4 Tips to Help DTC Brands Win Market Share

Recent research found that 81 percent of U.S. consumers will make at least one purchase from a direct-to-consumer (DTC) brand within the next five years. This form of selling directly tackles consumers’ biggest problems with the traditional retail experience, which range from inconvenient travel time to information dissymmetry and unpleasant negotiations.

Companies like Shopify have leveled the playing field by lowering the costs of setting up a website and selling directly. And on that note, product margins have fallen as online consumers are more picky about what they're willing to pay because they can quickly compare prices from multiple companies.

However, the ease of entering the DTC space also makes competition fierce. To differentiate themselves, companies must tap into their marketing strategy playbooks and identify key tactics to capture online consumers and help their brands survive. Use these four steps to carve out a niche that will help your business survive and thrive:

1. Perform a reconnaissance mission of your customers’ pain points.

Drill into a key pain point your customers have. This will likely take some time and provoke discussion, but it will promote radical clarity about what your customers need.

For instance, shopping for eyewear traditionally involved consumers being able to try before buying, a practice rooted in the fear of choosing the wrong style. By zooming in on this truth, Warby Parker developed a new DTC strategy of making the return process as painless and risk-free as possible — and facilitating at-home try-on.

This kind of probe into the consumer mind will enable you to innovate beyond what you thought possible — and beyond your competition.

2. Assess and strategize how and when to enter the DTC market.

Doing nothing to make your company part of the DTC industry could easily result in a long, downhill slide for your business.

Increasingly, consumers are looking for flexible, easy solutions to make their next purchase in a way that's convenient for them. More and more often, DTC offers this solution. Whether you're starting a new business or already have one, consider the moves your company should make to meet these customer expectations.

Some industries — and segments within them — make the transition more quickly than others. The automotive manufacturing industry, for instance, has been slow to shift. Franchise laws that protect car dealerships deter established manufacturers like Toyota and GM from direct sales. However, car dealerships are pioneers in online marketing, and new manufacturers like Tesla operate solely in the DTC space.

Determine where your industry and segment is, and get the wheels in motion sooner rather than later.

3. Commit and make it everyone's mission.

Chances are that your DTC strategy won’t succeed without everyone’s buy-in. You need your team to be on board to make a smooth transition into this space.

While it was traditionally a clothing manufacturer focused on wholesaling to retailers, Patagonia championed its team to make the shift to DTC. As a result, it transformed its brand and business model, and now captures a significant portion of sales from its online store and retail locations while still maintaining a strong presence in its traditional wholesale retail network.

4. Don’t be afraid to get your hands dirty.

This isn't the time to call in "the consultants." Personally speak to your customers and front-line folks to really understand what's important to them. Even if DTC hasn’t arrived in your industry yet, it’s inevitable that startups and your competitors will change the way things operate. Knowing your customers and the potential challenges of a DTC shift better than anyone else will give you a level of insight that no one else can provide.

Ten years ago, it was inconceivable that customers would order home-delivery meal kits instead of going to a grocery store or restaurant. Now, services like Blue Apron are transforming the food industry to make meal prep easy and fun without the worry of missing an ingredient or throwing away food at the end of the week.

Where are you positioned in the DTC channel? Whether you've made the jump or are about to, it's never too late to evaluate your strategy and focus. Use these insights to help you implement an effective strategy to survive and win the war for customers.

Dave Pributsky is the head of marketing strategy and business development at 2920 Sleep. This customer-centric online retailer provides consumers with high-quality products that improve sleep quality and overall health while minimizing environmental impact. 2920 Sleep is a proud member of 1% for the Planet.