea Mixology company, Bird & Blend Tea raised nearly £1M from over 1700 investors through Crowdfunding to grow their omnichannel brand and deliver impactful social initiatives.

TACTIC 7
Leverage Amazon

Amazon gets your brand discovered but compares your product to other brands. Use product inserts & interactive packaging to drive subsequent purchases on your own D2C channel.

Example: Munchkin. Inc.

Munchkin’s UK site takes customers to Amazon to complete their purchases. This allows Amazon to fulfill payment, shipping, and delivery on their behalf, and lets new customers find their brand and products while shopping on Amazon.

TACTIC 8
Sponsorships

The right type of sponsorship allows brands to partner up based on common values & interests, ultimately expanding reach and aligning with causes that customers like.

Example: ROKiT Phones

ROKiT has found a ton of success sponsoring sport clubs & personalities in key markets, generating more awareness than paid media and advertising. Their commitment to promoting women in sport also speaks volumes compared to standard OTT advertising campaigns.

TACTIC 9
Interactive Packaging

Increase engagement with packaging that customers can physically interact with or by providing QR codes or VR experiences that lead to interactivity (e.g. gamification).

Example: Brita Filters

Brita uses their packaging and inside the box marketing to encourage customers to register their product. Once registered, they’ve captured their direct customers’ information and can nurture the relationship.

TACTIC 10
Focus on Core Values

Differentiate your brand and build a customer base by standing behind your values & ethics. It’s hard for retailers to do that when multiple vendors are in the supply chain.

Example: ECOALF

Despite creating beautifully designed fashion products, ECOALF leads with their sustainability values first, with the goal of always doing the least harm possible to the planet and local communities.

See how Martech helps D2C brands

Congrats on reading all the way to this point. You must be really interested in Direct-to-Consumer Marketing. We invite you to see how Mapp helps D2C brands generate customer insights and deliver exceptional customer experiences.

Request a personalized demo

Some other resources

We have emailed you the complete Guide to Direct-to-Consumer Marketing, brought to you by and . It goes into way more detail about everything, so enjoy!

If you are an existing D2C brand or manufacturer in process of designing your D2C strategy, try out Mapp’s D2C strategy blueprint: https://improveyour.marketing/strategy-templates/dtc