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Fast, reliable delivery options have become table stakes for today's brick-and-mortar retailers, thanks to Amazon. Now, they're also becoming an important part of these retailers' marketing strategies in the run up to big holiday sales days like Black Friday and Christmas. In the lead up to Black Friday, many retailers are dropping the minimum order value needed for customers to get free shipping altogether, or are giving their most loyal customers access to the fastest delivery and fulfillment options for free.
Under Armour, like many other brands that have relied historically on wholesalers to sell its product, wants to generate more revenue from its own website and stores. But, its direct-to-consumer business has struggled for a couple of reasons. In order to right the ship, Under Armour is looking to open more full-price stores, continue to highlight the technical innovation in its apparel and performance wear, and build a new e-commerce platform.
There's a rising supply of direct-to-consumer brands eager to hand over money to agencies to help them with their Facebook marketing. In the latest edition of our Confessions series, in which we offer anonymity in exchange for candor, we speak to a former marketer who cycled through several agencies -- ultimately landing at one that focused mostly on direct-to-consumer brands -- before going freelance.
While other retailers like Target and Walmart have consolidated the number of apps they offer in recent years, Nike has centered its app strategy around building a handful of apps to serve specifics audiences. There's Nike's main app, Nike+, to which Nike has added more features in recent years to make it easier to shop in-store. SNKRS targets sneakerheads with limited edition product drops, while Nike Train Club and Nike Run Club are marketed towards fitness fanatics who want an app to help them manage their workouts. In total, Nike has more than 170 million users across its family of apps.
More direct-to-consumer brands are experimenting with partnership marketing, in order to further diversify their marketing spend away from Facebook and Google. Although there are inexpensive ways to test out partnership marketing, it can take a lot of trial and error to figure out which brands are actually effective to partner with.
As livestreaming shopping videos have become increasingly popular in China, they've also become critically important to brands' strategies for the biggest shopping holiday in the country, Alibaba's Singles Day. Overall, the number of merchants who incorporated livestreaming into their Singles Day campaign was up 200% compared to last year, according to Alibaba.
Direct-to-consumer brands like to trumpet the fact that they have more access to customer data than traditional brands. Now, as they grow and add more products, they're also looking to launch loyalty programs that give them better insight into how their customers behave compared to traditional loyalty programs. Mizzen+Main, which sells mens dress shirts and pants, is launching a new loyalty program on Tuesday that it hopes will give the company more insight into when exactly its customers are looking to shop.
When handbag brand Dagne Dover launched in 2012, its products were only available for sale through its own website. But today, shoppers can find Dagne Dover bags for sale on Nordstrom's website, in Stitch Fix boxes, in select Apple stores, as well as some Equinox gyms. While Dagne Dover started as a direct-to-consumer brand, wholesale now accounts for just under 20% of its revenue. Founder and CEO Melissa Mash wants to keep it that way.
Walgreens is reportedly looking to go private, highlighting just how difficult it is for drug stores to remain relevant as a mix of big-box and online competitors encroach upon their retail business. Drug store chains like Walgreens and CVS generate a large portion of sales not only from medications, but also from sales of snacks, cleaning products, and other consumables -- often referred to as front store sales. But as customers are finding it more convenient and cheaper to buy these products from Amazon or other big-box chains like Target and Walmart, drug store chains have to give shoppers other reasons to buy more than just prescriptions from them.
As shoppers' email inboxes and Instagram stories have become cluttered with ads from direct-to-consumer brands urging them to get 20% off their new rug or sleepwear collection, newer brands are in search of new places to talk to customers where they aren't yet sick of hearing from brands. One method of communication that's starting to become more popular: text messaging.
Direct-to-consumer brands were born out of the idea that the Procter & Gambles of the world weren't doing a good job anymore of addressing consumer needs. Now some of them want to become the next Procter & Gamble.
Direct-to-consumer brands are starting to invest more in traditional advertising channels, like billboards, television and direct mail as consumers' inboxes or Instagram feeds are getting clogged with ads from competitors. Brands who spoke with Modern Retail say that direct mail is proving to be a small, but useful part of their marketing mix to reach a select group of high-intent customers.
Over the past year, weighted blanket brand Gravity Products has started to partner more with brands on product collaborations in order to lessen its reliance on selling directly to consumers. Today, Gravity announced that it's partnering with DTC mattress brand Purple on a product collaboration. CEO Mike Grillo said that partnerships now make up nearly 18% of Gravity's revenue, up from 2% last year.
As legacy retailers struggle with what to do with their large store footprint, there's a growing industry of retail-as-a-service companies that are pitching them on software and services that they say will help them make better use of in-store space.
As Amazon's grocery ambitions grow, it's turning to familiar tactics to get a leg up, particularly in the delivery space, by trying to make its services as cheap and convenient as possible compared to competitors. Amazon's grocery delivery offerings are currently split between two different types of services, and compared to its biggest competitor, Walmart, it offers delivery for fresh produce in fewer U.S. cities
In its early days, being direct-to-consumer meant lower prices. Because there was no middleman, so the theory went, companies were offering better quality goods at more competitive prices. But as the industry matures, there has been a shift away from branding DTC products as the most affordable alternative to traditional retail shopping for personal products. The strategy to offer “no markups” was integral for the success of Warby Parker and Everlane, among others when they launched a decade ago. However, that’s no longer the case, as evident from a new crop of luxury DTC brands that are looking to duplicate the model’s biggest success stories, in diamonds, luxury fashion and more.
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