The direct-to-consumer (DTC) business model has skyrocketed over the last three years, as customer habits and technology evolved during the COVID pandemic and beyond. According to Paddle, 81 percent of consumers will make at least one DTC purchase over the next five years. Let’s look at seven hot DTC trends and several brand examples that direct selling companies can glean from.

1/ Growth of livestream shopping

Live shopping experiences are replacing written reviews as the trusted source of product opinions. Live shopping sales could make up 20 percent of all ecommerce by 2026, according to Influencer Marketing Hub. But it takes more than just clicking the “Go Live” button. You must also build a connection.

“Your audience cares about having an authentic connection with influencers more than you’d expect,” shared a Forbes article. “If they’re producing clearly fake ads, it’ll likely show in your engagement rates. Select an influencer who actually aligns with your brand and trust their creative input as you strategize a livestream campaign.”

You also need to understand where your audience is interacting with your content and what they expect from the different platforms. Social shopping allows customers to purchase on social platforms without having to go to a different website and navigate a checkout process.

2/ Customers care about sustainability

Customers have an increasing number of options of where they can spend their money. It’s no longer as simple as going to a local store and choosing between whatever is on the shelf. Today’s customer expects more than just good products. Sustainability and social responsibility are more important than ever.

A Talkwalker report for 2023 shows 82 percent of shoppers want brands to embrace sustainable and “people-first” practices. A Business Wire survey found 75 percent of Gen Z shoppers felt sustainability was more important than brand names. Sustainability efforts can take on many forms, such as transportation, reusable packaging, a remote workforce and even being transparent about business practices.

Women’s apparel company Aviator Nation manufacturers clothes in the United States in factories owned and monitored by its founder and has a lifetime guarantee on its products. Superzero produces a line of shampoos, conditioners, hair serum and hand balm in bar form, eliminating the need for plastic bottles. Its motto is “Super performance, Zero waste.”

3/ Don’t sleep on a store front

Yes, one of the core aspects of a DTC business is avoiding a physical store front, but as the cost of digital ads rise, brands are embracing the traditional brick-and-mortar. It’s more than just a place to sell stuff—storefronts can provide a physical connection to customers, allowing a real-time multi-sensory experience. DTC companies still have full control of their brand instead of being buried on a shelf next to many competitors.

“The DTC transition to a brick-and-mortar storefront is the opportunity to create an immersive brand experience,” said CMS Wire. “With the right design, personnel and training, the in-store experience can humanize a brand and create an everlasting impression on consumers.”

Veteran-founded Black Rifle Coffee had opened 18 stores by the end of 2022 and plans to grow to 78 by the end of 2023. In addition to a menu of freshly made coffee, stores are full of the company’s popular merchandise and ground coffee bags. The stores are part of the company’s commitment to employ 10,000 U.S. veterans.

Pop-ups and “ghost retailers” are other popular options. Third-party companies can handle design and construction, and even some daily operations, for retail locations.

4/ A people-first message

Because DTC brands communicate directly to customers instead of relying on traditional media outlets, customers expect a more personalized experience and a more humanized marketing approach. Customer profile surveys help guide customers to products geared toward their needs. Customized packaging, discounts for first-time customers, free trials and even allowing customers to try products before they buy, reiterate and reinforce this trend. The experience replicates having a concierge guide customers to the right products.

“If you want to learn more about your target audience, don’t be afraid to ask,” says ExplodingTopics.com. “There’s a reason why we’re seeing an uptick in customer quizzes to help pick buyers’ brains and deliver personalized recommendations.”

5/ Influencers starting their own DTC brands

While DTC brands search for online influencers to promote their products, top online influencers are creating their own DTC brands. It’s a testament to the power of leveraging loyal followings. Plant-based nutrition company Truvani was launched by Derek Halpern and Vani Hari of Social Trigger. Kylie Jenner’s Kylie Cosmetics was reported to have topped a $1 billion valuation in March 2023.

“This shift was inevitable as creators were bound to leverage their personal brands to capture larger monetization opportunities via ecommerce brands,” explained an article by HashTagPaid.com. “The success of fashion and television celebs in this space paved the way for the next wave of influencers to attempt to replicate similar success. As the influencer industry evolves, it’ll create new and exciting avenues not just for creators, but for established DTC brands, too.”

6/ Subscription pricing and memberships 

Getting loyal customers to order every month on an automatic basis is an obvious goal. The good news is that customers are getting more used to it. Even Amazon is diving into the subscription option with its Subscribe & Save feature, automatically showing shoppers how much they can save.

Flexible subscriptions offer options to skip a delivery; pause the subscription; or easily modify it. Enrolling in a subscription often comes with free shipping—something customers have come to expect with online ordering. Some DTC companies even offer a surprise monthly package, which typically comes with significant discounts. These can include different product combinations and monthly flavors or themes.

Dollar Shave Club, Birchbox and Chewy have become well-known DTC companies thriving with a subscription model. Customers can build their own product combinations catered to their needs.

7/ Product categories are expanding

The market is seeing more DTC companies across different product categories. According to DTCetc, some of the fastest growing include food and beverage, apparel, beauty, home and garden and pet supplies. Grocery and restaurant delivery service skyrocketed during the COVID pandemic, reflecting rapidly evolving customer preferences. According to BlueCart, the top two food categories with the highest ecommerce conversion rates are wine (13 percent) and chocolate (10 percent).

Last Crumb is a cookie brand with a “drop model” notifying customers when the next flavor cookies will be available for purchase. There’s a countdown clock on the website, building anticipation and creating an undeniable feeling of FOMO. Daily Harvest provides ready-to-make smoothie ingredients and works directly with farmers to grow nutrient-dense fruits and vegetables. Peloton is one of the most popular fitness DTC brands. While the cost of its workout equipment tops four figures, the core of the business is the service subscription model.

From the June 2023 issue of Direct Selling News magazine.

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Direct-to-consumer (DTC) companies succeed at the crossroads of agility, loyalty and authenticity. That’s why their content strategy focuses on building genuine relationships with customers who truly want to be part of the brand.

Today’s customers are used to buying directly from brands without the middleman of mass retail stores. The customer feels more catered to because they are. DTC companies can bypass the traditional PR firms and media gatekeepers and talk directly to customers. They turn push marketing into attraction marketing. They have complete control of telling their own story, and they can tell it many different ways through multiple channels.

“The benefits of DTC marketing are clear: through this direct relationship, these companies are creating strong relationships with their consumers, understanding them better and reaching a more specific, appropriate audience,” says Hubspot. “DTC brands eliminate the hassle of researching, browsing and choosing from hundreds of options, making shopping practically effortless.”

Building loyalty can require a multi-faceted content strategy focused on relationships, education and authenticity. Here are six effective approaches to glean from DTC brands.

1. Authentic Behind-the-Scenes Videos

Being genuine is the name of the game with behind-the-scenes (BTS) videos. These peel back the curtain and invite customers into intimate parts of the business, making them feel part of the brand. Successful BTS videos are more informal, personable and are often funny and humble—many often reveal some genuine struggles. These can include product manufacturing and teasing new releases; messages from founders and CEOs; casual in-office activities; live tours; and on-the-spot employee interviews. The raw nature of BTS videos creates a more authentic connection between DTC businesses and their customers.

Origin USA, co-founded by former Navy Seal and leadership trainer Jocko Willink, produces martial arts uniforms and durable workwear such as boots and jeans. Everything is sourced and made in America. Their motto is “Made in America. No compromise.” The company’s videos focus on accomplishments with sourcing and manufacturing high-quality products by American workers. They are often short, personable and to the point, showing the impact on local community and reactions to the quality of the products. Company executives and employees are featured in videos talking about the importance of revitalizing American manufacturing.

As a Marketing Revolution article pointed out, “You need to be authentic in what you promise customers. This means stating a clear mission, then following through on that mission. This will help customers feel like they’re not just buying a product but working toward a greater goal.” BTS videos are highly effective at communicating that message.

2. An Omnichannel Strategy

It’s never been easier to publish content in multiple forms to speak to different audiences. It just takes commitment to a strategy. Successful DTC companies often repurpose the same message or campaign for multiple platforms such as YouTube, Instagram, Facebook, Twitter and TikTok. Each channel has its unique way of attracting followers and encouraging interaction. Tagging products in Facebook and Instagram posts is still an effective approach for many DTC businesses, especially when the content is more natural and less “sales-y.” This strategy also helps companies focus on building the brand and connecting with customers instead of pushing products.

“An omnichannel presence ensures that when your target consumers choose to engage with branded messaging, your product or service is readily available in the moment; regardless of channel,” shared Marketing Revolution. “In addition to being available, marketers need to build connections with consumers through branding efforts that create lasting, loyal customers. This is why we have seen a shift in campaigns to emphasize brand over products.”

Another growing trend is being a guest or sponsor on podcasts. These typically have targeted, captivated and highly loyal audiences who trust the podcasters. It’s a great way for company founders and leaders to tell their story and attract customers. Many podcasters only allow sponsors from products and services they use themselves, increasing the authenticity of the relationship.

3. Be a Storyteller

One of the best ways to build a brand is the tried-and-true strategy of telling compelling stories. DTC companies have the flexibility to tell their own stories without going through the traditional public relations channels and media gatekeepers.

Away, a luxury luggage company, took preorders before launching and combined the strategy with the release of an inspirational book titled The Places We Return To. Founders Steph Korey and Jen Rubio interviewed more than 40 creatives for the book such as writers, artists and photographers about their travel experiences. It was sold along with a gift card redeemable for a suitcase. The initial product line was sold out before it released, and the company reached $12 million in sales in the first year.

“Storytelling is a central part of our marketing strategy,” Korey said in a Shopify blog. “We think about what stories we can feed to the press and to social media—things that make people take notice, things people want to share and talk about. You don’t push your product. You create things that are fun to talk about, to write about, to share.”

The company leverages social media to encourage travel or posting funny scenarios instead of directly promoting products. For example, asking followers to post a GIF of their favorite movie to watch on a flight, or a tweet explaining why you need 17 pairs of underwear for a four-day trip.

4. Short, Vertical Videos

Even with the growing trend of longform podcasts that can run for one to two hours or more, the most popular and engaging online videos are getting shorter and shorter. With the rise of TikTok and Instagram Reels, people are more used to watching vertically oriented videos on their mobile device. Behind-the-scenes, employee profiles, product demos and various user-generated content are some of the most effective for DTC companies. Combining videos with a short music clip or voiceover adds to the appeal.

Bombas is a social impact company that began selling socks and matching donations to the homeless and underprivileged communities. They have grown to include other essentials such as underwear and T-shirts. The company’s short social media videos include a “Three Good Things” monthly message focusing on accomplishments and the people positively impacted. Employee shoutouts highlight volunteer hours, and other videos even teach followers how to make their own “care kits” out of sandwich bags and travel-size personal hygiene products.

The mission is woven into the message of the content. Videos are authentic and unpolished, as if you took out your phone and started recording what you saw. They are in the moment, inviting and show their commitment to the mission.

5. Leverage Customer Content

No matter what business you’re in, your customers are online every day letting you know what they want by the posts they make and the content they engage with. Leveraging customer content takes the guesswork out of what you should create and builds stronger relationships with customers who are proud to represent your brand.

Popular customer content for DTC brands includes unboxing videos; product reviews; trying on products; encouraging hashtags to increase brand awareness; and sharing customer posts to continue the conversation.

“One of the tactics is to allow customers to test new products and then share their experience on social media before committing to a purchase,” according to an article by Profitwell.com.

Well-known DTC company Warby Parker noticed customers were taking pictures and videos of their eyewear, asking friends how they looked. The company started asking customers to post the content on social media with the hashtag #WarbyHomeTryon. Participating customers were paired with an online personal stylist. The company discovered that customers who shared content online were 50 percent more likely to purchase.

6. A Text Will Do Ya

According to Tech Jury, 75 percent of clients want to receive offers via SMS text, and Mobile Monkey says nine in 10 people open their text messages. Savvy DTC brands are utilizing texts more and more to send exclusive offers, welcome new customers or even send an impromptu thank you. Texts are often limited to 160 characters, so they’re simple to consume, and they make for a seamless mobile shopping experience. To enhance and entertain, consider adding images, GIFs or short video clips. Even restaurants are beginning to take orders via text.

Some DTC websites offer SMS as a lead-capture option, and customers are often sent a first-time purchase discount. The focus is on quick access to a discount or enrolling in a rewards club—no need to fill out a lot of forms asking for a bunch of personal information. Not all texts are offer-based. Some are personalized such as wishing customers happy birthday; thanking them for their recent order; and updating them on items they are interested in.

From the May 2023 issue of Direct Selling News magazine.

The post Magnetic Content first appeared on Direct Selling News.

The way we shop has changed dramatically since 2020. Direct-to-consumer (DTC) brands are reconfiguring the way we purchase everything from clothes to furniture to groceries to personal care products. In fact, more than half of U.S. internet users have already purchased from a DTC personal care or beauty brand with the entire industry projected to surpass $716 billion in revenue by 2025 according to commonthreadco.com.

While the pandemic accelerated this trend, it did not cause it. The emergence of DTC brands has been fueled by social media with influencer marketing and effective digital marketing strategies. A huge component of those strategies are customer referral programs. And there are many lessons for direct sellers within these programs.

Direct selling is built on word-of-mouth marketing. How those referrals are made continues to evolve as face-to-face meetings take a back seat. Sampling and referrals for direct selling still has a bit of an identity crisis—the methods aren’t as simple, intuitive and prompted as they should be. But by following the blueprint established by DTC brands, companies can set a successful standard for our channel.

The goal is for these customer-focused digital, mobile and social selling systems to be seamless and automatic. There are many benefits of successful referral programs, including:

• A lower cost per customer acquisition than traditional marketing efforts;
• An opportunity to organically increase brand loyalty and awareness;
• A chance to establish immediate legitimacy;
• Opportunities to cross-sell and up-sell.

To put it plainly, referral programs are so beneficial to direct selling companies because they work. According to getambassador.com, as of 2021, 74 percent of people say word-of-mouth is a key influence on purchasing decisions, and 92 percent of 18-34-year-olds actively seek out product recommendations prior to purchase. Referrals are especially powerful for health and wellness products because people have concerns about the efficacy and quality of products they consume.

Direct selling is inherently adept at leveraging word-of-mouth recommendations for products, but this also can translate to the opportunity. Crowd-source companies like Uber utilize referrals to recruit new drivers. Current drivers can refer a friend to join, and, once that friend completes a certain number of trips, both receive rewards. As traditional recruitment models in our channel continue to come under scrutiny, this option can be game changing.

These programs also provide a way for companies to stand out in a crowd and reinforce their brand’s mission and message, something that’s increasingly important to consumers. According to businesswire.com, 46 percent of consumers consider a brand’s social responsibility efforts when purchasing, and generational expert Jason Dorsey reported that Gen Z is particularly motivated by social causes. At Tesla, owners can earn awards when friends and family use their referral link to order select products. The brand emphasizes their commitment to sustainable energy through the rewards they offer, providing substantial discounts off solar panels and solar roofs.

Five things every direct selling referral program must do

Of course, your referral program should be as unique as your brand, but there are a few key elements that must be addressed across the board, regardless of product line, incentive plan or strategy. Here are five key elements every successful direct selling referral program needs.

1. Keep it simple, straightforward and streamlined
   A key component of a successful program is to make it frictionless and user friendly. The goal is to remove any and all barriers to making a fast, low-effort referral. One company excelling in this regard is Athletic Greens. They start the process instantly—providing an auto-populated text for referrals before customers even make a purchase. Referrers literally have to do nothing but provide an email address and click a button to share their interest with friends and family.
2. Incentivize, but know what motivates your customer base
   A/B testing gave AirBnB invaluable insights after they launched their referral program. Their initial offering was a cash reward to the referrer when their friend took a trip or rented out a home. They tweaked the messaging and rewards, discovering that engagement improved when the reward went to the recipient rather than the person making the referral. Now, the offer is gifting a friend $25 off when they book with AirBnB.
3. Manage your costs
   Giving cash rewards can be expensive—remember that there are all types of “currency” you can offer. Consider gifting under-performing SKUs or offer credits or bonus loyalty points redeemable in your online store (a simple way to drive traffic and gain revenue at the same time).
4. Spread the word
   A referral program is only as good as the buzz surrounding it. Promote yours through your home page, social media platforms, email campaigns, press releases and on your app. Make referral opportunities easy and hard to miss when interacting with your brand. And don’t be afraid to do something extra special and valuable for a limited time. Pre-launch, shaving giant Harry’s offered incremental rewards to people who were willing to refer their friends through email, Facebook or Twitter. The offer was simple: refer 10 friends, earn a free razor. Refer 25 friends, earn a free premium razor. Refer 50 friends, earn free shaving for a year. The promotion lasted a week and generated 100,000 leads.
5. Track and tweak
   Many companies keep their referral programs fresh by consistently updating their rewards and offers. Experimenting with new incentives and taking a deep dive into the analytics allow them to let the program breathe and become more impactful and appealing over time. Make sure you track the effectiveness of your program by using dynamically generated links and codes. And keep track of the following key metrics: number of new members generated; number of site visitors converted; number of referrals generated and on what channels; how many new customers acquired; and cost per acquisition.

Make the Rewards Memorable

It’s clear that incentivizing customer referrals is key to making these programs successful—that’s why virtually every brand offers some sort of enticement for making or acting on a referral. It’s imperative that your rewards offer something special to distinguish them from the crowd. Consider these factors when designing your program.

For the Referrer
“Membership has its privileges” was a legendary marketing campaign for American Express back in the ’90s. And that premise still holds true. These are your most vocal and passionate brand advocates—make sure the incentives you offer validate and reward that. Keep these four factors in mind.

Exclusivity
Tesla frequently tweaks its referral program, but one of the rewards it has offered in the past included entry to exclusive events or vehicle accessories that weren’t available any other way. What exclusive experience or limited-edition items can you offer to your most active referrers? If the reward is special enough, the desire to earn it could translate to a lot of leads.

Supplemental / targeted samples
Use your rewards as a way to introduce new or supplemental products that work cohesively with the products they are already ordering. Think an eye cream that works synergistically with a daily moisturizer or a new lipstick shade that complements their favorite nail polish or eye shadow palette. When your product samples are purposeful and tailored to the recipient, you are much more likely to increase sales.

Seasonal
You don’t want referrals to be a one-and-done proposition. Encourage continual engagement by offering seasonal items as limited-time rewards. A summer-y citrus drink flavor or anything pumpkin spice scented when fall rolls around helps keep your rewards program fresh, top-of-mind and relevant to your followers throughout the year.

Progressive (refer more / get more)
It’s easy to refer one friend—harder to refer 2, 3 or 10. Make sure the value of your rewards increases with the number of successful referrals and keep it as easy as possible for your advocates to track their progress. Basic Dropbox customers get 500MB of storage added to their account for each referral, up to 16 GB. The friend they referred also gets 500MB. They also have a handy status bar so customers can see how much they’ve earned t date—instant motivation!

For the Refer-ee
You’ve managed to get their attention with the help of their friends or family through your referral program. Now, what can you do to seal the deal and turn that lead into a loyal brand fan? Here are three guiding principles.

Sample
There’s no better way to turn a prospect into a customer than by letting them try the product Provide single-use samples of your best sellers that offer an immediate benefit or multi-day samples for products with incremental results.

Unobtrusive
It’s important to remember that these potential customers didn’t seek your company or products out. Respect their time and privacy by not bombarding them with constant or complicated communications. Keep your messages short, benefit-oriented and limited in number.

Unexpected
As a company, you should always strive to “surprise and delight.” Consider offering something unexpected, useful and branded with a customer’s first order. But make sure the item works synergistically with your products: a measuring tape so customers can easily follow your size guide; a reusable straw for their energy drink; or stirrer for their coffee.

Most companies in the channel have some sort of referral program, but many are unremarkable, underpromoted or difficult to use. Simply revamping your offers or messaging could give yours an immediate boost.

From the August 2022 issue of Direct Selling News magazine.

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The IAB recently released “Disrupting Brand Preference,” a study that shows that disruptor brand shoppers comprise 48 percent of all U.S. consumers. They are younger than incumbent brand-only shoppers, with 84 percent under 54 years old, and are likelier to have a household income of more than $75,000. In addition, direct-to-consumer (DTC) buyers use their favorite brands as vehicles for self-promotion, with twice as many compared to incumbent brand-only shoppers saying that they choose brands to express “who I am.”

One in every three DTC brand shoppers are part of a new audience group identified by the study called “Super Influencers.” These “Super Influencers” deliberately take time and effort to re-post and/or create brand-centric content to increase their own influence. The research makes clear that they are not sharing this content randomly. They are strategic and driven.

Other key takeaways from the study include:

• DTC buyers find brand value in their ability to contribute ideas and feedback to brands and gain heightened visibility through their sizable communities
• The “Facebook family” remains #1 for sharing brand attitudes—particularly by older, incumbent brand-only shoppers
• Disruptor brands build consumer loyalty—as well as lifetime value (LTV)—through cross-channel interaction
• Search, shopping, and social media sites together are nearly equal to traditional TV for brand discovery
• Influencers are the “advertising” of the modern consumer economy, and wield their greatest power during initial purchase consideration and further down the purchase funnel
• Disruptor consumers expect 24/7 omnichannel access

“Unlike many traditional brands, direct brands and those disrupting the disruptors, have embraced consumers and built community. Today’s consumer expects access and input into the companies they support,” said Randall Rothenberg, CEO, IAB. “This deeper relationship not only shows up in loyalty, but actually perpetuates two-way value for both consumer and brand—in the creation of self-as-a brand and building brand awareness through influence.”

“There is a tendency to think that the online social activities of younger consumers are incidental—frivolous. But they are not,” said Sue Hogan, senior vice president, Research and Measurement, IAB. “The differences between disruptor brand consumers and incumbent-only shoppers are stark. For disruptor brand consumers, social behaviors are calculated and deliberate, feeding their need for self-expression.”

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