According to a study by IAB growth in most consumer categories is shifting to direct-to-consumer (D2C) brands that have agile supply chains flexible enough to adapt to constantly changing consumer needs. D2C companies represent a small but a significant segment. Today online sales represents 13% of the total retail sales in the US, but it accounted for almost 50% of all retail growth in 2017. While the trend of suffering brick-and-mortar stores continues, online sales platforms are booming: in 2017 ecommerce builder Shopify powered 600,000 online businesses and 73% of purchasing traffic came from mobile devices.

Innovative growth companies, such as Warby Parker, Glossier and Dollar Shave Club are “digital natives” and have been shaking the consumer goods market. D2C brands tend to focus on mastering on a specific product category. Moreover, they have nailed online customer experience since their launch. At the same time global enterprises, such as Unilever and Nike, have noticed the trend, and are now investing in creating frictionless online shopping experiences or acquiring innovative businesses to boost their sales. For instance, Nike estimates its D2C sales to grow by almost 2.5 times from 2015 till 2020. Alike, Walmart decided to tackle the challenge by acquiring Jet.com and is now doing a major makeover for Jet.com to reach affluent Millennial urbanities by generating localised content and delivering personalised product recommendations on its website.

Getting Closer with Consumers and Solving the Paradox of Choice with Data-Driven, Uniquely-Tailored Experiences

There are many reasons why companies are starting to emphasise D2C channels over traditional brick-and-mortar stores. Firstly, younger generations, such as Millennials and Gen Z, are tech-savvy and always looking for convenience. But it’s not only the young who lean more towards online shopping. Also busy families and elderly people can hugely save time and effort by ordering home delivered meal kits, groceries and cleaning products or delight their day with flower deliveries. Clearly, this channel can make anyone’s life a little bit more glamorous. However, 64% of shoppers feel retailers don’t truly know them. We are constantly bombarded by irrelevant offerings. Undoubtedly, there is a demand for more personalised experiences.

D2C companies can directly access customer data and thus, create individually tailored experiences with the right technology. Several disruptor companies have taken a note. They don’t want you to only buy their products but also fall in love with the brand. Thread App Uses algorithms to provide personalised styling recommendations for men from hundreds of brand partners, and luxury shoe brand M.Gemi creates limited style editions each week based on consumers’ desires. Automation and AI technology is revolutionizing digital marketing. With the help of the right technology, such as the Spirable platform, brands are targeting their audiences with data-driven, highly personalised video ads across the customer journey. In-the-moment, dynamically optimised content helps to keep customers excited and to build lasting relationships.

Delivering Personalised Shopping Experiences for Vast Audiences at Lower Cost

Social media is a powerful channel to scale brand presence and engage with consumers globally, especially when targeting Millennials and Gen Z, who constantly use social media to get inspired and to read product reviews and recommendations prior to filling their online baskets. The multi-dimensional and agile D2C brands have a strong presence on social media. Emily Weiss managed to built a cult-like following for her lifestyle blog into The Gloss prior to launching rapidly-growing beauty line Glossier. Luggage designer Away ended up publishing an entire travel related book, and is regularly delivering travel related content via its magazine, and podcast show! Opportunities are endless. In the midst of these endless options individually tailored, relevant messaging is the key to reach consumers’ hearts.

Yet, the cost of customer acquisition via paid social media ads has become more and more expensive due to the markets’ crowdedness. Many fund backed companies have ended up spending more on customers than customers are spending on them. Because social media channels are favoured by consumers, retailers should not exclude them from their marketing plans. To stand out from the crowd of irrelevant ads and to avoid rising costs brands need to have refined plans for social media marketing and the right tools to deliver their message. AI-powered Spirable platform is capable of generating hundreds of thousands of data-driven personalised videos within a single online platform. Many global brands have chosen Spirable to automate their social media marketing campaigns and have managed to significantly reduce their advertising costs.

Read more about our successful case studies and request a demo to get inspired!