There are few better ways of minimising costs than offering products straight to buyers – and it seems brands increasingly agree.
Survey’s suggest nine-in-10 plan to launch their own direct-to-consumer channel (DTC), and at least 23 aim to do so in the next 12 months.
But the value of DTC goes beyond its profit-boosting potential. While the rewards of cutting out stores and retail partners can be considerable – see Huel, the powdered food brand soon tipped to reach £45 million in annual turnover – going straight to the source also allows brands to simplify consumer journeys and forge closer relationships.
Success, however, depends on authenticity. Vital to the lure of DTC offerings is uniqueness; consumers are drawn to individual brands that connect with their specific needs and values. So, when it comes to experience, every interaction must be personally meaningful.
The question is – how can brands consistently achieve the personal touch?
Discovering your own data goldmine
The first step towards better DTC experiences is harnessing the assets brands already have at their fingertips. Streamlining the supply chain provides more than simply a chance for independent companies to compete with large corporations; it also offers access to precious data. Because they deal directly with consumers, information about purchases, preferences, and habits flows into their own insight pools, instead of filtering down in fragments from interim partners and stores. As a result, they have a wealth of high quality, first-party data that can be used to gain deep understanding of customers and prospects, and inform marketing and sales strategies.
Utilising machine-mined intelligence
By far the most efficient tool for unlocking the valuable insight data repositories contain is artificial intelligence (AI). More specifically: sophisticated analytical platforms powered by AI subsets, such as machine learning (ML). Contrary to expectation, the main reason for this isn’t the high-speed, large-scale processing ability of smart platforms – although it’s worth noting ML initiatives have driven a 90 percent reduction in analytical run time. It’s the capacity of ML platforms to autonomously learn from experience and make fast, informed decisions. From a DTC perspective, this means ML can pave the way to delivering exactly what their customers want: authentic experiences with real-time relevance, and personal resonance.
Fuelling creativity with data smarts
The best-known use of ML as a driver of personalised interactions is dynamic creative optimisation (DCO). Essentially a smart matching process, DCO involves evaluating several data sources – covering contextual, demographic, and behavioural information – against varied creative elements. Its main aim is establishing the best blend of imagery, format, and background for specific consumers, in line with their unique attributes, such as individual preferences, location, language, activity, and progress along the path to purchase. For example, if a returning mobile site visitor is scrolling through product reviews and has previously viewed explainer videos, it’s likely a short-form testimonial video will be the ideal fit.
Understanding the optimal format to deliver your brand message to the consumer so that it is relatable is another consideration for brands that are taking the DTC plunge. Video advertising has become a key focus for a number of organisations, with an estimated 26 percent of the total video ad budget in the UK to be spent online. The ability to use data-driven insights to deliver these creative and personalised ads to consumers at the right time will help develop positive associations with brands and provide a competitive edge.
Deepening bonds over time
A combination of digital formats such as display and video ads, delivered to the consumer at the most relevant times, and including content based on detailed audience data, will help build brand awareness and consumer relationships in the DTC sector. By collecting insights about which strategies, message types, and offers work, brands can continually optimise interactions to ensure relevance increases over time. All of which will steadily strengthen the direct bonds between consumers and brands, driving lasting loyalty and value.
DTC is certainly proving to be an effective means of minimising journey friction and standing out in an increasingly competitive market. But to ensure consumer relationships stay close and profitable, brands must ensure the experiences they provide are personal enough to keep individuals hooked; and that calls for machine-powered intelligence. Only with a combination of AI-fuelled analysis, tailored messaging, and creative communication can brands maintain a direct line to consumers who always come back for more.