Traditional Fashion and Apparel Brands Play Catch Up to D-to-Cs

Direct-to-consumer (D-to-C) businesses exploded in 2019. There are now almost 400 D-to-C brands in the apparel and accessory market alone. As D-to-C momentum reaches full swing, traditional retail fashion brands like Nike are jumping on board in a big way. For example, Nike estimates that its D-to-C sales will reach $16 billion in 2020. Other merchandisers that traditionally relied on retail sales now look to emulate this D-to-C strategy to keep pace with innovative competitors and break off a piece of their market share.

For retail brands hoping to emulate the success of Nike, the key to making a transition to D-to-C is the growth and care of first-party data. In fact, 36 percent of executives said increasing the quantity and quality of first‐party data in their databases was crucial for their brands. Brands that want to increase D-to-C sales in 2020 should consider the following tips:

1. Build a single customer view from online and offline data. Building a D-to-C strategy starts with unifying all your data to create a single view of the customer for marketing. Ownership of your customer data is what sets you apart from brands that sell through traditional retail channels. However, all of this data is likely scattered across different systems — e.g., e-commerce platform, email marketing platform, CRM platform, to name a few. Getting all the data into one place gives you the ability to segment and activate this data based on a single source of customer data truth. RAEN Optics uses dynamic shipping messages based on location, time of day, and products the shopper has shown interest in to create a sense of urgency and complete the purchase.
2. Collect data with consent. Consumer privacy must be at the forefront of every marketing strategy. Gaining and monitoring consent is now a pivotal part of modern customer relationship management. But the truth is, brands that do consent correctly can use it as a critical advantage and build better and stronger customer relationships. When customers opt in to share information, they're entering into more meaningful relationships with brands, and they're more likely to respond and engage in positive ways. A strong consent management policy often results in more robust first-party data collection and better customer relationships.
3. Create a value exchange for both parties. A woman may be a loyal wearer of Levi's jeans, for example, but never makes a purchase directly from Levi's. How can Levi's identify this customer and reward her for her loyalty? Unlike retailers, which can collect customer information through transactions, retail fashion brands must work harder to collect first-party data. Rewards programs, “early access” tips and incentives can inspire customers to visit the brand website. If the service or offer is appropriate and valued, customers are known to be willing to provide personal information to brands.
4. Ensure rapid response with the right recommendations. Artificial intelligence (AI) and machine learning help brands be more responsive to their customers in the moment. Brands that engage customers in apps, with email content and online can use AI to automatically and immediately target customers with relevant offers based on behaviors and specific attributes. Marketers use real-time behavioral data and resulting segments to identify and re-engage prospects and customers, suppress recently engaged individuals from acquisition campaigns, and deliver special offers to loyal customers.
5. Bolster look-alike targeting. Brands can build separate segments of “high-value item purchasers” or “frequent purchasers,” for instance. Both types of customers spend with your brand, but in different ways. Understanding their differences can help you better find new customers who look and act like them. You can also feed that segment data into a data management platform to conduct look-alike targeting and reach new audiences who might have similar interests or purchase patterns, but haven’t previously bought your product.
6. Unify and activate first-party data. Once brands have collected (with consent) this first-party data, it’s time to put it front and center in their marketing campaigns. As brands look to engage directly and build loyal customers, how they manage first-party data is key. This is done on the back end, with marketing technology such as customer data platforms (CDP). A CDP helps brands unify and activate on all the first-party data that they have collected.

For fashion and apparel brands that are looking to increase revenue and move beyond traditional brick-and-mortar and e-commerce sites, their success may depend on the strength and ambition of their first-party data initiatives.

Michele Szabocsik is the vice president of marketing at BlueConic, a customer data platform that liberates your data so you can activate your most valuable marketing asset — your first-party customer data.