Why the many channels available directly to the consumer are revolutionising the way we present our brands.
The internet has completely revolutionised the retail space. With e-commerce now accounting for more and more sales, it is estimated that around a quarter of the world’s population are online shoppers.
This wild increase in direct to consumer (DTC) sales is down to the many avenues and channels which have opened between businesses and consumers. Whilst certain retail giants like Amazon still dominate the market (£26.48 Billion in UK sales for 2020), there are also numerous success stories of businesses on a much smaller scale, some even run from people’s homes, that have capitalised on the channels the internet offers them to connect with consumers.
The global pandemic has only increased the power that online retail has to disrupt traditional channels, with some online retailers in the UK reporting a 52% increase in website traffic during lockdowns.
In our previous post, we talked about how B2B model businesses could capitalise on these new channels to consumers by adding a DTC element to their business.
Selling direct to the consumer has the potential to increase brand control, drive innovation and allows greater access to consumer data to redefine the potential marketing has in a business.
So how do we stand out and connect with consumers and customers in an already crowded marketplace?
The answer is of course, marketing. However, this blanket term is an oversimplification of a complex and nuanced discipline.
There are important distinctions to make when considering marketing to a consumer against marketing to a business. These will need to be carefully considered for B2B businesses that are adding a DTC channel, without disrupting ongoing relationships that have taken time and trust to build.
As we previously established, the need to carefully separate the concerns in order to maintain established relationships with other businesses is key to success in a business to many (B2M) model.
To understand the distinctions and nuances of marketing, we will look at why we market products and services, the various ways in which we can do that, and the differences in B2B and DTC marketing that should be noted.
What is Marketing?
Of course, the end purpose of marketing is to drive sales, but marketing actually does a lot more than that for a business. That’s because there are many different ways to drive sales, from increasing brand awareness, to specific product offers and discounts and even customer retention.
Many elements play a role in successful marketing, and as the internet has revolutionised the commerce industry, it has also revolutionised the marketing world as well.
Social media and content writing have both boomed in the marketing sector in the digital era, and understanding the various platforms and how they can drive growth in different areas of a DTC channel is imperative for successful marketing campaigns.
Types of Marketing
We’ve spoken about how marketing has different aims dependent on desired outcomes. Marketing is about targeting consumers, but with a wide range of DTC business channels available, the desired outcome of a marketing strategy will define the different channels a business uses to control their brand.
Brand awareness is defined by the recognition a consumer has of a business, their branding or their products.
Businesses with a high level of brand awareness are much more likely to sell their products in higher numbers.
A great example of the power of brand awareness can be found in the soda giant Coca-Cola.
Taken in isolation, their flagship product is almost indistinguishable from some of their competitors (though a die hard fan might argue that!). This means it is their branding that is the primary force in their dominant market share.
In fact, brand awareness for the Coca-Cola business is so strong that it acts as a potential barrier to the marketplace for competitors looking to challenge them!
Some (but not all) of the traditional marketing methods are becoming outdated. A key factor in this is content marketing, which now plays a vastly important role in attracting consumers to a particular business in an extremely populated e-commerce space.
Content marketing is about connecting consumers with consistently valuable and relevant content to retain or increase sales in a particular consumer market.
It is important to understand that content marketing is not simply pitching products or services, but instead, is about producing information and content related to the product, service or brand.
Content marketing has a number of benefits to it that make it one of the most important ways of connecting with consumers in the modern e-commerce space, including increasing brand awareness, sales and solidifying customer retention.
Growth marketing is, as it sounds, about driving growth in your business. Of course, this seems an obvious outcome for a marketing campaign, but specifically, growth marketing focuses on using data to drive engagement in a particular area.
Growth marketing involves conducting experiments and researching to improve results in a specifically targeted campaign, whether that be customer retention and acquisition, or optimising a User Interface flow. It can be applied to almost any area of a business but crucially, it’s about using data to drive and achieve results in the target area.
Newly established businesses may want to focus on other types of marketing before using growth marketing in their business, as a new brand is unlikely to be able to collect sufficient data to drive analysis with relevance.
Performance marketing is another area which has seen exponential growth since the popular adoption of the internet. It refers to marketing where advertisers only pay when a certain action happens.
A great example of performance marketing is a google ads campaign, where businesses operate on a pay-per-click basis, meaning it is performance assessed.
Similarly, the social media titan Facebook (who also owns Instagram) offers a number of different performance marketing options on these two platforms, giving us an indicator of how we can use performance marketing for either specific products, generating brand awareness or consumer acquisition.
The distinction between B2B and DTC Marketing
Established B2B businesses are experts at targeting particular industries, as is the established practice in B2B marketing, and must focus on appealing to businesses rather than to individual consumers.
Although there are crossovers in the outcomes we desire from B2B and DTC marketing campaigns (customer acquisition and retention, brand awareness etc.), there are also differences in how we market to businesses vs consumers.
The primary difference in B2B marketing vs DTC marketing is the immediacy of the effect a campaign can have.
In agreeing a transaction with a business, there are usually at least 2-3 people involved on the side of the purchasing company. This means in B2B marketing we are looking to appeal to a group of people, not just one person. Furthermore, a business will take time to reach a consensus on a purchase, especially if responsibility for the decision spans multiple departments (accounting and marketing for example).
So when we establish a DTC marketing campaign, it must be understood that the appeal is towards an individual, with more immediate purchasing potential than when marketing B2B.
The consumer is unlikely to have to consider the purchase decision with a group, rather, they are guided by their own desires as an individual. Likewise, consumers who are browsing for a product are more likely to be in a position to purchase immediately.
This means we must use the various avenues available to communicate with the consumer in a different way to how we would appeal to businesses.
Precise Marketing in a DTC digital era
Social media and content marketing are the two newcomers to the world of marketing and both can be used to produce a number of different positive results from a direct to consumer campaign.
In the UK, the average user spends around 110 minutes per day on social media platforms, making them prime channels for communicating in a DTC business model.
Social media can build Brand Awareness, through influencers and product placement. It can also be used in Performance Marketing for specific products or for lead generation, and the data it is possible to collect allows the use of Growth Marketing campaigns in the future.
Content Marketing has similar benefits, especially when applied in the context of a consumer looking for information for a product or service related to the content being provided. Quality content drives brand awareness, increases lead generation and improves customer retention.
We have also already spoken about how search engines and social media allow businesses to utilise Performance Marketing strategies and the data they produce is essential in Growth Marketing analysis.
What is most important is that we understand when, where and how to deploy these strategies in a precisely targeted campaign for maximise results.
WQA provides supercharged digital product development for growth driven companies around the world. Working with Startups, Scale-ups and Enterprise, we design, build and scale digital products, experiences and platforms used by millions of people.
If you want to learn more about how to increase your brand and customer base through DTC marketing channels in a digital space, you can chat to us or email us for a conversation and assessment of your unique digital context.