April 13th, 2021 · 3 minute read
DTC. 3 letters that have become synonymous with some of today’s most popular, digitally native, premium brands. But what does DTC mean? What makes a brand DTC?
DTC or direct-to-consumer is when ‘brands sell directly to their end customers without selling through a retailer, distributor, or wholesaler,’ but in today’s digitally accelerated world it has become so much more than just a distribution model.
Some of your favorite brands have become the pinnacle of DTC - Casper, Away, Bombas, Glossier, Warby Parker. But you don’t love these brands because you can go directly to their website and shop them. You love them because the product is better, the price point is reasonable, it’s likely a mission-driven brand, the company probably has a powerful founder story, and you not only like to shop their products but you like to engage with them on social media.
These DTC brands have taken the burden on themselves to manufacture, distribute and market their products because they are passionate about finding a better way. By owning the supply chain end to end, they are able to own their customer relationships end to end. This gives them the ability to create a better product at a reasonable cost because they can implement product feedback and create a more premium consumer experience.
The premium experience matters. Searching socks on Amazon and scrolling through pages and pages of no-named brands is a very different experience than going to Bombas.com and buying comfort focused socks that also have a give back component. That’s why early last year, Nike cut ties with Amazon. Their performance plunged because Nike didn’t directly own the consumer experience and relationship on Amazon.
Going direct and having a direct relationship is incredibly important for today’s digitally native brands. Many DTC brands build their business online, leveraging search and social media as their preferred marketing strategy, but the offline world still accounts for most consumer interactions: specifically about 80% of commerce and 54% of marketing.
The digital world provides tools and solutions for brands to own their experience, their data and their customer relationships, but that is not true for the offline world. That’s why direct connection technology like QR codes and NFC tags have become increasingly more important for DTC brands looking to build a presence offline.
Offline, DTC brands have turned to QR codes like Flowcode to create direct connections in the real world. Supergoop!, a leading DTC brand focused on sunscreen and skincare, recently leveraged Flowcode's next generation QR technology to boost in-store traffic and understand consumer engagement within Sephora’s 431 U.S. retail locations. Flowcode has been incorporated into the in-store self strips and graphic cards, which allows scanners to get more information about the product and allows Supergoop to get more information about the customer in Sephora.
DTC is so much more than consumers being able to shop directly from a brand’s website. DTC is about building direct connection points wherever consumers can interact with your brand. From distribution to marketing, brands today need to leverage all of the tools and technology in their arsenal to go direct, own their customer relationships and create a premium brand experience. That’s the definition of DTC.« Back to Blog