“How is business going?” The question was directed to a jewelry brand owner with a successful business selling through Amazon and retail partnerships with Target, Walmart, Overstock, and others. He asked for the call admitting he had prioritized little to no personal branding or DTC (direct to consumer) outlets through the years and wanted to explore his options.
“Not great. I just got some bad news.” He let out a sigh as he sunk into his chair on the other side of the ZOOM screen. “One of our main retail partners, Overstock, is removing their entire jewelry department. They’re changing their business model to only selling home goods. We’ve done big business with them for years! Years. And just like that… gone. Despite their other departments bringing in roughly $196M in revenue annually… I’m still in shock.”
He was referring to Overstock’s decision to follow Wayfair’s path and refocus on selling home decor, a change they expect to fully integrate by the end of the third quarter in 2022. Overstock’s CEO, Jonathan Johnson, said, “Exiting non-home categories has been a key focus for us over the past few quarters. I believe increasing our brand association with home positions us favorably for 2022 and beyond.”
Modern Retail reports, “The company believes a more clear focus on the home category will help further revenue growth even as furniture sales slow compared to the height of the pandemic.”
“It’s just the latest big blow to our company,” the brand owner added. His California headquarters were once packed with employees when business hit its peak five years ago. Now, he explained there were only two employees left, and he was struggling to pay the bills for some months. “This is why I’m here now,” he said. “I have to figure out a new path if our brand has any chance of surviving.”
His business revenue had been multiplying with relative ease until the first shock came—the landscape on Amazon shifted, and their hold on the platform declined. More third-party vendors in China started selling directly to consumers offering cheaper pricing, making it harder to compete in their category.
According to a 2019 study by Marketplace Pulse, 49% of the top Amazon.com sellers are based in China compared to only 47% based in the US. This change in market share was by Amazon’s design. Amazon aims to have cheaper pricing on their platform, which they’ve achieved by flattening the supply chain and connecting consumers directly with Chinese third-party manufacturers. To help accomplish this goal, Amazon holds annual summits across mainland China and other locations to recruit more manufacturers to their platform. If you’re keeping score, yes, that means it’s likely this is only the beginning…
“Nearly 60% of all online retail purchases in the U.S. were done on Amazon last year, new PYMNTS data show, reflecting the company’s tightening grip on eCommerce sales and a continuation of the stair step market share advance it has made over the past twenty years.” (source)
It’s not only happening on Amazon, either. China is projected to produce as much as $2.779 trillion in ecommerce sales, which is 56.8% of the worldwide total (eMarketer, 2021).
After five years of watching sales dwindle, this business owner finally saw the writing on the wall: he built his business on a foundation that he had little-to-no control over… to the retail partners he relied on for decades, his brand was disposable; replaceable. Digital resellers could dissolve entire departments in a moment, ripping away years of earned growth and investment… Not to mention the risk of Amazon shutting down a merchant store without being able to appeal it.
THE MARKET IS SHIFTING
This entrepreneur’s dilemma wasn’t an isolated case. Retail habits have been shifting for over a decade, but COVID-19 rapidly accelerated the dawn of new consumer behaviors, drawing many reluctant demographics to purchase online. Click-and-Collect sales grew by 106.9% in the US in 2020 compared to 2019 (eMarketer, 2020). National Retail Federation found in June 2020 that 45% of boomers were shopping more online due to the pandemic. According to a poll by CouponFollow observed from mid-March through May, 2020, nearly half of boomers said they had increased their online spending.
The interest in shopping at physical retail stores has been gradually fading into the background causing brands to double down on their digital strategies. According to SCORE, they found the following percentage of each generation still preferred to shop in stores:
Now, don’t get us wrong… we’re not standing on the corner of the block holding up signs that the world is ending and retail is dead. Retail isn’t dead, nor will it probably ever be. That being said, is it changing? Undeniably. And just like locals prepare for frigid winters in New York City, it’s time for businesses to get their coats ready or they’re going to get iced out.
As a result of market changes and COVID-19 shutdowns, around 125 consumer goods and retail companies filed for bankruptcy in 2020 (Fortune, 2021). Payless, Gymboree, and Charlotte Russe lead the big-name retailers that were hit the hardest (The Wall Street Journal, 2019).
Retailers and even digital marketplaces, like Overstock, see what’s happening. They’re already shifting strategies to change with the market. According to a 2021 study by Deloitte, retail executives name the following as their top investment priorities for 2021: digital acceleration (88%), supply chain resilience (78%), health and safety (78%), and cost structure realignment (72%). Deloitte also concluded only three in 10 executives report that their organizations have mature digital capabilities, and major investments in e-commerce, contactless capabilities, and other technology upgrades are underway.
There are still incredible advantages retail partnerships can unlock, but relying solely on another business to sell your products is like buying a car and letting someone else take the wheel… you don’t know where you’re going to end up. And if that car is worth millions of dollars in revenue, well, that’s even worse.
IT’S NOT BRAIN SURGERY
We don’t need a brain surgeon to convince us it’s better to be healthy, nor do we need a certified marketing genius to tell us it’s better to sell directly to our customers. In an ideal world, it’s obvious selling direct is the better option, but it’s about as obvious and insensitive as telling someone scheduled for surgery that it would be better for them “just to be healthy…” If only it were that simple.
Most brand owners know the shtick:
We always hear the upside of building a DTC brand, but nobody talks about the sobering reality: it’s just not that simple. Oversimplifying the solution isn’t helping anyone get closer to their goals.
Selling direct isn’t some brilliant, new idea, just like being healthy isn’t something a sick person hasn’t thought about a hundred times. In most cases, business owners have already gone through extensive research and burned through marketing budgets, exhausting every option. Every business would own its audience, achieve higher profit margins, and have more ownership over its customer journey if it could. The real question is… can it?
Competing against digital giants like Amazon and the convenience of retail can feel impossible… When businesses try to go DTC, they take on what feels like insurmountable odds:
With the climate of retail partnerships and Amazon changing, many businesses are stuck between what seems like two increasingly bad options. We’d be lying if we said building a DTC brand was easy, but here’s the thing… it is possible. Many have taken Robert Frost’s “road less traveled by” and succeeded. Big time.
Shopify customers include major brands like Nestle, Pepsi, Unilever, Budweiser, Gymshark, Hawkers, Leesa, and even celebrities like Kanye West (Sources: Shopify). In 2018, WooCommerce-powered sites generated between $10 and $15 billion in sales according to WPTavern. As a whole, retail ecommerce market sales worldwide are predicted to reach $6.54 trillion in 2023 (vs. $3.53 trillion in 2019, Statista).
Every person and their grandma get why selling direct makes more sense, but if businesses are going to ride the wave of market shifts, it’s time to start talking about how the smartest businesses are doing it. At AdVenture Media, we have been fortunate enough to get down in the trenches and lead global brands through the murky DTC landscape to victory. We want you to be one of the winners, so we’re unpacking the exact strategies we’ve seen work firsthand, including:
With the deprecation of third-party cookies, and brands losing the ability to target based on rich behavioral profiles, this is a wake-up call for brands waiting on the sidelines. Now is the time to start building first-party data, and the only way to do that is through direct relationships with customers.
We’ve heard enough brands complain: “I hear what you’re saying, but we’ve tried… it just doesn’t work.”
So riddle us this… how come some businesses are able to not only do it; but do it extremely well?
It’s because they understand the strategy is different, and that means they have to offer something different. It’s not about trying to recreate Amazon or move the retail experience online, it’s about radically rethinking the client experience and buying journey.
If you go DTC without developing your brand story, you’ll be dead in the water before you even start. It’s the same reason why investors on Shark Tank will sometimes turn down seemingly great deals… the reason they’re “out” is that the pitch is for a product—not a company. If and when a competitor offers that same product at a cheaper price, their investment is worthless.
You need to go beyond the product itself and focus on the lifestyle, the culture, the people who use it, and the experiences that are associated with it—that’s what makes a brand. If you can get the consumer to connect with that story, then voila! You’ve done what many other brands have failed to do.
MVMT (pronounced ‘Movement’), is a primarily DTC watch brand that has embraced PPC and social media since its launch, and the numbers speak for themselves: they grew to $90M in under five years. Of course, watches aren’t anything new… and there’s enough competition out there to keep the whole world on schedule. So, what’s their secret? Early on, they recognized that today’s consumers want more than just a product… they want an experience.
As part of its strategy, MVMT’s focus has remained on sharing its mission, selling the lifestyle, and attaching its products to that lifestyle. All things that wouldn’t be possible selling through third-parties. Captivating photos and videos on their website and social media pages add the kind of immersion that you simply can’t get by placing products on a shelf.
I know what you’re thinking….everybody posts pictures and videos these days to their social media platforms. With MVMT, it wasn’t simply that the pictures were high both in quality and quantity (seriously, you could scroll their IG account for hours). It was that the pictures connected with Millennials (their target market) on an emotional level, showing the brand identity their audience aspired to—featuring cool, risk-taking opportunities where you could wear their product—from tux-only events to parasailing to underwater whale watching.
If you implement social media correctly, going direct will give you the opportunity to stand out from the noise and customers the opportunity to reimagine your products with themselves at the forefront.
And if you’re wise like MVMT, you’ll partner with social media influencers quickly. The company started out with a strong website and share-worthy pictures. Social media influencers were willing to share, and their marketing strategy helped break the mold.
For MVMT, according to yotpo.com, “The majority of nice watches on the market were about $300, but if they sold directly to the consumer from the manufacturer, they could slash that price by 2/3rd simply by getting rid of the mark-up from wholesalers, distributors, and the traditional retail model.”
By going direct, brands are also able to take more control over the relationships they have with customers. With brick-and-mortar retailers, brands have no say over the user experience, no customer data, and no way to establish and maintain loyalty. Online, however, brands are able to nurture relationships with their customers.
Customer nurturing involves building effective and long-term relationships with potential customers throughout their self-directed journeys. Here are five ways to help nurture your customers according to MarketCircle.blog.
Remember, part of nurturing your customers is knowing who your customers are and what makes them tick. You can’t just plant any random seed and hope it turns into a magic beanstalk. You have to do your research and continue to observe it to figure out its ideal growing conditions.
Uber is a great example of a company that nurtures their customers well and continually gathers feedback. Uber identified all the struggles that people were having trying to find a ride, and eliminated those struggles. Then, to keep a pulse on the needs of their customers (who happens to be both those who need a ride and those who want work as a driver), Uber allows to leave feedback after every ride. Their system isn’t perfect, but because their audience feels heard, people continue to use them again and again.
Not all companies have been as wise… According to Statista, “Comcast, the television provider, was voted as the worst rated company for customer service in the United States in 2020, receiving the largest share of negative responses (44 percent). Second in the list came Well Fargo and DIRECTV, with 41 percent of respondents to the survey complaining about poor customer service.” To that stat, we say…if you know, you know. People are the essence of a company—whether it’s the people you hire or understanding the people you’re servicing.
IT’S NOT ABOUT THE WHAT, IT’S THE WHY
We had a children’s brand come to us years ago to help them breathe new life into a dying effort to sell online. As we audited their website, scouring for opportunities to grow their bottom line, a promotion popped up: “You're only 60,000 points away from a 5% discount!” This was a great example of a brand trying to do what seemed to be the “digital” thing to do, but not understanding the real strategy behind it.
Does a child really care about getting 5% off? Does anyone for that matter? And don’t get us started on the whole 60,000 points thing…it might as well be elevendy bajillion to a kid.
This is what we see so many brands do—they throw out every idea they have, read, or see, just hoping something sticks. The problem is that they don’t understand why those features work for other businesses. They copy competitors like it’s a recipe book for chocolate cake—add one loyalty point program for 5% to the website, check—but they don’t pause to understand how their audiences differ, what makes their product shine, or how to approach consumers with a unique perspective. Of course, later they wonder why they aren’t seeing the same results as those competitors.
On the other hand, Nike’s focus on its customers has clearly changed the game for them, as evidenced by the fact that it has grown DTC sales from 16% in 2011 to 35% in 2021. And, what’s more, Nike grew its DTC business eight times faster than its wholesale business in 2016.
Nike’s DTC business continues to grow faster than its wholesale business because customer data—a key component of growth—is lost when selling through third-party retailers. With DTC, it’s easy for brands to bring value to their customer experience: they have purchase history, wishlists, customer support inquiries, reviews, ratings, and more, right at their fingertips. It’s no wonder why finding ways to delight customers and keep them coming back for more is that much easier.
CRACKING THE CODE
So what’s the secret that companies like Nike know that others don’t? Going direct means you have to rethink how to set yourself apart from the competition…
This was the case for Michael Aram, a luxury home decor brand that recruited us to create a digital advertising campaign. Their problem? Although they tried to differentiate themselves, they were unsuccessful in imbuing the essence of their brand in big-box retail.
Purchasing decisions made in the luxury home decor market are defined by a few main factors: price, style, and quality. But with so many competitors, we knew we needed to take it a step further by figuring out a way to differentiate Michael Aram through branding.
The first question to ask yourself when making the move to DTC is one of the most simple, but the chief cornerstone for all marketing thereafter: "Why would someone want my product or service over competitors?” For Michael Aram, one of the things that made it so unique was the fact that each piece of furniture was individually made by hand.
Once a direction had been established, we knew we had to differentiate the key components of the brand's personality. For the handcrafted component, for example, we leveraged video content featuring Michael hand pouring liquid metal onto each piece and speaking about the care that goes into welding each item. Along with other creative elements highlighting the brand's personality, we were able to give Michael Aram that "wow" factor it was lacking.
This was just one piece of the puzzle, but our marketing campaign proved successful in keeping customers coming back for more—to the tune of a 106% increase in CTR.
On the other hand, Slinger, an innovative tennis ball launcher, was able to avoid the woes of B2C altogether by selling exclusively online and requesting our services right out of the gate.
Our first step was social, and the aim was to create engaging instant experiences on both Facebook and Instagram. We were lucky enough to have existing video content from the client featuring the Bryan Brothers, 2012 Olympic gold-medal winners, and Nick Bolletierri, pro tennis coach, to establish the brand’s credibility and develop intrigue. That video content helped us quickly fuel our prospecting and remarketing campaigns.
Even if you don’t have recognizable influencer content to leverage, the principle remains the same: creating an unmissable instant experience can help you make an impact.
In order to convert this traffic into sales, we also created a custom landing page on Webflow that tied everything together by integrating with the client's Stripe eCommerce platform. Traffic from our social efforts was directed to this landing page, resulting in $1 million in revenue within the first 90 days of our campaign.
And it goes even further than that. When COVID hit and Slinger faced shipping delays, their social following and brand community had already been established, allowing them to further establish their credibility by providing instant updates to their community.
When they don't have to drive all the way to the store just to find out a specific item isn't available, customers are somehow more understanding. Imagine that.
In the digital marketing world, we’ve seen it all when it comes to conversion rate optimization. But in making the transition to DTC, you need to take a step back, remove the clutter, and focus on the real principles of conversion. It’s the only way to establish a brand identity that ultimately leads to more control over the customer journey, better profit margins, improved customer LTV, and a whole host of other benefits you can’t take advantage of in big-box stores.
First, let’s get back to the basics. What are cookies? No, it’s not what your mom used to bake. Cookies equal a small bit of information that travels from a browser to the web server. It was coined and shortened from the term “magic cookies” by web browser programmer Lou Montulli. It references a fortune cookie—a cookie with an embedded message.
And if you’re wondering… there are actually three different parties of cookies or data. To keep it short and simple:
Imagine three people are standing in a room. One of those people knows a secret. It’s their secret; that’s first-party data. The secret-holder whispers the confidential information to one of the other people in the room, just like a game of Telephone. The other person now has second-party data (or secondhand information). What they didn’t realize was that the third person in the room was eavesdropping, and he already ran out of the house and told the whole world the first person’s secret. That’s third-party data. It’s easy to understand why consumers don’t like it.
Phasing out cookies is not new—it’s just new to Google. Google originally planned to remove cookies this year, but now they are predicting support will end in 2023. As of May 2022, Chrome is the leading Internet browser in the world with more than 64% of the global population using Chrome. In other words, 3 out of 5 people use Chrome—that’s why Google’s change is so dramatic to the advertising world.
So, why did Google decide to revoke the golden ticket for advertisers? Hannah Stewart stated in her article on Learn Hub:
According to Justin Schuh, Google's Director of Chrome Engineering, Google's rationale for phasing out third-party cookies is that users are "demanding more privacy, including transparency, choice, and control over how their data is used." He implied that Google was "evolving" to create "the web ecosystem needed to meet these increasing demands."
The loss of third-party cookies puts a stronger demand on companies to get consent and buy-in from their audiences. Gone are the days when you could buy a Google ad and easily retarget to people who engaged with your advertising but didn’t purchase.
Let’s make something very clear… Google ads are NOT going away. Companies are just going to have to learn to use them smarter. Since 77% of consumers already use at least one privacy tool when online according to Forester Analytics Consumer Technographics, this is an effort businesses should have made years ago. Consensus is the name of the game.
Instead of working through third-party sources for consumer data, every business has to look at itself as a data company.
It’s now more important than ever to convince consumers to buy into your brand. The businesses that develop strategies to increase brand awareness and obtain first-party data will come out on top.
It can be done! You don’t need a brand overhaul; you need better strategies to get people to give you information even before they buy. Because when you sell your products primarily through big-box retailers like Amazon, Target, and Walmart, your customers remember the retailer—not your brand.
And guess who’s getting all that first-party data? Not you. The retailer is. And guess what that retailer does? The retailer simply wants to sell products; they don’t care what brand is attached to those products—but you do.
Brand loyalty is what keeps you in business, so it’s imperative that your customers keep coming back for the newest and greatest (or a repeat on their favs!).
Let’s take a brief look at Mainline Menswear, an online clothing retailer that distributes many designer brands in fashion. Mainline Menswear offers a market presence in over 100 countries via seven custom-built websites and an app. The company recognized the dire need to continually deliver an excellent web browsing experience. According to SimiCart.com:
“Mainline Menswear made a strategic decision to build and launch Progressive Web Apps to provide a smooth and seamless customer experience on the web, as well as ensure the best performance. They believed transforming the original version of the Mainline Menswear website to a PWA would enable them to take advantage of the fast-moving web technology, and ensure the website framework (Nuxt.js, utilizing Vue.js) would be future-proof.”
Are you ready for this?
“With the new PWA technology, the Mainline Menswear website enjoyed a 55% higher conversion rate, and a 243% higher revenue per session in PWA compared to the old web.”
In order to get consumers to buy into your brand, it’s more important than ever to create a website experience that’s engaging, relevant, and memorable.
NOW IS THE TIME TO PREPARE
Before cookies make their exit in 2023, it’s time to be like Michael Jackson—take a look in the mirror and change. Because change leads to new opportunities. Now is not the time to hold on to the past or stick to the status quo—the early adopters who are bold enough to embrace a new digital era and radically rethink customer interactions can use these market changes to get ahead of the competition.
In fact, according to a study done by the Harvard Business Review Analytic Services, early adopters have a competitive advantage and see higher profits in business as well as market position.
However, if you wait to shift strategies until these new changes are fully rolled out, it might be too late. Now is the time to adjust before your competitors start frantically looking for new answers and competition increases.
The removal of third-party data/cookies is creating a revolution within the Direct to Consumer era. We knew it was coming. We’ve seen it building for years.
Without being able to specifically target likely candidates for your brand and without any assistance from a big-box retailer, would your brand be able to survive? That’s the question you and your board need to be asking.
We live in a time when consumers are more skeptical than ever before. 4,414,537 of live websites are currently using WooCommerce… and WooCommerce only makes up 7% of the websites on the internet (WebTribunal). Needless to say, there are a lot of brands competing for their audience's attention. Consumers are a little like a girl who has had her heart broken too many times—they’ve been wined and dined by companies that overpromised, underdelivered, and now they swear they’ll never be swindled by clever marketing again. Fool me twice, shame on me.
In response, most brands are coming in cocky, arrogant, and asking consumers to marry them on the first date… real class acts. This isn’t Love is Blind and consumers don’t want to marry your product sight unseen.
So who gets the girl? The brand that makes her laugh. Okay, analogy exhausted, but it’s true, the winner in this exchange isn’t the company that runs into the room and screams at the top of its lungs, “BUY OUR PRODUCTS! THEY’RE BETTER!”
Nobody believes you. They’re probably not. And our ears are already bleeding from the last five companies that did that before you… Before you ask your consumers to marry you, call us old-fashioned, but try dating them first.
Brands tend to get off track for two major reasons:
First things first: why is relying solely on retail such a bad idea for brands? We’ve already talked about how hard it is to differentiate your product in big-box stores, but it goes beyond that. When people buy your product at Target, for example, they probably aren’t associating your product with your brand at all—Target gets the credit. When your product is a home run, Target gets the win.
And when you’re under a big-box store’s roof, you have to play by their rules. You want to connect with customers to show them why your product is an experience in itself, but you don’t even have access to your customers. In retail, your brand never gets the opportunity to establish itself. And trust us when we say, it’s not just a phase!
For a long time, retail has felt like the only way to get your products in front of customers. We get it. But there’s a better way, and it doesn’t involve being limited by physical shelf space, having to give up a big chunk of your profit to retailers, and getting cut out of the conversation with customers.
It’s going direct, and it all starts with brand personality. This is something we see brands drop the ball on frequently: they give their brand a personality… that just so happens to be a boring one rooted in corporate jargon. Think about it this way instead: how would you describe your best friend? Caring? Quick-witted? A little quirky?
“I’M SURE SHE HAS A GREAT PERSONALITY…”
An example of a company that gets brand personality is Poo-Pourri. From their launch with a viral video that made bathroom spray relevant, they have had repeated success with viral videos scaling over 40M views on Youtube. Their unique sense of humor helps leave a lasting impression… while their spray helps you avoid one.
Using potty talk and embracing bathroom humor has helped Poo-Pourri sell 60 million bottles of its spray and landed it on the shelves of large retail chains such as Bed, Bath & Beyond, Target and Costco. Revenues reached $63 million last year and are on track to hit $100 million this year. Forbes values the business at a quarter of a billion dollars. Batiz, who owns 97%, is worth an estimated $240 million, making her one of the wealthiest self-made women in the country. (Forbes, 2019)
Forbes reported that their first video alone brought in $4M worth of back orders.
On the other hand, their competitor, VI Poo—despite touting a product that’s just asking to be a conversation-starter—managed to remove any resemblance of personality from the brand. As a result, their brand recognition hardly exists, with most consumers thinking, “Oh, that’s the off-brand of Poo-Pourri I get at Walmart.”
Don’t just ask who your audience is. Ask who their friends are. What do they have in common (brand community)? What do they value most (company ethos)? Why?
You need to find your brand’s tribe.
Tribal marketing addresses consumers through a social context. It caters to our need as people to build and associate with consumption focused groups called ‘tribes’, that are emotionally connected through their similar consumption values. (Source)
A tribe is a group of people who are like-minded and share the same values and traits as your brand. When leveraged correctly, using tribal identity can create consumers so loyal that they’ll get a tattoo for you. Literally.
When you infuse qualities that people can relate to into your brand, it makes your brand feel real, relatable, and dynamic. And when your brand believes in something, people who share in that belief will feel compelled to join you. The truth is, if you don’t know how a consumer would spend a day with their best friend, you probably don’t know enough about your audience to establish a complimentary brand personality.
The most successful brands get this:
Sales follow buy-in, buy-in follows trust, trust follows when you find common ground.
DISCOVERING YOUR USP
If you want to compete online, you have to figure out what makes your brand shine. It takes work, but saying, “Our product is the best” just doesn’t cut it when you’re standing toe-to-toe with thousands of competitors. You need what’s called a USP, and you need a good one.
USP: Unique Selling Proposition
A USP is a feature of your company that “distinguishes it from others of a similar nature and makes it more appealing” (Oxford Languages). It doesn’t have to be directly related to your product or service, it can be centered around who you serve, the customer experience, your company values, and even your brand voice. In other words, you need a brand differentiator. Your brand needs its own feel, way of talking, and delivering, and it has to be deeper than a simple product benefit. Think outside the proverbial box.
ESTABLISHING A BRAND VOICE
By definition, the voice of a low-cost apparel company needs to greatly differ from a luxury car brand because each brand is speaking to an audience with different worldviews. While the clothing brand community might value discounts and quantity over quality, the luxury car brand community cares less about price and more about quality and status. Each company needs a different identity.
If you’re in tune with what your audience wants from your brand, you’ll know how to use your brand voice in a way that’s compelling to them. Regardless of the product or service you’re offering, voice can mean the difference between a creative and exciting experience customers can’t have elsewhere and the experience of being stuck in standstill traffic.
Obviously, a rugged brand like REI is going to use a much different tone and language than a witty, sarcastic brand like Wendy’s. Take their Twitter bios for example:
Wendy’s: We like our tweets the way we like our fries: hot, crispy, and better than anyone expects from a fast-food restaurant.
In less than 25 words, each brand has laid out its tone, values, and style using nothing but brand voice. Get your brand’s personality down to a science so it can be felt in everything you do, from your social media captions to your product descriptions. It’s the only way to catch (and keep) the attention of consumers in a competitive market.
GETTING NOTICED IN THE COMPETITION
Have you ever heard about the jam experiment? Back in 2000, Journal of Personality and Social Psychology (JPSP, Vol. 79, No. 6) gave a group of shoppers the option of choosing between a smaller and larger assortment of jams… can you guess what they picked?
Obviously, the people wanted more options! At the grocery store, however, you don't get to decide between thousands of options—the selection is created for you. But online, consumers DO get a choice. So why should that choice be you?
Online, not only do consumers get to have a choice (and a whole lot of them at that), but they get to have an informed choice. Because now, they aren't just looking at five different jams and making a decision on which label they like the most. Their decision is much more multidimensional. Now, they can decide which brand most closely aligns with all the things that make them unique as a person. Things like values, ethos, voice, and style.
However, while it only takes 1/10th of a second to form a first impression of a person, it only takes about 50 milliseconds (0.05 seconds) to form an opinion about your website. That means you’d better find a way to stand out, and do it fast.
USING DIGITAL TO AMPLIFY PERSONALITY
Verb Energy, an energy bar company that touts green tea energy that doesn’t give you jitters, has grown rapidly and found a way to cut through the noise using its golden trifecta: personality, PPC, and a text message sales process that amplifies the whole experience. This system is not only practical, but it also takes the idea of brand personality to a completely new level (all while also building brand community).
Verb Energy has mastered the art of talking with their audience instead of at their audience.
After opting into a heavily discounted sample pack of Verb bars advertised online, you immediately get added to the Verb text list… which might sound like a snooze when you picture how most companies solicit their customers through text, but Verb takes a different approach.
Each month, Verb Energy texts its customers asking whether they want to skip, adjust, or pause their upcoming Verb bar subscription. While this idea isn't unique, its follow-up certainly is: instead of setting up a bot to respond with generic messages, they enlist actual people to respond to customer messages. Instead of professional “customer service” drones, their text operators talk to you like a friend—they make jokes, use emojis, and keep things fun. Because customers feel like they're actually being heard, they frequently respond to these messages just like they would to a friend: letting them know how their morning is going, how much they love the energy bars, and even sending photos of them enjoying the bars.
The Verb team has become famous for their quick personal responses, giphs, and the occasional text from one of the founders themselves... then they feature all of the best moments daily on their social media. Talk about a covert way to encourage your audience to send you user-generated content!
The founders were quoted in 2019 crediting their texting approach for their consistent quarterly growth of more than 100%. A 2019 infusion of $3.5 million in seed funding was garnered to help the trio of co-founders behind the startup meet their rapidly growing demand not just for its caffeinated oat- and nut butter-based bars, but also for the human touch the company offers consumers through its unique text-to-order platform.
Not only does Verb Bar’s personality get to shine through these texts, but they’ve also made people that love the bars—their community—an integral part of the brand in a tangible way.
The biggest takeaway? In order to beat the competition, you have to figure out your brand’s personality so you can start the conversation. If you do, you'll be rewarded tenfold with bigger AOVs, greater LTVs, and, most importantly, your customers’ continued loyalty.
Pardon our street slang, but “hitting it and quitting it” isn’t just an expression that applies to Tinder. Customers do it to brands all of the time.
We’ve talked about leveraging your brand’s personality, but now you need to continue building your brand loyalty.
Brand Loyalty: a commitment to make repeated purchases over a long period of time.
Financially speaking, it’s a no-brainer. Repeat customers are cheaper than the advertising dollars it takes to create new customers. The probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20% (Invesp). And, with the loss of third-party cookies, it’s a wise investment to pour into your current customers as much as possible.
To find success as a DTC brand, maintaining brand loyalty is one of the highest priorities. As Harvard Business Review (HBR) reported, companies with high scores on brand loyalty and customer loyalty not only grow revenues 2.5 times faster than industry peers but also deliver two to five times the returns to shareholders over 10-year time frames.
According to Investopedia:
The primary reason that brand loyalty is so important to profitability is straightforward: 65% of revenue in most companies comes from repeat business with existing clients. Not only do existing customers loyal to brands purchase 90% more frequently than new customers, but maintaining the brand-loyal segment is also far less expensive than marketing to attract new customers.
Remember, you want to build a direct relationship with your customer base. You want to narrow the margin of relying on big retailers like Nordstrom, Macy’s, Kohl’s, DSW, and Amazon.
And even though Amazon has created Vendor Central—which gives you access to first-party data—the customer is building brand loyalty to Amazon, not you. Using Vendor Central, you’ll still lack direct access to all shoppers. You won’t be able to connect with consumers directly unless they choose to follow your brand and receive updates, which can be a hard sell when working through a digital marketplace.
The issue is, most brands don’t value customer loyalty until an issue arises and they need to fall back on it… but at that point, it’s too late. You have to start building brand loyalty with consumers early before you ever need to ask for anything in return. If it feels like a ploy to move more widgets, consumers will bolt (remember, they’re still that brokenhearted girl who is afraid to get hurt again).
COMMUNICATION COVERS A MULTITUDE OF SINS
In 2020, we had a huge furniture company that was totally reliant on Wayfair, Walmart, and Amazon to sell their products. In 2018 and 2019, they were doing hundreds of millions of dollars a year in revenue. But then COVID hit. The supply chain was disrupted, and they had no relationship with their customers. They had no way to communicate with their customers why there were delays or even what their customers could purchase that was in stock. Their lack of a direct-to-consumer audience cost them greatly. Revenue plummeted, which created a snowball effect of layoffs and shutdowns.
When things go wrong, you need to be able to act fast and communicate quickly—research by McKinsey & Co. found 70% of customers’ buying decisions are based on how they feel they’ve been treated by a company.
As a reverse example, one of our team members (you caught us, our founder), Isaac, was on the receiving end of a supply-chain shortage during COVID. He had ordered a saber from an ecommerce company called Functional Tennis, but there were shipping delays, manufacturing issues, and products were quickly back-ordered. Functional Tennis immediately sent Isaac a personalized email explaining the situation and continued to give him updates throughout the process:
Subject: Latest Saber update
The sabers are getting closer to Dublin, not quite here yet.
Last week I was told of another delay and I was hoping it would magically change for the better or not change for the worse. I really didn't want to send this email.
The latest I have and hopefully the last of this kind of email to you is that they are due to arrive in Dublin on Friday 17th June, then take a few days to clear customs. I'll begin realistically shipping from the Wednesday of the week after.
I know how frustrating this is for you and trust me it's just as frustrating for me. Global shipping is a nightmare at the moment,
All I want is for you to have your saber.
Boxes, labels, and keyrings are all ready to go and once sabers arrive they will leave here asap for you.
I thank you again for your patience with me, just hang in there a bit longer.
With strong communication, Isaac felt heard, informed, and wasn’t mad about the situation at all. He happily waited for the order to arrive instead of demanding a refund and actually tells others what a great experience it was.
When you develop brand loyalty with your audience, it can turn even the worst situations into an opportunity to deepen customer relationships and win the referral.
THE LAYERS OF LOYALTY YOU NEED
There are three elements of brand loyalty:
“Typically, loyalty is viewed by organizations as customer purchases and repeat visits. This is looking at it solely from a rational perspective. Many organizations do not consider that loyalty is an emotional attachment. The reason customers return is not just a rational perspective but an emotional perspective.”
Author of six best-selling books on customer experience and CEO of Beyond Philosophy
According to Annex Cloud in a white paper article titled, Why Emotional Loyalty Matters More Than Ever, they reported:
A study by CapGemini showed that customers with high emotional engagement are more likely to have strong brand affinity compared to someone with low emotional engagement.
Their research showed that emotionally engaged consumers:
Research shows that highly emotional people buy their favorite brand 82% of the time when they need a specific item compared to 38% for less emotional people. Non-emotional consumers tend to lean toward the rational and behavioral models; thus, making decisions based on logic and routine.
For a brand example of aiming advertising at emotional loyalty, let’s look at the soda wars that have been going on for decades. Coca-Cola is consistently reinforcing positive emotions through its advertising. Regardless of whether it’s a polar bear, Santa Claus, or Jane Doe on the street, everyone is smiling and holding a Coke. Coke is appealing to our emotions. Pepsi-Cola, on the other hand, is constantly striving to tell us why it is better than Coke. Pepsi’s advertising strategy is aimed at behavioral and rational loyalty.
Remember, we’re aiming to create brand loyalty so that people will want to purchase directly from you, rather than the big retailers. This saves you in the long run because it lowers the overhead on products and gives you the opportunity to create a direct relationship with your customers—which is what THEY WANT!
Let’s say you have a brand like Nike. Your brand is sold just about everywhere—whether online or in-store. You have products that are generic and products that are limited-edition. How do you convince consumers to purchase directly from your e-commerce store versus Amazon, Target, or Foot Locker?
Well… if you’re Nike, you’re going to offer something that the consumer can’t find anywhere else. What is it? It’s called Nike By You. You can create a personalized pair of Nike shoes—designed by you—with five different customizable elements.
Now, not every brand has the capability to allow their customers to create their own product; and frankly, we’re not sure it would be wise for every brand to offer it. However, every brand can do SOMETHING to bring more traffic to their own site and capture the consumer’s interest and loyalty—even if it’s not on that scale.
TechTarget.com defines PPI as “any data that could potentially identify a specific individual. Any information that can be used to distinguish one person from another and can be used to deanonymize previously anonymous data is considered PII.”
Remember, not everyone who visits your website will actually purchase something. With cookies going to the wayside, you could potentially have thousands of ghost customers. They came. They saw. They clicked away.
The consumer data that businesses collect can be broken down into four categories:
What tactics can be used to obtain PPI?
A rewards program seems like a win-win! The customer gets things like discounts or freebies, and according to Shopify.com, you get:
At AdVenture Media, we are no strangers to working with Rewards Programs. In 2020, we proposed a redesign for the American Eagle Outfitters (AEO) rewards program. The problem was that the rewards program was made by adults for adults. But what demographic is primarily purchasing their products? Kids and teens.
Therefore, we revised the rewards program to be geared toward the demographic that wants to shop there versus the parents who are paying for it. Given the AEO audience, here are some ideas we suggested for the rewards program:
Newsweek and Statista recently compiled a list of America’s Best Loyalty Programs. With a high score of 10, which no one received, here are the top contenders with a score of 9 or above:
It’s important to note that Shoes.com is now part of the DSW (Designer Shoe Warehouse) family. DSW offers incentives to get customers to opt-in with their information and retains more customers by tracking what the customer is shopping for when on their site. If the customer leaves without purchasing, DSW immediately begins an abandoned cart email campaign.
If the customer still doesn’t purchase the said pair of shoes, DSW will send them an email when those shoes (or others the customer looked at) go on sale. Add to that the freebies and coupons that their loyalty program gives—including free shipping, and you’re guaranteed a repeat customer (unless you’re out of their size!)
Other than simply asking a customer to opt-in to a loyalty rewards program, what other tactics can be employed to obtain the all-powerful PII?
Be creative. Think outside the box. People value their privacy, and they want more than coupons and 5% discounts to offer up their information. Think about your brand personality and who that personality caters to. If you’re a brand that is known for being a bit edgy and a risktaker, then what can you do to emotionally connect with your consumer?
According to Bplans.com, “Millennials are the most brand-loyal generation; Elite Daily and Crowdtwist released a report revealing 50.5 percent of Millennials claim extreme loyalty to their brands. When brands emerge on multiple social media platforms, they increase their visibility to the public. If the brand is authentic, people will take notice.”
The goal, regardless of how you achieve it, is to at least get a person’s email address so that you are able to communicate with them in some form or fashion. As third-party cookies fade into the distance, it’s more important than ever to start thinking about how to get consent from your customers in a way they feel good about.
92% of consumers are more likely to trust non-paid recommendations than any other type of advertising according to research from Nielson.
This is why building a brand community is to long-term ROI what water is to staying hydrated.
Influencer marketing’s market value grew more than twice within a three-year period—from $6.5 billion in 2019 to $13.8 billion in 2021 (Statista Research Department). Influencer marketing has been considered the fastest-growing consumer-acquisition channel (Influencer Marketing Hub). According to a study by Kunst in 2020, 43% of online shoppers learn about new and interesting products from social media networks. The same source also found that 19% of consumers use social media to learn more about products they’re considering.
Building a DTC brand doesn’t simply mean running ads to acquire new customers. Word of mouth (and word of social media) are some of the best forms of marketing you can leverage for widespread organic growth. So, how do you transform consumers into a brand community that wants to engage with your business?
Your brand community is the direct byproduct of the loyalty you’ve cultivated with your USP. Unfortunately, too many businesses look at brand community simply as another tactic to back their customers into a corner so they can sell to them all day… and then they wonder why they can’t garner more than five likes on social (and all of those are from their staff). When it comes to creating a community, selling has to take a backseat. It’s about creating real, dynamic relationships with customers, just like Verb Energy did through text. And yes, selling is a natural byproduct of trust, so shareholders will still see the kind of MoM growth they want… It’s a win all around.
When brands think about community platforms—social media, text, email—they have to start by understanding why someone uses these tools. Make it personal. Think about the reasons you follow friends on social media: you want a place to connect with them online and see what’s going on with their lives. When people use these platforms, they are looking for one of three things:
But if you fail to offer the kind of value people expect, you will lose your community—no matter how loyal to you they were at first.
After all, if your friends used their social media pages to try to sell you products, ignored all of your comments, and didn’t post anything that mattered to you, you’d be tempted to hit that unfollow button as well… it doesn’t matter how far back you go. (A few encounters with friends aggressively pushing their network-marketing businesses may be coming to mind.)
According to BuzzStream, 45% of people will unfollow a brand on social media if it’s too self-promoted.
One of the biggest advantages of going direct is the fact that you're no longer cut out of the conversation, but that also means it’s time to create a conversation worth having. It’s time to not only join in on the conversation but also direct the conversation.
Opening up conversations between you and your customers serves as the building block of community, and not just when it comes to positive feedback. Online, even negative comments on social media can drive positive outcomes. Not only do they give you a clue into how people are feeling about your product (something that’s harder to gather through retail outlets), but unlike a classic email or complaint form, they also give you the opportunity to address concerns in front of your entire audience. You have the opportunity to make things right and even create a stronger sense of brand loyalty just by the way you respond.
If you put yourself in the customers’ shoes, respond quickly and politely, own up to your mistake, and offer a solution, customers are much more likely to be understanding and give your brand another chance. If you can make your customers feel heard, you can further the emotional connection they have with your brand.
There’s never been a better or faster way to get intel about what your customers want, what their habits are, and what they think about your customer journey. However, when brands use these tools in an effort to manipulate customers to grow their bottom line, their loyal audience often runs for the hills. If they lean into the conversation and focus on making meaningful consumer relationships instead, not only can they gather a larger customer audience, but their community will start doing the selling for them.
User-generated content typically constitutes videos, pictures, or quotes from real people talking about their experience with a product or service. And in a world where people open their phones to find ten ads in less than a minute, consumers have to work harder to determine what’s worth their time and what’s not. Polished, cookie-cutter commercials aren’t enough anymore… consumers want something real. 92% of consumers trust recommendations from other people more than any other source (Nielson).
79% of people say that user-generated content highly impacts their purchasing decisions (Stackla, 2021). UGC is an incredible and powerful component of your brand’s personality that can elevate the effectiveness of your other marketing efforts. “Almost all enterprise marketers surveyed said that in 2021 they plan on re-using influencer content. Of those, 94% said paid social would be the primary venue” (Linqia).
When it comes to omnichannel marketing, the real question is not, “Is it effective?” but, “How can we make it work for us?” However, omnichannel marketing is more than just marketing in multiple channels. Sure, you can market in many places, but what matters is how. It’s about creating a consistent brand experience across multiple channels by reaching your customers in the way that best suits them.
Omnichannel marketing is based on how customers want to be engaged and their ability to access the right information at the right time and place. Every channel you use to engage your audience—be it a website, mobile app, social media page, email newsletter, or any other—should have a goal. “63% of consumers need to hear company claims 3-5x before they actually believe it” (Source).
Your goal can vary for every channel, but you need to know what you want to achieve with it. For example, your goal for a blog can be to add value to your customer experience, while for a social media page it could be to engage existing customers and draw in new ones.
You've probably seen the term "attribution modeling" quite a bit recently. The concept is simple: understand the actions your customers take throughout the customer journey. How are they getting to your website and what marketing touchpoints did they encounter on the way? Are they buying your products? Are they reading your blog? The easiest way to do this is by installing a universal attribution model, which lets you see how much value each of your marketing channels brings to your bottom line.
Frank Body, a skincare brand, understands that community isn’t built on products, it’s built on lifestyles. That’s why they bring consistent value to their community through social media channels, newsletters, blogs, and more. It’s also why their Instagram page has grown to over 800,000 followers and the company has over $20M in sales—they don’t just flood customers’ feeds with products and overt attempts to make a sale.
Instead, they use a mix of engaging memes, videos showing how to use their products, UGC, throwback Thursdays, exclusive offers, and more. Their social strategy is far more effective in engaging customers because customers are at the forefront of every single post. It’s obvious that Frank Body isn’t just using its social media presence as a way to sell more products; instead, the brand uses its social media presence to benefit its loyal community and give them a place to connect. In the end, this approach is a win-win because it results in more sales while growing loyalty and making the community feel valued.
It's all too common for businesses to use their customers as numbers and dollar signs. However, when you embrace your audience and build a relationship with them on your online platforms, you can build a community that continues to invest in your brand for the long run.
Having something compelling to say is the foundational layer. Paid acquisition is one of the primary channels for getting your audience to listen. With a sound paid acquisition strategy, you’ll expose your brand personality, loyalty programs, community, and USP to the people most interested in what you have to say.
PPC (pay per click) and SEM (search engine marketing) can help you acquire large amounts of highly targeted traffic and convert that traffic into leads, customers, and revenue. But it’s crucial to understand how these things work in conjunction with the user experience we’ve discussed in the prior sections. Now that third-party cookies are going away, it’s crucial to begin thinking about how you’ll capture meaningful customer information directly from your consumers—even before a sale—instead of relying on Facebook’s cookie profiles. CDPs (Customer Data Platform) are on the rise, and it’s worth exploring if adopting a CDP is a worthwhile investment.
“A customer data platform (CDP) is a platform used by marketers to collect all the available data about the customer and aggregate it into a single database, which is integrated with and easily accessible from a number of other marketing systems and platforms used by the company” (Clearcode).
In today’s landscape, I think every D2C brand needs to think of themselves as a data company, too. Unlike a CRM, a CDP focuses on the customer behavior with your product. It gathers data from every customer touchpoint, including your ads and website traffic, allowing you to understand your customer’s omni-channel journey from start to finish. This also makes it easier than ever to upload your entire database to platforms like Facebook and Google to retarget to your audience, turning past traffic into repeated sales.
Personalized customer experiences are the name of the game, and because it costs much more to acquire new customers than to retain existing ones, it only makes sense to find ways to engage and delight your existing customer base.
Why retargeting is critical:
In the past, cookies did a lot of the heavy lifting in terms of tracking the customer experience. These days, that’s up to you and your CDP. So how do you go about building the database you need to create a more personalized user experience?
Now your CDP is ready to go! With your CDP in place, valuable insight is just a few clicks away. However, it takes planning and potentially re-imagining your entire customer experience to get your marketing where it needs to be. Not necessarily doing more, but doing more of the things that matter.
That’s exactly what we did with one of our clients, a jewelry company, when we learned that the biggest problem it was facing was a lack of awareness of the product—a specific gemstone. When we asked first-time buyers why they waited so long to make a purchase, we learned that in almost every case, it was a result of not hearing about the product before. From there, we knew we had to invest not just in brand awareness—but in the kind of brand awareness that would result in a return on investment.
Throughout our research, we learned that search engine marketing wasn’t working for this brand. Why? Because according to data, people weren’t searching for this specific gemstone to buy it. Instead, they were curious about it and wanted to learn more. That’s why we decided to stop marketing to them. In creating an educational, value-driven blog, the brand was able to gain credibility and establish itself as an expert. We started using paid search and social to drive traffic to these educational pages instead of their product pages. We knew that in turn, these consumers would turn to this brand if and when they were interested in making a purchase.
The data we gathered confirmed this theory, and in tracking PPC and SEM, we were able to create a model that could introduce our brand to new audiences and eventually convert them into paying customers. All told, our average order size increased by 44% boosting revenue growth by 22%. By reworking our digital advertising efforts, they became more targeted and effective. We didn’t have to reinvent the wheel; we just had to make it spin in a different direction.
This example highlights the fact that in order to grow your business with the DTC model, you must have a deep knowledge of digital acquisition platforms and Google and Facebook. And even more importantly, you must know how your customers interact with those platforms. If you ignore this data, you eliminate potential marketing opportunities that could make a real difference in the success of your brand.
KNOWING YOUR DATA
There are a lot of companies out there spending way too much money on digital marketing because they aren't doing their research. If you don't know your customer journey, then you won't be able to market in the most effective way possible. If you notice a niche that isn’t being filled, your brand has to be the one to do it. Otherwise, customers will look elsewhere to get that information. Don’t miss out on the opportunity to differentiate your brand, provide value, and establish yourself as a credible resource in your space.
Luckily, with a CDP, you can put your data to work for you. You no longer need cookies to get to know your customers; a CDP is your life raft for making brand decisions that put your customers at the forefront.
A CDP can help you centralize customer data and leverage it by creating customer profiles. With this data at your fingertips, you can learn things like, “Is our website messaging connecting with people?”, and “Are our customers satisfied with the number of products we have on our website?” It allows you to collect data from all the places customers interact with your business (i.e. your website, social media channels) and segment it so you get valuable insight into ways that you can personalize the marketing experience for your customers. All without cookies.
It can be a little daunting to think about how to leverage that data to work for you, but what's even scarier is being stuck with the wrong strategy. Instead, implement your CDP and use that data to inform and drive your marketing initiatives. It’s the only way to gain key insights into your customer journey from start to finish so that finally, you can have a better grasp on what’s working as well as where you may be falling short.
MEETING CONSUMERS WHERE THEY ARE
Traffic brought through PPC advertising yields 50% more conversions than organic advertising.
The incredible power of paid acquisition is that you don’t have to get a customer in a store—they don’t even have to be actively trying to purchase anything—still, you can identify exactly where your customers are spending their time and place your products in front of them. That’s Bruce Wayne kind of powerful.
36.8% of the world’s population uses Facebook monthly. That’s not all, out of 4.6 billion Internet users, 3.59 billion people use at least one Meta app every month, including Facebook, Instagram, Messenger, or WhatsApp.
When you advertise on Meta, your ads can reach 63.7% of all Americans over age 13.
And that’s just Meta. You can target consumers across a long list of social media platforms including Tik Tok, LinkedIn, Twitter, and Pinterest.
With Google, businesses that have heavily relied on retail partnerships can get an even bigger leg-up: they can use competitor keywords to effectively “steal” traffic directly from big brands. Brand awareness can be increased by up to 80% through Google paid ads (source).
Knowing the power of paid acquisition doesn’t mean understanding the strategy to make it profitable. Similar to how Yoda taught Luke Skywalker, paid advertising is a force that must be mastered—it takes focus, experience, and a crystal clear picture of the outcome you want to achieve.
Xebec came to our team with a need to pivot their paid strategy as more people went remote during COVID. The initial value in their product, a light, portable dual-screen monitor attachment, provided consultants with a similar level of productivity while traveling that their large desktop monitors provided them at the office. With remote work surging, this core audience temporarily vanished forcing Xebec to pivot and reshape its core personas.
We knew that in order to make paid acquisition profitable, we needed a clear vision of the new demographic we were targeting. We created four new personas: the digital nomad, fully remote workers, hybrid workers, and students—all people that could get massive benefits from the products Xebec sold.
With our four new audience profiles, we produced two new creatives for each demographic highlighting the value proposition Xebec provides each cohort. From there, we identified three main targeting criteria we were going to follow. The results?
Unlike retail partnerships, when you go direct with PPC/SEM, you don’t have to wait for new business to come to you. You just need a highly focused strategy to bring the right audience in.
Sennheiser is an audio company specializing in designing and producing a wide range of high-fidelity products, including microphones, headphones, telephone accessories, and aviation headsets for personal, professional, and business applications. The Pro Audio Group chose AdVenture Media to lead and execute advertising for their Pro Audio eCommerce website.
Sennheiser came to us because they wanted to grow their e-commerce business. Historically, the majority of their revenue came from third-party retailers. However, from 2019 onwards, Sennheiser’s eCommerce website saw healthy growth YoY and the client wanted to maintain this trajectory.
After doing some data research, we were able to determine two specific trends.
1. The majority of products sold grew YoY.
2. Some products sold better in certain months.
We took a closer look at how users engaged with products on their website, and this information helped us determine how to best allocate the client’s budget to maximize revenue for the remainder of the year. We increased their ad spend by 108% and saw a 275% increase in revenue from $348K to $1.3M. Their ROAS increased by 81%. We also pushed higher-value products and increased AOV from $132 to $204 (55% increase).
From Nike and Sennheiser Pro Audio Group, we learn that it’s imperative to do your research on trends and do something different on your company’s website (or social media accounts) to drive traffic there.
We’ve talked about getting traffic to your site, but now let’s talk about getting traffic that converts. When done right, your website is the center of all the elements we’ve discussed combined—it should serve as the hub of your brand community, personality, your PPC funnel, and the place to gather PII. Your website is arguably the most important step in the funnel.
When brands try to explain why they don’t think going direct to their customers is possible, they almost always begin to explain a version of this experience as the proof… we like to keep things focused on hard facts at AdVenture, but because we hear this story so often as one of the main roadblocks that convinces businesses to give up on their DTC strategy, indulge us for a moment… we promise, the result will be worth the trip.
It all starts when your marketing team tells you that you’ve had 500,832 clicks to your website thanks to your paid ad campaigns. For a moment you wonder if you should celebrate, but then you flip over to your sales report and the numbers are… bleak. Barely a .48 ROAS. After weighing out your costs in ads and the team hours put in, it feels like your marketing budget is being drained dry with very little to show for it.
Unfortunately, this is when most businesses assume the traffic source is the problem–they fire people, change platforms, and make reckless decisions all focused around the top of the funnel. Eventually, they rule out every traffic source and determine going direct isn’t a viable option.
There’s a reason a lot of businesses feel like they’re trying to ride currents on a raft that has a hole in it, and the air—their budget—is slowly seeping out from under them. The problem is, when they realize they’re taking in water, they start inspecting their paddle. Am I not paddling fast enough? they wonder. That’s your top of the funnel—the paddle that helps you go faster. People love to hyperfocus on their paddle, it’s fun to go fast, but a paddle is worthless unless your float actually works. If you’re taking in water, the first place you need to look at is your float—the digital foundation of your brand—your website.
WHY YOUR WEBSITE ISN’T CONVERTING
Econsultancy reports that companies spend $1 on optimizing their conversion rate for every $92 they spend on customer acquisition… Yikes. It’s no wonder brands feel like they’re bleeding money but aren’t getting any sales! According to Adobe, the top-converting companies spend at least 5% of their budget on conversion rate optimization.
You should judge the success of your website by three key metrics: your website conversion rate, AOV (average order value), and your LTV (lifetime value) or customer retention. Your LTV is also a big key in understanding how consumers are responding to your product overall.
Your website conversion rate is a powerful metric that can help you do a cross-examination of your marketing funnel, identify where the problem is in a matter of seconds, patch up the holes, and go on your merry way.
So, what’s a sign you’re losing air? The average conversion rate for a website is 2.34%, but the best-performing sites can reach well over 11% (Wordstream). It’s important to remember that no two ecommerce industries are alike, so you want to measure against conversation rate averages that are as close to your industry as possible.
Your website conversion rate can tell you a lot more than simply if your site is converting, it can also explain where there’s a disconnect. For example, if you have a high conversation rate up until the “initiate checkout” point, you know to take a closer look at the last phase of your funnel: your exit-intent pop-ups (think discounts that grab your attention right before you leave a site), the ease of your checkout process, and your abandoned cart email sequence.
The main reasons for cart abandonment (source)
The second two metrics speak right to your bottom line. How much money are you making per purchase? If you can increase your AOV and LTV, you can give yourself wiggle room on your goal cost per acquisition and make marketing online more profitable. We’ve all heard the expression it’s better to retain a customer than to acquire a new one… when it comes to creating a winning online brand, AOV and LTV are the “retention” KPIs you need to build around.
Becoming a DTC powerhouse starts and ends with learning how to not only diagnose the success of your website but the ability to then adjust and manipulate it until it’s turning impressions into conversions at a profitable rate. More often than not, it comes down to a few strategic adjustments and testing, testing, testing. According to Econsultancy, businesses that successfully boost conversion rates perform 50% more tests than other businesses.
YOU MIGHT ALSO LIKE…
When you sell through a retail partner, one of the most valuable things you lose is the power of the upsell. Of course, every digital marketplace or brick-and-mortar has one—like the rows of checkout goodies at Target—but retail partners have to look out for their bottom line revenue, not yours. That means they upsell whatever benefits them the most, and you don’t see a dime of that extra profit…
When you sell on your own website, this is your chance to take full advantage of the ability to upsell. According to data from Sumo:
According to Inside Design, ESPN.com revenues jumped 35% after they listened to their community and incorporated suggestions into their homepage redesign. If you’re using platforms like Shopify, WooCommerce, or Magento, creating an upsell on your website is as easy as installing an app.
FREE SHIPPING—THANKS AMAZON
Thanks to buyer habits created by Amazon, 85% of consumers prefer free shipping over fast shipping (Deloitte). Offering free shipping on your website can help you pull buyers out of their regular shopping routines with digital marketplaces and encourage them to purchase directly from you instead.
Free shipping is so important, it can actually be the number one reason buyers are abandoning cart on your website. According to the Baymard Institute, shipping fees and other extra costs are the main reason why shoppers decide not to finalize the purchase online.
Mobile accounts for half of the website traffic worldwide based on research from Statista. Retail mcommerce (mobile commerce) sales hit $359.32 billion in 2021, an increase of 15.2% over 2020. By 2025, retail mcommerce sales are predicted to more than double to reach $728.28 billion and account for 44.2% of retail ecommerce sales in the US (Insider Intelligence). Your website shouldn’t just work with mobile, it should be optimized for mobile. This means taking into account how your website loads on mobile devices, displays, and how easy it is to navigate.
When thinking mobile, it’s also important to factor in site speed. With so many distractions only a swipe on your phone away, mobile shoppers are quick to abandon websites with slow loading times. 39% of consumers will stop engaging with content if the images won’t load and 51% of American online shoppers say that a slow loading time is the top reason they abandon a purchase (Source). In fact, the same source found a site that takes 6 seconds to load will have a 50% loss in conversion and that slow-loading websites cost retailers $2.6 billion in lost sales each year.
WAS THAT DIRECT ENOUGH?
Since people can’t touch and feel products online, clarity is the key to building enough trust to entice a purchase. Using tools like a video to help demonstrate your product in action can increase conversions by 86% (EyeView).
According to Unbounce, it’s extremely important to be clear when asking your customers to take action on your website, both when it comes to forms and buttons. They report if you reduce the number of fields on a form from eleven to four, it generates 120% more responses. Using “Submit” as your button call-to-action can reduce your conversion rate by as much as 3%. Better yet, Hubspot says personalized CTAs outperform non-personalized CTAs by 42%. Hubspot also reported that making the color of the button more eye-catching could increase conversions by 21%.
As a last effort to make sure nothing is lost in translation, giving customers a live chat option can dramatically increase sales. Tidio reports websites with live chat to have a 40% higher conversion rate than sites without it, plus a 10% higher AOV.
Every single day businesses are taking the leap to sell direct and it’s paying off.
Under Armour announced in October of last year they would be exiting between 2,000-3,000 wholesale doors as they shifted to a more DTC-focused model. Both of their channels saw large growth in 2020, with wholesale growing by 157% and DTC increasing by 52%. CEO Patrik Frisk noted they have seen a “significant increase in DTC” revenue.
The Lead’s recent Direct 60 List, which highlighted executives for developing and improving DTC models at traditionally wholesale companies or at DTC brands not born online, includes the likes of Express, J. Crew, Marquee Brands, Estée Lauder, L’Oréal and PVH.
“There’s ... brands that are highly, highly wholesale that are now making major shifts into DTC. So they’re going from 90%, 95% wholesale into a much higher percentage of that business coming from DTC,” Gandhi said. “Brands you wouldn’t even think of, like Movado” (Retail Dive).
Following the same pattern we’ve seen shaking the retail space, Columbia Sportswear made the announcement they will be focusing on building their DTC team versus wholesale as it’s “critical” to long-term growth according to CEO Tim Boyle.
As the market continues to shift, there will be winners and losers—we want you to be one of the winners.
In order to build a DTC brand that thrives, you need to:
Retail isn’t dead. Amazon isn’t irrelevant. Going digital isn’t the only future, but we believe it has to be a valuable part of it to safeguard brands for long-term growth. With the dramatic shifts in consumer behavior over the last decade, we expect consumers will continue to move toward niche online experiences beyond what Amazon or retailers have to offer.
It’s time to dig deep and ask the important questions: What experiences really matter to your customers? How does your brand speak and resonate with its audience? How can you turn your client database into a thriving brand community instead?
With third-party cookies dying off, now is the time to lean into loyalty programs, rethink brand and customer relationships, and invest in the right platforms. Unless brands start to forge a customer bond now, they won’t have any way of nurturing people through the funnel down the road. The good news is, most businesses aren’t willing to put in the effort to learn, adapt, and pivot to a new digital world, and this means the ones that do will shine.
So… will your brand be the next DTC success story?
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