5 Things to Look Out For When Selling Direct-to-Consumer - Fashion Biz

5 Things to Look Out For When Selling Direct-to-Consumer

A Bellwether Insight

Photo: Nathan Dumlao
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Direct to consumer, or DTC, has been a buzzword in the fashion world for the last few years. The chic packaging, the fully branded social accounts…we practically bought a new bed-in-a-box every year just because a friend DM’ed us being like “this changed my life. 4 real. NOT kidding.” While we still have bags under our eyes the size of that weird Chanel hula hoop bag, we have learned a few things from this DTC revolution—from the start-ups to the bigger brands that dropped large retailers and went back to strategies of selling directly to their customer.

Data is the new black

The beauty of controlling more steps in your process means you have more opportunities to collect data. You capture all the data of a customer when they are shopping. Track everything you can through the ads you run, the social accounts you have and the website traffic you get. Analyze the type of customer coming, where they are going on your site, how much time they spend there and more.

For in-store, you have the ability for employees to visually track their movements and attitudes and give feedback to your company. Then, you can see how the two marry each other and adapt your marketing, customer service and sales process to be a better fit.

Take our Distribution & Brand Image course to learn more about how you can distribute your product and how it affects the perception of your brand and day-to-day operations.

Customer Acquisition is the pits

While you have the luxury of calling the shots when it comes to advertising, promotions, marketing and more—you also have to pay for all that. It’s very expensive to acquire customers, and it’s often helpful for brands to leverage other retailers to spread out those costs. You’ll want to develop a comprehensive budget and continue to track all your outreach closely so that you have a healthy return on investment.

Learn from other DTC companies, and do a double take when you hear some outlandish revenue numbers from your comps. They might be raking in some serious dough, but they could also be spending 3x that on customer acquisition. This is also where you’ll want to constantly reassess your brand image, do a brand audit, do another SWOT analysis, analyze your market and your comps. Make. Your. Message. Authentic. And different.

Don’t forget you are still in an omnichannel world

By only selling to your consumer in a place you own, you may be missing out on other channels that customers use to shop for products. Research will need to be done to see if your customer uses a channel you do not currently sell in. This will help achieve a more omnichannel approach.

If you need to, look for creative ways to engage a retailer, while maintaining the consistency of true DTC biz practices. Start small, find a retailer in a key market that you can work with more intimately to keep the brand voice consistent.

Lots of followers doesn’t equal community

The buzz around DTC has largely revolved around the sense of community that the digitally-native direct-to-consumer companies of the 2010’s achieved. Selling directly to your customer means the touchpoints aren’t spread out over multiple voices, and you get to engage with a customer one-on-one more often. You are able to build a relationship more effectively than just having your product in a retailer.

Couple that with great customer service, a best-in-class sales process, beautiful packaging and after-purchase re-marketing, and you have a recipe for the coveted social commerce approach. This is where social media influences the purchase decision. Essentially, customers are influenced by other customers, and the conversation revolves around the lifestyle of the brand. This is a very effective method to creating customer loyalty, and often leads to more repeat purchases. Provide a space on social channels for customers to do this, and provide a reason for them to do it with your product, service and experience.

DTC doesn’t make you ‘immune’

If COVID has taught us anything, it’s that no one is immune in a crisis. When store closures happened and everyone jumped to online, it meant a boom for digitally-native DTC brands. However, there was a dip in consumption (outside of essentials and people stock-piling) when the pandemic hit. Plus, our lives had to adapt, and some DTC brands saw hits because they weren’t en vogue like sweatpants and tie-dye was.

Even before the pandemic, the trend of physical to online shopping was present. Again, that doesn’t necessarily mean more sales for your online e-commerce. You still have to compete, develop an authentic and unique brand image and find ways to keep your costs down while acquiring customers. You are never immune from changing market conditions (even when they play in your favor in the short-term) the same way you aren’t immune from moments of crisis.

Take our Distribution & Brand Image course to learn more about how you can distribute your product and how it affects the perception of your brand and day-to-day operations.