With the rise of eCommerce, both businesses and consumers are constantly looking for new ways to reach out to each other faster and more efficiently.
While the traditional model of having a middleman like eshops and retail stores still has its own benefits, there’s another method that has proven to be very effective for brands.
We’re talking about DTC, or direct-to-consumer, marketing.
Not very familiar with the term? Don't worry!
We’ll cover everything you'll need to know about it in the following guide.
To be precise, we’re going to talk about:
- What DTC marketing is
- What the advantages of DTC marketing are
- The best strategies for DTC marketing
Plus, we've got a bunch of examples to get you inspired and help you gain new customers while lowering your acquisition costs.
We won’t keep you waiting any longer - let’s get started.
Table of Contents
What is DTC in Marketing?
Direct-to-consumer (DTC) marketing is a business model in which brands sell their products directly to consumers instead of having a middleman involved.
This allows DTC brands to have more control over their customers' journey and their marketing tactics since they get to market their own products, thus giving more flexibility in terms of managing their marketing efforts and the budgets required.
According to research, 78% of DTC companies increased their marketing budget compared to 60% of traditional brands.
As we've noted, this model enables brands to control the customer journey down the sales funnel, which is a faster process without intermediaries.
Even better, valuable first-party data can be gathered along the way, which will make room for an increased customer lifetime value (CLV) in the long term.
These are part of the advantages DTC marketing has, which you might also see as D2C marketing, but we’ll cover them extensively further on in our guide.
For now, let’s dive a little deeper into how this model works exactly.
How Does DTC Marketing Work?
As we've said already, the traditional retail customer acquisition model includes an intermediary service.
The manufacturer sells its products to retailers at wholesale prices and retailers then sell the products to consumers at retail prices.
On the other hand, in a DTC model the middleman - the retailer - is completely removed from this partnership, in order for manufacturers to be able to directly reach their consumers.
How do direct-to-consumer brands manage to reach their audience?
They’re heavily dependent on digital marketing strategies and take great advantage of social media and eCommerce tactics; sometimes even combining them in what is called social eCommerce.
Take Gymshark, for example; it's one of the world’s most successful and valuable fitness companies, is a classic DTC brand.
By creating an online community of like-minded people and leveraging the power of user-generated content, it has managed to build its own distribution channels and has full control over its marketing efforts.
It is undoubtedly one of the greatest DTC success stories!
So far, it’s clear that brands following this model can enjoy a great variety of benefits; let’s have a closer look at them.
What Are the Advantages of DTC Marketing?
Here, we’re going to cover the most prominent advantages of a successful DTC strategy.
While each business is different in terms of its size and audience, we believe that the following points will apply to all D2C brands.
Let’s start with the first one.
Advantage #1: Control and flexibility
Possibly one of the best advantages is the flexibility that a DTC-oriented business will have.
Companies like Casper, Warby Parker, and Dollar Shave Club - a brand that delivers razors and grooming products - have all eliminated middlemen and are in full control of:
- Marketing channels
- Supply chains
- Customer experience
- New product launches
- DTC sales
And any other aspect that a business might not have full control over when selling through a retailer.
After all, when selling directly to consumers, you rely on your own eCommerce solutions and not on third-party ones, which not only reduce profit margins but also keep you dependent on their own strategies.
It’s true that large online intermediates like Amazon can help you reach a wider audience, however, you can't control brand loyalty and build meaningful relationships with consumers.
The former is actually a DTC advantage worth diving into a little more.
Advantage #2: Brand loyalty
Customer loyalty is at the forefront of any brand’s objectives.
By interacting directly with consumers, businesses build relationships with them which might lead to higher CLVs and long-term profitability.
Whether the messaging is via email marketing, a chat bot, or by phone, creating connections is an integral part of building brand loyalty.
All those are hard to accomplish in a traditional marketing model which restricts businesses from easily reaching the end user.
According to Hubspot, 90% of consumers rate an “immediate” response as important or very important when it comes to support questions.
As you can imagine, such fast responses are not controllable when middlemen are involved and are something that can harm a brand’s trustworthiness.
All in all, direct contact with consumers can really play its role in enhancing customer relationships and the loyalty they show to a brand.
Let’s move on to the next advantage of DTC marketing.
Advantage #3: Higher profit margins
Imagine wanting to sell a new clothing product you're launching; there are two ways you can go.
The first is the traditional method we looked at, where you contact a retailer - either an online or a physical store - and offer the product at wholesale price, which they’ll then sell at retail price, keeping the difference.
The second way is following the DTC approach, where there’s no retailer but rather you sell your own product directly to your customers, usually through an eCommerce store, keeping 100% of the net revenue.
As you’ve probably already deduced, the latter way is more cost-effective, allowing you to have a higher profit margin and even offer your product at lower prices.
Not bad, right?
Just to give you an idea, in 2020, Walmart sent a letter to more than 3,000 of its suppliers stating that it was going to charge 1.25% of the price of the products sold, needless to mention the 5% charge on the cost of goods sold on it’s eCommerce website.
Overall, this is the reason so many established brands and startups are turning to the DTC approach, and who can blame them!
Advantage #4: Better understanding of consumers
DTC basically means that brands have the chance to communicate and educate their customers directly.
This allows you to gather valuable customer feedback, which can be used to further improve a product or service based on the consumer data collected.
The more insights your business has into its audience’s behaviors, demographics, and attributions, the better you can align your products based on those characteristics.
What’s more, a better understanding of customers means you can predict their future behaviors more effectively; which is a key element of consumer models that so many brands invest in.
To sum up, direct interactions with clients can open many doors in terms of having a better understanding of them and being able to tailor products around them.
Let’s now see a few key strategies that brands can use to leverage their direct-to-consumer marketing campaigns.
6 Strategies for Effective DTC Marketing
In our guide’s fourth part, we’re going to talk about strategies that make DTC marketing more effective.
We’ll try to cover a wide range in order for you to find them as approachable as possible, no matter what industry you’re in.
Kicking things off with the first one.
Strategy #1: User-generated content
As we covered, DTC marketing strategies are heavily dependent on digital tactics; social media in particular.
One technique that stands out is user-generated content (UGC); which is online content created by customers or influential creators that brands use to promote themselves in digital channels.
Generally speaking, the process of sourcing content from individuals can be faster and more scalable for brands, than creating their own content; especially when each step is automated with the help of a platform like Insense.
Those individuals act as brand advocates in a way, since they’re incentivized to get creative and make authentic content on behalf of brands.
Authenticity is one of UGC’s primary benefits because it enhances trust and brand loyalty.
According to research, consumers are 2.4 times more likely to find UGC more authentic than branded content.
What’s more, the element of authenticity can play a great role in social advertising as well, since it can provide better results with a lower investment.
Those results are measured in terms of a lower CPA and CPC, but also a higher CTR and ROAS; metrics that the use of UGC in paid ads can really contribute to.
This is one of the reasons why DTC businesses opt to integrate UGC into their content strategy; it raises brand awareness and is a way of creating an online community by interacting with it directly.
Let’s have a look at an example.
Quip is a DTC business in the oral health market offering a wide variety of products.
By investing in UGC, it's managed to build a strong social media presence and a community of like-minded people interested in its vision; to prove that good design has a bigger impact on oral health than quick fix gimmicks.
Other DTC brands taking advantage of UGC include Glossier, Allbirds, and many more.
Let’s continue, shall we?
Strategy #2: Influencer marketing
Influencer marketing is often an integral part of DTC advertising and there are many brands proving it.
By collaborating with online creators, they drive awareness and sales in an authentic way.
According to The State of Influencer Marketing report, brands using influencer marketing gain $5.78 for every $1 spent, making it more effective than most performance marketing campaigns on paid media like Facebook Ads.
It’s no wonder why so many DTC companies in a wide variety of industries invest in it to grow their business.
Here’s a good example.
Example: TULA Skincare
New York based brand TULA offers wellness and skincare products like cleansers and sunscreens.
As a DTC business, it has taken advantage of influencer marketing in the beauty industry to elevate its social media presence and drive eCommerce sales.
“We’re continuing to see influencer marketing be such an incredibly strong and ROI efficient growth channel for us”
Even during the pandemic, TULA experienced a 400% increase in sales.
It only makes sense to assume that influencer marketing played its part in this.
Strategy #3: Content marketing
Content marketing is something that more or less every brand invests - or should invest - in nowadays.
It covers a wide range of content types like:
- Social media
- Blog posts
And many more, that can bring huge benefits to any type of business.
After all, with the global digital population reaching more than 4 billion people, as a brand you should aim for even a small piece of that pie by creating a strong content marketing strategy.
Direct-to-consumer-oriented companies are no exception to this; almost all of them invest in more than one type of content to promote themselves to their audience.
We believe the following is a good example.
Example: Bespoke Post
Content marketing is a rather vague term so let’s focus on one type: blog posts.
Blog content - when created correctly - can drive a big amount of organic traffic to a website, which will ideally be converted to paid customers or users.
Bespoke Post is a themed box DTC business that sends its subscribers a bunch of useful products on a monthly basis.
By regularly uploading blog posts, it manages to attract 218,000 organic monthly visitors.
Driving targeted traffic is a great way to grow a user base and Bespoke Post seems to be doing a great job at this.
To take this a step further, it's worth noting that social media content is another area where the brand has a strong presence.
With over 280,000 Instagram followers, it promotes its products directly to its audience and has even partnered with a trusted partner like Insense to achieve this.
Let’s continue to the next strategy.
Strategy #4: Content repurposing for paid channels
A great strategy that many D2C companies take advantage of is content repurposing for paid channels.
When generating quality content like social media posts, podcasts, and studies, they can then be repurposed to target people through paid means of advertising.
For instance, a clip from a podcast can be turned into a TikTok post and then promoted through TikTok ads.
Another good example is when brands take advantage of user-generated content to be used for paid media, especially when we consider the fact that 93% of consumers find UGC helpful when making a purchase.
While we briefly mentioned the benefits of UGC in social advertising earlier on, it’s important to highlight its strong role in the ROAS (Return on Advertising Spend) a brand might have.
Let’s have a look at another example of a company that repurposed its content for paid channels.
Mejuri is a DTC jewelry brand with a strong social presence; it makes sense that UGC is an integral part of it’s strategy.
What’s interesting, though, is the fact that content created by individuals isn’t just posted by Mejuri for organic purposes, but also paid.
As you can see, a piece of content created by an Instagram user was used as a sponsored post by the brand.
This can make promotional activities more authentic and less “salesy”, which users tend to prefer.
Other types of content repurposing include using webinar clips, blog posts, and testimonials for omnichannel marketing purposes, in order to reach consumers directly.
Let’s move on.
Strategy #5: Email marketing
Email marketing has been an effective tactic for businesses over the years.
Since it’s a direct form of marketing, it makes sense for DTC brands to take advantage of it to target their customers through direct mail.
This can either be a newsletter containing the latest pieces of content and valuable information or even a simple email for solely promotional purposes.
According to research, 59% of respondents stated that marketing emails influenced their purchase decisions with half of them buying from those emails at least once per month.
There's definitely people out there receptive to your message.
Needless to say that even UGC can be used in email marketing to maximise results.
Let’s have a look at a DTC company using emails as a strategy.
Harry’s is a US company that sells personal care products for men.
As a clear DTC-oriented brand, it takes advantage of the power of emails to reach out to both existing or potential customers.
Targeted consumers receive an email in their inbox - like the one above - regarding Harry’s products which they can go ahead and purchase.
Sounds good, right?
Email marketing can work for almost all types of businesses, from beauty and food brands to CPG (consumer packaged goods) and pharmaceutical companies.
Especially if you’re a DTC business, this tactic should be a no-brainer.
Moving on to the last strategy on our list.
Strategy #6: Referral marketing
There are many forms of marketing out there; affiliate marketing, SMS marketing, and others like the ones we covered earlier are all available for brands to choose from.
However, not many drive the benefits that referral marketing does.
It’s a technique that incentivizes loyal customers with rewards and perks in order for them to refer their network to a company.
It’s a win-win situation for both parties if you think about it; users receive a reward and companies new customers.
Needless to say that the referred people are often rewarded too.
This is exactly why referral marketing is so widely used by brands around the world, including ones in the DTC space.
Here’s a good example.
Blissy is a DTC company offering pure mulberry silk pillowcases with the goal of helping people sleep better.
Apart from partnering with relevant and high-quality online creators with the help of Insense’s platform capabilities, referral programs are also utilized to help grow the customer base.
As you can see in the screenshot above, Blissy offers a $20 discount for both the referrer and the referred person for a purchase of $30 or more.
This is also known as the two-sided-referral.
It's appealing to both sides of the transaction and to the business.
Such tactics are used by many brands worldwide with great success, so as a DTC brand yourself, we believe it’s worth looking more into integrating referral marketing to your strategy, too.
Those are the most prominent strategies a business can use to drive great results.
We hope that they really help you in your marketing efforts, but if you’re looking for some extra inspiration, here are a few more examples of DTC brands doing exceptionally well.
Examples of DTC Marketing
In this last section of our guide, we’re covering some examples of DTC marketing to get you motivated.
We’ll try to include brands from different industries so it’s more likely that you’ll find them relatable.
Example #1: MEL Science
The first case we’ll feature is that of MEL Science.
It’s a brand offering monthly science related subscription boxes directly to its customers.
Suitable for kids, millennials, or anyone else interested in learning more about science, this DTC brand has taken advantage of some of the strategies we covered earlier.
First of all, by partnering with Insense it managed to generate high-quality UGC for its social media profiles, which total over 400,000 followers on Instagram alone!
Apart from that, it used those posts created by users in paid ads to expand its brand awareness even more through the promotion of authentic content.
Just like in the following image, where UGC was leveraged for a Facebook ads campaign.
What’s more, it's heavily invested in content creation for its blog which generates almost 50,000 monthly organic visits.
To sum up, MEL Science is a great example of a DTC brand selling products directly to its customers and taking advantage of DTC strategies to grow.
Let’s move on to the next one.
Industry: Subscription boxes
Why we like it: It combines many DTC marketing strategies
Example #2: Cosy House
The next example is that of Cosy House.
Cosy House is a DTC brand offering a wide range of bedding products, such as pillows and sheets.
According to their website:
“Cosy House has been disrupting the entire bedding industry after we discovered just how many “middle men” were between the manufacturer and customers. We decided to import these pristine products ourselves and instead of going the traditional retail route, we wanted to get these products directly to customers”
Clearly, the direct-to-consumer model has been a logical business model and a big success for the company.
What’s more, common DTC marketing tactics have also been utilized, like the use of UGC - by partnering with Insense - content marketing, and email marketing.
Needless to say that content made by creators has been utilized in paid ads, just like the one below.
Cosy house is just one of the many brands that have incorporated UGC into their advertising campaigns, especially when considering the fact that 71% of consumers trust reviews made by creators more than branded content.
Industry: Home bedding
Why we like it: It offers pristine products directly to customers
Example #3: Daniel Wellington
Our third example is Daniel Wellington.
Being somewhat of a legacy brand in its industry, Daniel Wellington offers stylish watches directly to its customers without any retailers involved.
The reasons behind its success are many, but as in any DTC business, the online content marketing strategy has played a great role.
User-generated content in particular has been at the core of the strategy, with thousands pieces of content having been created by individuals on various platforms.
They generate an enormous amount of exposure for the brand and make a substantial contribution greatly to eCommerce sales, with revenues hovering around the $200 million mark.
Moving forward to the next example.
Industry: Fashion and accessories
Why we like it: It can be considered as a UGC success story.
Example #4: Teddy Blake
Teddy Blake offers high-end Italian handbags which are handmade.
While most similar companies display their luxurious products in retail stores, Teddy Blake went another direction and opted to offer them through its own online store.
According to the company, although it had the chance to partner with retailers, it decided to stay exclusively online because the prices were too high.
This means that it recognized the advantages of DTC marketing - which we covered earlier on - and decided to take advantage of them.
Digital marketing has also been a part of the company’s success, since by partnering with Insense it managed to achieve a 12x ROAS on Instagram Ads.
In the following image, you can also see a TikTok post generated from a user in order to be used in paid ads.
Let’s continue to the next example we have for you.
Industry: Fashion and accessories
Why we like it: It offers luxurious items directly to consumers
Example #5: The Farmer’s Dog
The next example on our list is a company called The Farmer’s Dog.
This DTC brand aims to deliver fresh and healthy dog meals directly to its clients, without any pet stores interfering.
The way it works is simple; meals are tailored around each dog's needs and sent ready-to-serve to customers.
With user-generated content, email marketing, and affiliate marketing being successfully implemented, it’s easy to see why it’s such a successful brand.
The image above is just one of the many UGC examples the company has used in order to raise awareness for its products.
What’s more, following the example of many other brands, it has also utilized user-generated content as part of its advertising campaigns.
The image below shows how a video from content creator kismet_house, has been used by The Farmer’s Dog as part of its Facebook ads campaigns, where the use of a discount code has also been leveraged.
Let’s continue to our last example, shall we?
Industry: Pet food
Why we like it: It’s a unique, pet-friendly DTC company
Example #6: Trinny London
Last but not least, we’ve got Trinny London.
Trinny London is a DTC beauty brand specialized in makeup.
The eCommerce-focused brand also offers hybrid formulations of skincare, makeup, and accessories.
To increase the reach of its high-quality products, it also takes great advantage of bloggers and other content creators.
For instance, the following is a blog post by Christina Miller on her blog called The Daydreamer, where she writes about her experience using Trinny London’s cosmetics.
All in all, this is a great case study of a makeup company that's managed to avoid middlemen like retailers and stick to the direct-to-consumer path successfully
Why we like it: It’s a high-quality DTC brand
Those were a few examples of great DTC companies that you can get inspiration from.
Let’s now wrap things up with some final thoughts.
Now Over to You
There you have it.
That was our full guide on DTC marketing.
What did we cover?
Definitions, strategies, examples, as well as many tips to get you started in case you’re a DTC brand already or thinking about starting one.
What’s more, if you need help in executing your strategy around UGC as successfully as the companies we looked at, make sure to book a free demo with Insense and we’ll guide you step-by-step.
Thanks for reading!