Direct to consumer brands are shaking up the retail world by skipping traditional distribution channels and passing the cost savings along to their customers. For businesses, however, DTC has an additional perk: It allows marketers to build relationships with target audiences through sustained engagement with their brand. Direct to consumer marketing is fueled, in part, by a wealth of first-party data, which DTC brands collect at each stage of the customer journey. When this data is integrated into a mobile in-app advertising strategy, DTC brands unlock a marketing superpower.
- What is direct to consumer marketing?
- What are the defining consumer trends of DTC marketing?
- What mobile strategies are effective for direct to consumer markets?
- What are some examples of successful direct to consumer digital marketing campaigns?
What is direct to consumer marketing?
Direct to consumer marketing differs from traditional retail in that manufacturers promote products and services directly to consumers. While this model existed well before 2019, its scope was often limited to directing customers to catalogs and mail-order products. Today, eCommerce technologies allow brands to manage their storefronts directly, interact with target audiences, and provide personalized services.
DTC marketing campaigns and their associated operations often require direct oversight from first-party sales and marketing teams. Despite this additional time and resource investment, DTC has significant benefits compared to traditional retail:
- No middlemen. Each DTC brand manages its distribution channel, cutting down on costs and fees associated with traditional retail models. If optimized effectively, these savings can then be passed directly to customers.
- More control. DTC brands have deeper insights into marketing funnels and the purchasing journey. This allows them to find opportunities for personalized value or integrate user-generated content into the experience.
- Digital agility. Since DTC brands do not have to manage a physical storefront, they can focus on digital and mobile services that can serve customer needs 24/7.
- More first-party data. DTC brand access to the entire sales pipeline gives them rich insights into every customer interaction, allowing them to optimize future marketing efforts.
What are the defining consumer trends of DTC marketing?
These insights come courtesy of Mena Iskander’s article, 3 Direct to Consumer Trends Reshaping Digital Marketing. Read the full article here!
Thanks to the direct to consumer business model, DTC brands have a wealth of first-party data at their disposal. This data is incredibly effective at building detailed customer profiles and driving performance marketing campaigns. This allows brands to target specific audiences with relevant high-value offers, including:
- Free trials
- Coupon codes
- First-month subscription discounts
- Newsletter sign-ups
These offers are then delivered to audiences through an in-app programmatic environment, optimized in real-time based on audience insights, and finally utilized by the customer.
Social media marketing is often praised as a driver of DTC purchases, but that’s not entirely accurate. According to various market research studies, 67% of users have not made purchases via social media. Instead, the value of social media lies in its consumer engagement elements that cultivate brand affinity.
This can even take the form of “social justice” marketing. According to recent data from Accenture, 62% of consumers want brands “to take a stand on current and broadly relevant issues”. One prominent example occurred when Heidi Zack, CEO of the DTC lingerie brand ThirdLove, wrote an open letter to Victoria’s Secret condemning comments from CMO Ed Razek. This letter was published in the New York Times and shared across ThirdLove’s social channels, eliciting a resoundingly positive response from customers.
To paraphrase Google Canada head of marketing Fab Dolan, the most successful DTC brands are those that understand the interplay between experiences and transactions. Customers are loyal to the brands that make them feel something, which makes experiential engagement strategies ideal for DTC markets. This can take many forms depending on your audience, but some examples include:
- Personalized quizzes that generate custom product recommendations
- AR experiences that let customers test products before a purchase
- Branded content that extends the core experience of a product or service
Each of these experiences can be delivered with impact through mobile environments, including in-app advertisements and custom branded apps. Rewarded advertisements have proven especially effective at engaging customers while offering the highest return on advertising spend (ROAS).
For more detailed information on DTC consumer trends, take a look at “3 Direct to Consumer Trends Reshaping Digital Marketing”.
What mobile strategies are effective for direct to consumer markets?
As smartphones become the primary digital contact point for most consumers, digital-focused DTC brands are using mobile to facilitate customer engagement. Some brands even go so far as to create their own apps. Warby Parker’s augmented reality app is a prime example: It allows consumers to visualize and purchase custom glasses frames. To fully maximize the benefits of mobile apps, however, brands will need to run user acquisition campaigns that attract new customers. Thankfully, mobile is an ideal UA environment thanks to the prevalence of in-app advertising options. Even for DTC brands that have not entered the app market, mobile is the single most valuable marketing channel. In the US, consumers spend nearly three hours each day on their mobile devices. On mobile, users are attentive and primed for brand engagement. Here are a few promising mobile strategies DTC marketers can employ.
Cost-per-action (CPA) advertising is a model where advertisers only pay if and when an ad leads to a specific action, usually a sale. For example, DTC brands might run a CPA campaign in which signing up for a subscription is the core KPI. Such a campaign could then be tied with performance marketing initiatives such as offering a discounted first month.
CPA advertising is an ideal growth tactic for brands with affordable, low-friction offerings and strong content marketing strategies. However, CPA ads do pose some risk to app publishers who are not guaranteed payouts for each impression. Because of this, CPA advertising works best in conjunction with a rewarded model.
Cost-per-completed-view (CPCV) advertising is a model where advertisers for completed video views. Rewarded video, which incentivizes the video view but not the secondary click-through, is particularly effective. Rewarded video was rated the optimal ad experience by consumers because these opt-in placements create a low-friction value exchange.
Cost-per-engagement (CPE) advertising is a model where advertisers pay for user engagement as defined by the ad campaign. For DTC markets, CPE campaigns are best geared towards playable ads such as mini-games or branded quizzes. Any brand could make use of gamified product showcases that help move users along the buyer’s journey with a higher ROAS than impression-based advertising.
For more detailed information on DTC mobile marketing tactics, take a look at our full guide “DTC Retail – The Top 3 Growth Tactics for Mobile Marketers”.
What are some examples of successful direct to consumer digital marketing campaigns?
They’re all known for taking a creative approach to digital marketing, telling unique stories that draw attention and engage consumers. Here are a few of the secret weapons that are helping these brands shake up the retail world.
1. Warby Parker
Warby Parker disrupted the eyeglasses industry thanks to its affordable frames, home try-on options, and DTC business model. But Warby Parker also promotes itself as a brand that seeks to help others by lowering prescription prices and supporting philanthropic causes. The company has partnered with international groups to create a “buy a pair, give a pair” program that distributes glasses to needy communities while a Pupil Project initiative donates glasses to students. These traits have endeared Warby Parker to loyal customers, and given the brand high engagement on social media platforms.
Perhaps most importantly, Warby Parker places a strong emphasis on mobile-first services. It’s primary Warby Parker app lets users see what frames look like thanks to built-in AR technology. A secondary Prescription Check app lets customers update prescriptions with mobile vision assessment features. Warby Parker is even integrated with Apple Pay for easy payment and sends package updates via SMS text. Between these features and a fully mobile-optimized website, Warby Parker is well equipped to serve customers directly from their smartphones.
For more details, read our article The Warby Parker Marketing Strategy Decoded.
2. Dollar Shave Club
Dollar Shave Club’s first attempt to promote high-quality razors for a low price made a great impression, thanks to a viral video where founder Mike Dubin joked that his blades were “f***ing great.” Since the brand’s launch, this video has garnered 26 million views and established the brand as a DTC leader in the men’s grooming subscription industry. While Dollar Shave Club’s video marketing has since matured, it continues to use humorous experiences as a selling point by injecting charm and comedy into each piece of video content. In 2016, Unilever acquired the five-year-old startup for $1 billion.
Casper is a DTC brand that managed to break into the $29 billion mattress industry with an innovative product, unbelievably small packaging, and a highly engaging social media campaign. The brand frequently uses sleep-related content to engage with customers on social media, even replying to comments with personalized notes that apologize to employers for sleeping in. Casper also uses social channels to share memorable sleep-related video ads.
While it first began life as a beauty blog, Glossier expanded into a full-fledged DTC company by making community experiences part of its brand. Named one of 2018’s Top 50 Best Content Marketing Brands, Glossier’s blog posts and videos encourage thousands of users to actively engage with the company. The brand makes user-generated content a key part of its marketing strategy and has held live Slack discussions with 100 top customers. Glossier’s runaway success ultimately brought it to the unicorn club in 2019 thanks to a $1.2 billion valuation.
For more details on how DTC brands managed their digital marketing campaigns, read our full article “4 Direct to Consumer Brands Using Digital Marketing To Shake Up The Retail World.”
Direct to consumer marketing driving the future of retail ads
Direct to consumer markets have transformed digital marketing, creating multiple avenues for customers to engage with brands. Mobile technologies are a major driver of this development thanks to shared viral content, personalized experiences, and the social engagement potential of the platform. As more brands embrace the power of direct to consumer marketing, we are starting to see a new future for retail where consumer values define significant portions of the brand experience.
For more insights into how DTC brands can enhance their mobile strategies, contact Tapjoy’s mobile advertising experts today.