DTC Brand Trends in 2020

Direct to Consumers Brands are disrupting the world of eCommerce and the dominance of traditional brands. These are the trends that will be used to further this supremacy.

By 2024, eCommerce spending in Ireland is expected to hit €3.8 Billion. This is a huge growth and in 2019, eCommerce spending was projected to increase by 12.9%. With the fast progression of online shopping, many new brands are eschewing the traditional model of starting a business. Direct-To-Consumer (DTC) brands are known for providing their product to their consumer solely online. Instead of creating a physical brick-and-mortar location, they interact with their customers on a digital basis. 

There are numerous established DTC brands that have created a template for how newer brands can successfully operate this type of business. Many of them like Uber, Casper, and Warby Parker have disrupted their industries in only a matter of years. Looking towards 2020, we’ll see many more DTC brands look to achieve eCommerce success. These are the trends for 2020, that are expected to be used by multiple brands.

Offline Meets Online

Retail experiences aren’t dead. Yes, eCommerce has been dominating the marketing and many traditional retailers are struggling to maintain their current business model. But no, that does not mean that consumers, especially young consumers, are no longer interested in shopping in-store. Brand activations have long been a part of DTC brands, marketing strategies. 

Pop-up stores are seen as popular ways for these brands to have consumers come and try their products. In 2020, we’ll continue to see DTC brands engage with consumers offline. Warby Parker disrupted the eyewear industry when they initially launched. They now operate dozens of stores across the United States and Canada. Proving there is value in providing a long-term way to allow consumers to engage with their brand.

According to PwC’s Irish Retail and Consumer Report 2019s 54% of Irish respondents shop In-store either daily or weekly (excluding grocery), up from 46% last year. If the in-store experience is able to provide value to consumers then this can also work for DTC brands.

Irish make-up artist and entrepreneur, Aimee Connolly launched her own line of makeup products, Sculpted by Aimee, with a primary focus on eCommerce. Since launching, the brand has opened a retail shop in Dublin. This location is key to enhancing the brand and value of the product. Not only are consumers able to purchase their favourite products but attend events, book makeup appointments, and take classes from makeup artist experts. It’s these experiences that are able to enhance the online presence and increase sales.

Complete Domination: Being Bigger than their Products

When thinking of many DTC brands, it’s easy to associate them with one specific product or service. Zappos is known for their footwear offerings, Uber for hailing a ride, and Caspar for mattresses. 

While all of these brands have dominated in these single products, to continue experiencing growth, they have all started to break out in order to dominate their categories. Think of the rise of Uber Eats or how Zappos has expanded into watches and other clothing accessories.

Why are brands doing this? It’s to expand the customer lifetime value of their consumers. POCO by Pippa launched as a premium, Irish denim line in 2016. This brand focused primarily on providing high-quality denim jeans to women in Ireland and abroad. In the last year, the product range of POCO by Pippa has expanded greatly. Consumers can now buy tops, sweaters, and denim jackets to complement the jeans that they have grown to love. While offering one product is nice, owning a category is better. The only issue is that brands run the risk of launching products that don’t match the brand or fail to sell.

Amazon Warehouse - DTC Brand Trends izest Marketing

There will be naysayers about this point and there are many reasons to believe the sceptics. For some DTC brands, Amazon can really help your brand to grow while providing an easy way to be seen and ship products. But they also create a showcase for competitors and Amazon have been known prioritise their own brands. All Birds, a DTC brand that sells ethical shoe wear, has accused Amazon of stealing their concept (minus the ethical sourcing of products) and then showcasing the Amazon-owned shoe over All Birds. At the end of the day, Amazon wants to make money and that can occasionally mean they will feature their products over yours.

However, Amazon is a colossal giant that is hard to ignore. So for better or worse, many brands will continue to use their platform to sell their goods. Did you know that 66% of new product searches begin on Amazon today vs 20% on search engines and 4% on a brand website? This is one huge reason why DTC brands, especially startups will continue to sell on the platform. Positive reviews can also create a halo effect that can lead to sales on a brand’s own site.

It’s Getting Personal

Personalisation is used a lot now when talking about marketing trends and strategy. But the importance of it can be easily seen in DTC brands. Resulting from their online first presence, these brands are able to aggregate more personal data on their consumers and then, they actually use it. DTC brands have embraced automation in the form of chatbots and email marketing to create a more personal experience for their users. Retailers can’t send an email to a customer that left their store without purchasing anything. However, DTC brands are able to send a customer an email about their empty cart with a special offer to help with the conversion. DTC brands have been winning the personalisation game and that won’t change anytime soon. This year, we expect more automation and the use of AI to improve customer service even more. Plus chatbots, AR, and VR will see more growth in usage as those technologies evolve.

Social Media is Dead (Kind Of)

DTC brands use social media as a primary means of engaging with followers and potential customers. According to Sprout Social, 62% of people said they are likely or somewhat likely to purchase a product from a brand they follow on social media.

This is why social media can be invaluable to DTC brands. It can serve as a first point of contact that users can see. Additionally, retargeting options in Facebook allow them to serve people with personalised ads to help close the sale. However, there will be a shift in spending on how to reach users. Many brands are realising that their reliance on Facebook ads is not sustainable. What will emerge is a trend back to traditional marketing. Don’t be surprised when you notice more DTC brands spending on radio, print, and OOH advertising. This also makes sense in a digital world with users being able to look up these products upon seeing the advertisements on smartphones. Social media isn’t completely dead as brands will look to different platforms. In 2020, brands will try to find a way to incorporate Tik Tok or Snapchat into their plan as they are a good way to reach a younger demographic.

The concept of a DTC brand is actually pretty new as their success is tied to the existence of widespread usage of the internet and smartphones. This means that there are plenty of trends, ideas, and strategies that will arise over the next few years in the industry. These five trends are only a glimpse at the ever-evolving DTC world. One thing that is certain, is that as eCommerce continues to grow more start=ups will focus on a digital-first strategy.

If you’re a DTC brand or traditional retailer looking to enhance their eCommerce strategy or a start-up looking for strategic advice to get started? Contact izest Marketing here and let’s talk about how to increase your sales.