As of January 2021, smartphones make up 75.6% of the global device market share. It’s only natural that marketers would want to shift their focus from more traditional channels in order to reach people where they spend the most time: on their phones. Meanwhile, those consumers are changing, too. Direct-to-consumer brands are becoming more and more popular, with millennials and Gen Z eschewing the traditional retail experience in favor of DTC brands that favor quality, transparency, and shared values.
Because of their increase in popularity, DTC brands are leading the charge when it comes to modern growth marketing, and established retailers are following suit. Because of this, marketers are now focused on the mobile experience, as well as creating positive consumer engagements that drive repeat sales and longtime relationships. In this article, we’ll show you how to leverage these tactics to drive brand growth in 2021.
Let’s jump in!
Quantifiable marketing has always been central to DTC strategy, but maturing digital channels, such as social media, aren’t delivering the same ROI that they used to. According to data averaged from various market research studies, 67% of users have not purchased from or directly within social. Impressions simply aren’t translating into customers, and customer acquisition costs are higher than ever.
In light of these shifts, DTC marketers are seeing a bigger impact from emerging platforms. As a result, they’re continuously testing these new avenues for growth and switching to mobile-focused channels like in-app advertising. However, even testing comes with risks — that’s why DTC marketers favor performance marketing.
In a performance model, advertisers pay only when they achieve a specified result — not for clicks or impressions. When marketers are able to measure their Customer Acquisition Cost (CAC) in real-time, they can focus on creating direct response offers designed to elicit an immediate response from consumers, such as:
Offers like these reduce the friction involved in a purchase. As an added bonus, combining direct response ads with emerging channels like rewarded in-app often results in a more positive experience, which is exactly what DTC consumers are expecting to find.
One of the biggest differentiators between DTC brands and traditional retailers is their focus on maintaining relationships with their customers over a lifetime — not just for a one-time sale. Without distributors acting as middlemen, DTC brands don’t need to focus on creating massive quantities of inventory at the lowest cost possible. Instead, they focus on how they can overdeliver for their customers and make sure they are happy and loyal to their brand. Because of this shift in goals, DTC brands prioritize long-term relationships over short-term sales, and the strategy is paying off.
This customer-first attitude refers to the brand values and product quality DTC shoppers are looking for, but it also stretches all the way through the marketing funnel. Instead of using outdated, interruption-based advertising methods, DTC brands look for ways to seamlessly incorporate marketing efforts into the mobile environment. This means advertising only when there’s a natural break in-app use or gameplay, such as user-friendly offerwalls and rewarded ads shown between levels in mobile games. Because consumers can opt into these ads rather than being forced to view them, they’re in complete control of the entire process.
This method of consumer engagement is mirrored by the value exchange behind rewarded in-app advertising. Successful app developers no longer need to force as many ads as possible on their loyal users — instead, they’re able to allow users to choose from hundreds of offers and complete an action of their choice to receive rewards. Because advertisers only pay when a specified action is completed it’s a win-win for app developers, mobile gamers, and DTC brands.
According to Fab Dolan, Head of Marketing at Google Canada, “The brands that are winning are the ones that understand and own the fundamental interplay between experiential and transactional.” If direct to consumer trends are any indication, personalized experiences have become a hallmark of modern marketing.
Experiential engagement goes beyond personalized messaging or dayparting. The most successful marketing experiences actually add value to the daily lives of consumers. It can take many forms, including the following:
DTC brands like Function of Beauty and Gainful take customized experiences one-step further by using a personalized quiz as the entry point to the customer journey. Based on their responses, these brands formulate products with a unique blend of ingredients to help them achieve specific results. Unsurprisingly, this personalized approach is highly alluring to modern customers.
One of the biggest takeaways from experiential engagement is that starting the brand-consumer relationship off with a positive experience has significant long-term benefits. That’s why direct-to-consumer brands increasingly leverage cost-per-action (CPA) campaigns to target KPIs like quiz completions. These campaigns are especially effective in the rewarded in-app environment, where users are highly engaged and more likely to proceed with the purchase. Besides, what’s more positive than literally rewarding consumers for engaging?
Direct to consumer trends have already shifted the mobile marketing landscape and created a consumer base that prioritizes brand authenticity. As DTC retail continues to evolve, expect consumers to follow; it’s up to marketers to adapt and utilize diverse touchpoints and channels to maximize engagement. The future of retail will ultimately be decided by consumers, but with the right strategies, marketers won’t be far behind.
For more digital marketing insights, including how DTC brands can drive maximum ROI from their mobile strategy, contact Tapjoy’s mobile growth strategists today.