So, you’ve started a direct-to-consumer challenger brand, but you want to take it one step further? In the world of digital innovation, who wouldn’t? However, with the amount of growth in existing e-commerce giants and other brands and retailers, it can often be easy to get lost in the wave of competition – not an ideal situation when you’re looking to grow your own DTC e-commerce operation.
At some point, every direct-to-consumer business was a challenger brand just like yours was, or is, and they had to build it up. Daunting? Possibly. Very simple and based on pure luck? Definitely not. Growing a direct-to-consumer e-commerce business requires dedication and leveraging as many resources as possible; it’s no use waiting for the customers to come to you – you have to make them want your product.
Below, we have established ways you can grow your direct-to-consumer e-commerce brand in 2023. Whether that be a start-up or an enterprise, these still apply throughout the different life cycles of your brands’ growth.
In the article, we will cover the following:
Establish a target audience
A common mistake emerging DTC e-commerce brands often make is trying to target their products to anyone that pays attention to them; it simply doesn’t work like that. Even the large direct-to-consumer challenger brands, such as Amazon and Apple, started from selling one product and then expanded their inventory. Spreading yourself too thin trying to reach different target markets will mean you’re missing out on potential customers truly interested in one product.
Instead, think about a product you’re marketing and focus on bringing attention to that. Ask yourself:
- Is this what my customers really want?
- What products can I source that my customers will love?
- How can I showcase my expertise in this product?
Once you’ve established your target audience, you can then understand customer shopping behaviour within that market. Is that market known for having high basket abandonment rates? If so, why, and what steps can you take to ensure this isn’t the case with your direct-to-consumer business? Diving into the data of consumer shopping habits in a market you specifically cater for will make building your DTC challenger brand a much more cohesive and succinct process.
A great tip here is to ensure you’re setting up your DTC e-commerce brand from a marketing perspective as opposed to a product perspective. That way, you can ensure your target audience are seeing products they are actually interested in, which will ultimately result in a purchase.
Understand how your products convert
Monitoring your customer’s online behaviour is key to understanding how your products convert to then catch them at the right point of their shopping journey. A big differentiator between physical and online retail is the ability for customers to touch, feel, and try the products for themselves in-store, a feature that is taken away in e-commerce. Therefore, in order to reach a high conversion rate, you need to be able to offer them alternatives that will give them confidence in their purchasing decision. For example:
- Including reviews of the products on your site
- Leveraging real customer testimonies/tutorials of the product
- Investing in live video shopping (more on this below)
Customer experiences encompass the before, during, and after stages of a customer’s interfacing with a brand, so make sure to target them at each point of their journey. This could include abandoned basket emails as a reminder to purchase, or even personalised pop-ups offering a discount code on the products.
According to HubSpot, “68% of consumers say they are willing to pay more for products and services from a brand known to offer good customer service experiences”. If you operate your direct-to-consumer e-commerce brand on a basis of providing a great customer journey, you’re more likely to have returning customers who, in the long run, are more valuable than constant new ones.
Test, test, test
Once you’ve established your target audience and understand how your products convert, now is the chance to put them to the test. To increase sales, A/B testing is a data-backed way to improve your DTC e-commerce site incrementally to create a better overall shopping experience.
You can create two variations of the following and send traffic to both to test one item at a time:
- Product images
- CTA copy and button design
- Product copy
- Page layouts
Just to name a few. Make sure to, however, make use of tools such as Google Analytics to determine which variation results in the greatest sales, email opt-ins, click through rates and more.
Testing is a great way to grow your direct-to-consumer e-commerce brand in 2023 because it improves website conversion rates, optimises marketing campaigns to determine which messages or strategies resonate best with your target audience. It also increases overall customer engagement as a result of creating a more user-friendly website that keeps customers coming back.
Direct-to-consumer challenger brands that regularly conduct A/B testing saw a 2X increase in revenue compared to those that didn’t (Optimizely). This highlights the true depth of A/B testing.
Upsell and cross-sell your products
Both upselling and cross-selling provide DTC e-commerce brands with extra value from a sale, resulting in more revenue and greater customer satisfaction, eventually encouraging repeat business from loyal shoppers.
Upselling is the process of encouraging customers to purchase a higher-end product comparable to the one they were initially considering. For example, if a customer is purchasing a mobile phone, a pop-up may appear at checkout for a similar phone but this time with a larger screen, higher resolution, or updated features that the customer is more interested in. This is an example of upselling: you’re giving customers a better, more profitable product instead of the less expensive but basic one they were originally planning to buy.
Cross-selling involves offering customers complementary or related products to the one they are originally purchasing. Sticking with the mobile phone example, at checkout there could be suggestions for a compatible case or charger for the device. This not only results in greater revenue for your direct-to-consumer e-commerce brand, but also showcases the depth of your product catalogue.
These upselling and cross-selling opportunities can occur across all industries, including apparel, beauty, luxury, electronics, and furniture to name a few.
Align customer shopping journey with communication
How you engage with your customers at each stage of their purchasing journey will vary throughout – what you say, how you say it, and why you say it will determine how they decide to process their engagement with your direct-to-consumer challenger brand.
Above are the five stages of your customers’ buying journey. During the awareness and consideration stage, it means that they are already interested in your DTC brand and what it has to offer, they just need some reassurance that the product is right for them.
At these stages, your communication should come across as nurturing, helpful, and potentially educational to push the customer to purchase.
It is also a good idea to offer continuity in this customer experience across channels; it may seem obvious, but if a customer has added items to their cart, you should ensure this is reflected if they access your site on desktop as well. Customers require a seamless online shopping journey, and this is one easy way you can ensure that.
Often, the process isn’t actually linear, and so customers go at their own rate of buying journey; by aligning this with the correct communication at each stage, you can push them to the retention and advocacy stage. Ideally, you would have different tones of communication for each stage of the buying journey.
Invest in live video shopping
Leveraging the use of live video shopping not only deepens the understanding of how your products convert, but is also a great solution if you’re looking to grow your direct-to-consumer e-commerce brand in 2023 for a number of reasons.
Giant retailers such as Apple and Amazon are investing in live video shopping, showing that the adoption of this solution is becoming much more widespread in a digitally innovative world. There are two forms of live video shopping: one-to-one and one-to-many. One-to-one is often used in the consideration stage of a customer’s buying journey, enabling customers to contact online brand ambassadors directly through a face-to-face video call. One-to-many, however, is used to showcase products to a large audience during a fixed livestream event.
To grow your direct-to-consumer challenger brand in 2023, we would recommend focusing on one-to-one, as it offers many more advantages than one-to-many:
- Replicates as close as possible the in-store shopping experience, online, with personalised product recommendations from dedicated brand ambassadors. One-to-many is generic to a large audience who cannot be all addressed individually on a livestream
- Assures customers on high value or considered purchases, providing the level of information and customer support necessary. One-to-many is better viewed as a promotional and marketing tool, rather than one addressed towards customer support or sales
- One-to-one live video shopping sees conversion rates of 20% and above, as well as a 49% and above increase in average order value due to hands on assistance and personal reassurance that the product and price is right for the customer. The service in a one-to-many livestream is much more generic in a sort of ‘one-size-fits-all’ way
- To stand out in a competitive landscape such as e-commerce it’s vital to leverage the constant digital innovations
- Customers value personalised online experiences and easy shopping journey’s more than price
- Live one-to-one video shopping is a vital tool to grow your direct-to-consumer e-commerce brand in 2023 if you’re looking to increase conversion rates and average order value