The D2C, Direct to Consumer, evolution is often touted as a state-of-art frontier in digital marketing, blessed with profitable and equitable disintermediation. Although truthfully, the very nature of their business models demands the highest levels of brand-building, as customer acquisition must rely heavily on pull and not push. In fact, the curation of a powerful D2C brand must combine the best of age-old and new-age skills, ideal for refurbished advertising agencies seeking a fresh revenue stream.
We know by now that D2C brands by definition eliminate the ‘selling’ intermediary, whether online or offline, and this includes the entire continuum from the kirana to Amazon. This certainly leads to protection of margins and the ability to build undisturbed one-on-one relationships with a focussed customer base. Relationships are usually built on digital channels and the loyalty of consuming communities becomes a key adhesive for growth. But then, it is plainly true that the source of trials for new brands is invariably the supermarket or aggregator, through trials and price offers, and this is an advantage that D2C brands voluntarily forfeit, thus increasing the pressure on their own organic channels.
Thus, what is otherwise a significant advantage in terms of profitability leads to a considerable handicap in the quest for acquiring customers, especially if the range is more of a mainstream than a boutique offering. Those familiar with Naomi Klein’s work ‘No Logo’ will identify with the Fair Trade movement and its influence on D2C thinking and this may well be an advantage for niche brands, which have resounding purpose and differentiated credibility. For everybody else who chooses this route, a significant investment in brand building, albeit in a modern way, is necessary in order to make it a chosen destination and not just part of a consideration set. Unlike brands in the conventional intermediary route that can rely on performance marketing and push strategies at the expense of high-intensity brand creation.
This is exactly why the D2C sector can become a golden goose for traditional agencies that have invested in competent digital skills as well. The first step in building a D2C brand is a serious investment in customer centricity, which leads to a focussed value proposition and compelling purpose. It must make ample sense for the chosen TG and the response numbers must exceed traditional direct marketing metrics, for this is a zero-miss scenario. Millennials thrive on this socio-cultural affiliation and this must complement the solidity of the product values, clearly the familiar hunting grounds of advertising agencies. Only when this part is suitably handled can the digital presence and conversation strategy be developed and do not be surprised if traditional print and TV are commissioned to ensure suitable reach, subject to the VC’s kindness of course. Thus leading seamlessly to a full-funnel approach, capturing the customer at his specific geo-location in the journey and not just a common starting point.
Thus, D2C brand strategies must enlist the most of traditional skill sets across the communication spectrum — each handing over the baton to the other in perfect unison. The classical brand development approach followed by amplification, highly targeted digital engagements customised for stages of customer evolution and followed by a clear transaction, which commences the business relationship. This will need to be supplemented by state-of-art CRM operations, to ensure both the lifetime and testimonial values of the customers as the chain increases in both depth and width, clearly the most vital element of the D2C Loyalty Cycle. From a helicopter view, the finest ingredients of advertising, direct marketing, digital marketing and sales promotions must converge to successfully eliminate the intermediary and reward the creator.
A simple, albeit simplistic, way to fathom the difference between D2C and traditional brands is to distinguish between a restaurant that is present on Swiggy and one that is not. Those in the former category benefit from customer discovery techniques, featuring for example amongst a whole list of biryani offerings, or being able to participate in push-based promotional offers. The restaurant that goes solo relies entirely on its organic pull, inbuilt reputation and the ability of current customers to spread the word to the like-minded, most certainly saving on aggregator commissions but equally definitely absorbing the acquisition pressure. D2C brands across categories clearly belong to the second category and while the rewards are attractive, the challenges too are scathing.
It is plainly apparent that this is a glorious opportunity for traditional agencies that have developed digital acumen, as brand building is clearly their patent strength. I would strongly recommend a customised D2C agency offering that integrates the elements mentioned above, which could be a point-in-time kick-off service or an ongoing integrated relationship, with real value clearly resting in the latter. This opportunity can well be termed Dare to Conquer, an appropriate version of D2C for the advertising industry at the present time.
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