The retail industry is facing an extraordinary challenge. Stay-at-home orders in March drove consumers online, and retailers worked hard to meet the demand for stay-at-home staples, including athleisurewear and electronics. At the same time, retailers worked diligently to keep their own employees safe, whether that meant closing stores or shifting schedules in the warehouse to allow for social distancing. As states across the country begin to lift restrictions, one thing is clear: retailers must stay agile to quickly adapt to changing customer demands.
In February 2020, as some parts of the world started to experience the impact of COVID-19, Rakuten Advertising conducted a study around U.S. consumers’ preferences for and perceptions of direct-to-consumer (D-to-C) brands. The goal of the study was to determine what consumers were buying from D-to-C brands, why they were buying, and what types of content was influencing their purchasing decisions.
Despite these uncertain times, there are a few key findings that ring true from this data, especially as D-to-C marketers look to successfully navigate the road to recovery. Taking a deeper look, we see that what a digital-native brand brings to consumers — ranging from offers to engagement and creating a personal connection — are all critical to success. Below are three ways D-to-C brands can apply these findings to their marketing strategies.
Creating a Physical Experience Without a Physical Presence
Despite being known as digital-first generations, Gen Z and millennial shoppers still enjoy the in-store experience. Overall, the research found that 68 percent of consumers are excited to see D-to-C brands at a physical store location. For millennials and Gen Z, that number increases to 73 percent and 81 percent, respectively. With increasing (and ongoing) public health concerns, however, creating an in-store or in-person experience is near impossible today.
For brands that can’t currently offer in-store experiences, consider including more product videos, enhanced virtual shopping experiences in-app, and mailed samples. From beauty products to mattresses, consumers often want to touch and feel a product before they buy it. For example, offering free samples can happen anywhere in the buyer journey, from mailing a sample before the consumer makes a purchase to adding a free sample to an order.
Leveraging Offers to Benefit the Consumer … and Your Brand
Our data showed that price is the No. 1 motivation for consumers to buy more from a D-to-C brand across categories, from beauty and personal care to men’s fashion. Rakuten Advertising also found that millennials and Gen Z cite promotions and discounts as the No. 1 and No. 2 reasons to follow a D-to-C brand on social media, respectively.
While having too many discounts can dilute brand value and reduce brand revenue, the right offer in the right hands at the right time can be a key strategy in incentivizing brand loyalty — from free shipping to BOGO. As retailers look to recovery strategies, offering data-driven and personalized promotions can be a significant component to your marketing strategy, whether converting new customers or enticing returning ones.
Meeting Your Audience Where They Are — Social Media
With so many uncertainties today, the most important thing brands can do is maintain an authentic presence with their audience. One of the best ways to do this is through social media. Our research found that 60 percent of consumers follow a D-to-C brand on social media, and that 80 percent of all people who have purchased from a D-to-C brand recall seeing or hearing about those brands on social media. That means that retailers that want to stand out must find their voice on social.
For those that can afford to, this also means shifting spending toward the content and social channels that their primary audience is engaging on. With the diversification of publishers, this has become easier than ever. For example, advertisers can promote their brand with an influencer on Instagram or on a content-heavy platform like BuzzFeed. For those that can’t afford to spend on advertising, social can still serve as an inexpensive (even free) way to share key information about a brand. The key to this engagement is staying true to the brand, and embodying the attributes of honesty, integrity, curiosity, and a desire to both learn and educate.
Over the past several months, the retail industry has seen dramatic and rapid change. For D-to-C brands that are born disruptors, however, uncertainty in the market doesn’t need to mean uncertainty for business. By leveraging these findings and the strategies discussed above, the road to recovery can be a quick one.
Julie Van Ullen is the U.S. managing director of Rakuten Advertising, one of the world’s leading internet service companies, empowering individuals and businesses around the world.
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