Alexis DeSalva Kahler
Alexis is a Senior Research Analyst at Mintel. Alexis focuses on US Retail and eCommerce reports.

As more consumers grow comfortable shopping online for a variety of products, e-commerce sales become a bigger portion of total retail sales, introducing a slew of digitally native brands to shoppers. Many of these brands operate under a DTC (direct-to-consumer) model, cutting out the middle-man and finding ways to interact with consumers.

At the recent Digiday Direct-to-Consumer Forum, I spent the day interacting with a few DTC brands, such as Framebridge, Birchbox, Dagne Dover and Dollar Shave Club. Here are a few of my takeaways:

The in-store experience is still important

Despite the digital nature of DTC brands, many speakers noted the importance of physical stores, but for different reasons. The in-store experience is instrumental in driving brand awareness, providing tactile discovery, testing products and ultimately driving growth for brands.

For some brands, like Dagne Dover, offline partnerships with external retailers are a way to test and learn, informing future product decisions. However, it is important to consider the merchandising strategy when moving offline. Maintaining some exclusivity for online products and offering a different mix in-store provides a universal selection serving a wider range of customers. Brands and retailers exploring partnerships should ensure they do so in an authentic way to stay true to their brand identity and their customer.

The in-store experience also offers qualitative data that can be hard to garner online. Jewelry brand AUrate asks customers that enter their store how they heard about the brand, sharing their answers with the team. Consumers still crave the tactile experience as nearly half of consumers try clothes on before buying according to Mintel research on online shopping for apparel. The physical store serves as a place to discover and learn about products, regardless of how they’re ultimately purchased.

Birchbox thinks of the physical retail locations in multiple ways, rather than a one-size-fits-all mentality. Pop-up stores and flagships are different formats than traditional brick-and-mortar locations because they’re essentially used as a marketing tool. They allow existing and new shoppers to interact with the brand in a different and experimental way that can introduce them to or increase their brand interaction.

Conversational commerce

Customer communication takes many forms, but similar to partnerships, it needs to be approached thoughtfully and authentically. Brands and retailers need to be conscious not to put all their eggs in one social media basket. Utilizing a mix of customer communication will expand the reach and reduce risk associated with only interacting with customers in one medium.

Instead of making the customer choose between shopping online or in person, brands should find ways to be present where they are, regardless of the situation.

As seen in Mintel Global Consumer Trend, ‘Challenge Accepted,’ consumers are looking to connect with their favorite products and brands are looking for any opportunity to interact with customers outside of the transaction, possibly leading to more customer data and better loyalty. The Body Shop uses digital not just to showcase products but to elevate the experience for customers, featuring how-to’s, skincare routines and ingredient stories, fostering a brand-customer relationship that’s about more than simply selling products.

Customization is key

Many online purchases are replenishment driven and brands need to make it easier to repurchase, regardless of the basket size.

Consumers can be lured into initial purchases with new brands or products by curiosity or promotions, but enticing them to repeat the purchase or encourage loyalty can be more challenging. Third Love uses their loyalty program to incentivize repurchases, even if future basket sizes are smaller. The brand engages with customers in a more personal way depending on the shopper’s attributes. Based on information shared by the shopper, Third Love can determine the type of customer they are through a “fashion shop” and alter the conversation with the shopper depending on their persona. The result is a relevant experience encouraging more shopping.

What’s old is new again

It’s not about being present on a single platform or by interacting with shoppers in one forum. Despite the growing rise of digital interaction, traditional formats are still relevant.

Brands have to be where consumers are even if that means many ways and different places. Instead of making the customer choose between shopping online or in person, brands should find ways to be present where they are, regardless of the situation. Recognizing their shopping versatility helps brands to convey legitimacy and improves awareness and recall.

The same can be said for the approach to reaching consumers. Brands need to use a mix of methods for advertising and communicating and it shouldn’t be solely about social media. Out-of-home spaces like advertising on public transit and TV ads are still impactful as most consumers are researching and planning before buying, according to Mintel research on the path to online purchasing.

What we think

DTC is not a matter of online versus offline shopping; it can mean many things and take many formats. Direct-to-consumer is becoming the new way of not simply selling to but communicating and interacting with consumers. Although it often takes the form of e-commerce, in-person experiences are still crucial for driving awareness and growth and building loyalty in a continuously crowded landscape.