US Markets Loading... H M S In the news

Direct-to-consumer sales are on the rise. Here's how traditional and digitally native brands can keep up.

Getty Images
  • The COVID-19 pandemic reshaped e-commerce. Now, 60% of consumers choose to buy directly from brands.
  • Online shoppers believe individual brands offer better value than third-party retailers.
  • Traditional and digitally native brands were able to connect with new audiences through DTC.

Consumers have more choice than ever in where and how they shop, so the shopping experience has become an even more critical factor in influencing purchase decisions. This was reflected in a Google-commissioned Kelton Global direct-to-consumer (DTC) survey of 3,494 DTC shoppers in the wellness, home, apparel and electronics categories. The survey showed that almost 60% of online shoppers would go out of their way to buy directly from a brand.

This DTC trend has opened the door of opportunity for both digitally native brands and traditional brands that built up their online sales channels. This trend doesn't appear to be going away anytime soon, with 66% of online shoppers purchasing directly from brands in the past three months, and 42% expecting to buy more directly from brands over the next year.

Consumers find real value in transacting directly with brands and would pay more for brands with environmentally friendly or sustainable practices

More than two-thirds of online shoppers said that individual brands offered better quality than third-party retailers, the Kelton Global survey found. Furthermore, 61% said individual brands provided a more personalized experience, and 66% said it was easier to understand the principles of individual brands. Brands must continue to use personalization and clarity of messaging in their one-to-one engagements with shoppers to improve the quality of connection in an increasingly competitive landscape.

One key way to stand out in the landscape is to share what makes your brand unique. Consumers find that when buying directly from brands, they can make choices that align with their personal values based on the brand's values. Fifty percent of shoppers said that they preferred to buy from brands that had an interesting backstory or stood for something specific. In fact, shoppers were even willing to pay more for it. Fifty-four percent of DTC consumers said they would pay more to buy from brands that had environmentally friendly or sustainable practices. DTC channels are a key driver for brands to better articulate their values in driving and capturing consumer demand.

Know your appeal to communicate effectively with current and potential customers

In addition to a more personalized experience and an alignment of values, consumers say they are reaping other experience-influencing benefits by purchasing directly from brands. Interestingly, these benefits vary among traditional brands (those that initially focused on brick-and-mortar sales, primarily through wholesale) and digitally native brands (which began as e-commerce-only entities). Scaling operations as consumers explored new brands out of choice and necessity posed unique challenges to each. 

Digitally native brands — with DTC sales-channel distribution at their core — were able to scale up operations quickly to tap into this sales-channel growth. Meanwhile, traditional brands were focused on enabling this sales channel in a meaningful way. Traditional and digitally native brands could each learn from one another's strategies to remain nimble as this sales channel grows. 

Similarly, each could benefit from studying the value consumers derive from each brand. While digitally native brands are seen as trendy and unique, traditional brands are seen as reliable and able to offer high quality. Digitally native brands could learn how to message quality to drive brand equity, and traditional brands could assess the unique brand identity that digitally native companies have crafted to encourage trial among DTC shoppers.

As brands look to the future, focus areas differ depending on brand maturity and digital capability. Traditional brands continue to scale up their DTC capabilities and infrastructure to capture and measure the consumer journey, while digitally native brands continue to explore cross-channel expansion opportunities to supplement innovative marketing solutions in driving business objectives. Regardless of maturity and capability, unlocking an effective DTC strategy would help brands meet and exceed goals for years to come.

DTC is here to stay. Learn how to embrace the opportunity now for your brands.

For traditional brands, investing in sales channel expansion and upgrades, adding digital tools to improve sales conversion, and more effectively measuring the customer journey would give them the means to capitalize on the value of DTC in driving relationships and sales. 

"It's fundamental that traditional brands answer several important questions to enable DTC growth," said Chris Valle, an industry leader in consumer electronics at Google. "How do you capture your data? And how do you build lifetime value and really understand the consumer as they go through the journey? The simple, yet difficult to achieve, answer to all is to extract value from their data."

Digitally native brands must continue to find innovative and effective ways to identify potential customers and convert them (and retain them) to continue to scale their businesses. That means enabling automated tools to deliver the right message to the right person in the right moment, while removing the need for manual intervention and guesswork. With consumers living online, brands must appear throughout the shopper journey, on multiple platforms, to reach customers at different points on the purchase path. 

"Brands across the maturity spectrum are finding great success with simple-to-implement, but incredibly powerful, automated solutions," said Jane Butler, the managing director of pure-play retail and DTC at Google. "These turnkey solutions allow brands to focus on their broader strategy to achieve business goals, such as acquiring new customers and retaining their existing customers, by freeing up time and mind space to dedicate to the deep thinking needed to differentiate the brand in an increasingly competitive environment."

Both digitally native and traditional brands can benefit from strategic efforts to make the customer experience pristine at all brand touchpoints. It all starts with initial discovery, which DTC shoppers are finding through online search (52%), friend or family recommendations (45%), TV commercials (43%), social-media ads (35%), display ads (31%), online video (24%), and mobile-app ads (23%). Building the connection for trial and continued engagement can help develop a symbiotic relationship for consumers and brands. 

Consumers value engaging and transacting directly with brands when the experience is delightful and differentiated. Lean into digital to activate the direct-to-consumer sales channel to pave the way for better consumer relationships and positive business effects — two areas at the core of any brand's strategy.

Learn more about Google's direct-to-consumer expertise here

This post was created by Insider Studios with Google.

Close icon Two crossed lines that form an 'X'. It indicates a way to close an interaction, or dismiss a notification.