Direct-to-consumer (DTC) brands have been a disruptive force in the US economy, with many DTC start-ups gaining market share from legacy brands across multiple categories, but how well do marketers understand them or the shoppers who use them?
These are topics explored in a comprehensive new report from VAB which examines why consumers are turning to DTCs in growing numbers, the core characteristics of the DTC shopper and how incumbent brands are looking to DTC brands for inspiration.
The study, entitled Deciphering direct to consumer: An insider’s guide to America’s fastest growing brands, says consumers opt to buy DTC products citing the cheaper cost (48%), fast, free shipping and easy returns (43%), superior customer service (26%) and better product design (22%).
As for DTC products that consumers say they’re likely to try, clothing and apparel comes top (57%), followed by personal care and beauty (54%), food and drink (45%), travel (38%), pet care (36%) and home and furnishings (36%).
According to VAB, DTC brands engage with DTC shoppers by adhering to seven core principles – namely that they are about e-commerce and are data-obsessed, socially interactive, design-focused, consumer-centric, customer-led and mission-driven.
In other words, DTC brands “are built around the needs of the modern consumer and these principles align with the behaviors of the DTC shopper”. These behaviors include:
• 74% feel that technology has an impact on their daily life
• 27% like to connect with brands on social media
• 72% say they buy brands that reflect their style
• 78% purchase products to help organize their life
• 83% rely on others’ reviews before buying a product and 33% often write product reviews themselves
• 63% are willing to pay more for a product that is environmentally safe and 37% shop with the expectation a brand should support social causes
In addition, the VAB study characterzes the average DTC shopper as someone who tends to be tech savvy and digitally focused. According to VAB, they:
• Are constantly connected, using the internet for product exploration, conducting price comparisons or shopping for personal needs.
• Are busy professionals who see technology as a way to organize and streamline their lives.
• Due to their busy lifestyles, convenience is key for DTC shoppers and they are comfortable conducting even the most sensitive transactions online.
• Seek quality and are willing to pay a premium for it.
Sourced from VAB; additional content by WARC staff