Modern direct-to-consumer (D-to-C) brands, which tend to be digitally native, have cracked the code on the contemporary shopper. Through a unique combination of brand voice, value proposition and storytelling, these brands have created memorable, end-to-end experiences that resonate with consumers on a deep, emotional level. As a result, Forrester forecasts that online spending for D-to-C products will increase by 18 percent annually through 2022.
Despite their swift emergence and command over the digital landscape, many of these brands are experiencing growing pains as they mature, particularly when it comes to accelerating demand, building and maintaining customer loyalty, and translating their own customer data into long-term return on investment.
As such, these brands need to find creative strategies to maintain their core essence and emotional connection while scaling their footprint. Brands like Bark and Glossier are building partnerships in order to leverage each other’s audience. Others, like Casper, Away, and Everlane, have opened physical showrooms or permanent storefronts. Eager to scale, brands like Quip and Warby Parker are offering services to complement their standalone products.
D-to-C brands tend to be smaller and more agile, meaning they're more willing and able to move quickly and experiment in ways that traditional brands would never consider. This scrappiness is the reason why they're able to successfully improve their customer experience, optimize their feedback loop, and enhance product quality and innovation in much shorter time spans than their incumbents.
That mind-set is also the reason why the world’s e-commerce leader, Amazon.com, is fighting so hard for their attention. Amazon has spent more than a year recruiting emerging D-to-C brands and establishing private brands for its Our Brands collection, an initiative providing hands-on product and marketing support in exchange for exclusivity to the Amazon platform. Recent estimates suggest there are more than 600 Amazon-exclusive brands to date, including celebrity brands like Lady Gaga’s beauty line, which launched pre-orders during last year’s Prime Day.
So, should the broader and ever-growing pool of D-to-C brands consider experimenting with or establishing a presence on Amazon? Can they reap the benefits of the world’s largest e-commerce platform while still maintaining their own digital identities and seamless paths to purchase? The answer is yes. Here are three benefits of selling on Amazon that D-to-C brands should keep in mind:
1. Accelerate demand through full-funnel advertising.
As the cost of customer acquisition on Google and Facebook skyrockets, D-to-C brands are going back to the drawing board. For brands like Plated and ThirdLove, this means investing significant time and resources into top-of-funnel channels like TV and direct mail that are notoriously harder to track ROI from. As D-to-C brands mature, they need to leverage highly impactful channels that can reach customers at every step in the purchase journey, from awareness to consideration and eventual conversion.
Amazon is emerging as a serious contender for full-funnel advertising budgets. D-to-C brands can use Amazon’s recently launched Sponsored Display, which expands the reach of their ads to off-Amazon websites and apps, using digital advertising that's easy to create and manage. They can also retarget via channels like Facebook or Instagram to maximize their budget while enhancing market reach and driving relevant external traffic to their Amazon listings — an important tactic since Amazon is the top channel where consumers purchase from brands they discovered on Facebook.
Additionally, Amazon DSP allows businesses to programmatically buy display and video ads, reaching exclusive Amazon consumers across platforms like desktop, mobile and OTT, as well as Amazon-owned sites and apps. According to Feedvisor data, 74 percent of millennials visit Amazon at least once a week and are a highly valuable segment for D-to-C brands to get in front of. By tapping into Amazon exclusive audiences within different ecosystems, brands can build broad brand loyalty wherever their consumers may be.
All in all, Amazon’s advertising solutions support the omnichannel storytelling that consumers have come to expect from D-to-C brands. It's an essential platform for brands relying on a seamless sequential messaging strategy across devices and ad formats. Ads that infiltrate the consumer experience, often and everywhere, will help drive loyalty and brand engagement.
2. Solidify customer loyalty.
At this stage in the game, many D-to-C brands are focused on building — and maintaining — customer loyalty. Brands like Lola, Brooklinen, and Care/of are hiring dedicated marketing specialists to improve retention and increase the lifetime value of the customers they acquire. Now more than ever, it's clear that brands must prioritize the channels and audiences that deliver maximum ROI.
For the growth that they seek, Amazon is a channel that D-to-C brands cannot ignore. However, without a strategic approach, D-to-C brands can become insignificant in a highly saturated competitive landscape. By approaching Amazon with the right tools and expertise, D-to-C brands gain access to the most loyal, highly engaged audience in e-commerce: Prime members. Since 96 percent of Prime members are more likely to buy products from Amazon than other e-commerce sites, they're a massive untapped resource that D-to-C brands can and should leverage.
Still, more than half of consumers at least occasionally go to Amazon in search of products from specific brands, but less than half strongly agree they're satisfied with the number of familiar brands on the platform. Looking ahead, digital-first, D-to-C brands looking to enhance loyalty need to start by having a presence where their customers already are.
3. Use data to quantify brand health.
D-to-C brands are highly skilled at translating customer data into positive outcomes, and many have been doing more with less since their inception. Some D-to-C brands have grown up with little insight beyond Google and Facebook. As with any data set, the bigger the sample size, the more accurate the outcomes. D-to-C brands need granular understanding into how their customers are engaging with their products so they can evolve in ways that anticipate and meet customer needs. Currently in beta, Amazon Attribution is aiming to do just that — giving brands unique, on-demand insight into how each of its marketing tactics, from search to social media and video ads, all contribute to shopping activity on Amazon.
Amazon also rolled out a set of four new-to-brand (NTB) metrics aimed at helping brands identify strategies that can drive customer acquisition and efficient business growth on the marketplace. NTB metrics distinguish whether an ad-attributed purchase was made by a repeat customer or a “new” customer, which Amazon defines as someone who bought a brand’s product on Amazon for the first time in the last year. This, along with Amazon’s recent data clean room initiative, will give D-to-C brands a comprehensive understanding of the attitudes and actions of their target audiences.
As D-to-C brands continue to make waves across e-commerce, Amazon is a tool they must leverage to maximize their reach and better understand their audience. By tapping into the solutions and capabilities of the e-commerce giant, D-to-C brands will be in position to outpace their competition and cultivate audiences they may otherwise not, all while maintaining the unique digital ethos that catalyzed their success thus far.
Dani Nadel is president and chief operating officer at Feedvisor, an “AI-first” optimization and intelligence platform for large sellers and brands on Amazon.