In this four-part series, we’re taking you on a deep dive of today’s brand manufacturers’ top challenges to provide clarity on the current market environment and empower you to adapt faster.
To stay relevant in today’s rapidly changing market, brands are searching for ways to compete with rising competition. With a much lower barrier to entry to the market, vertically integrated, digitally-savvy brands are sprouting up seemingly overnight. As consumer spending continues to shift away from traditional brick and mortar stores, the competitive advantage will go to brands willing to compete in the digital space.
Vertically integrated brands are creating products that cater directly to consumer preferences – and at a lower price. Brands like Dollar Shave Club, Casper, Allbirds, Everlane, Warby Parker, and Glossier have experienced what seems like instant success by rising to the occasion and selling directly to the consumer.
How are these brands able to experience success so quickly? This approach allows brands to maintain better control of their brand image, more easily manage the returns process, cater to shifting buyer preferences, and communicate directly with customers.
Another benefit? By selling DTC, these brands are also able to gather valuable consumer data that fuel their business decisions. The result is a positive feedback loop of innovative offerings and massive growth. The Farmer’s Dog, a dog food subscription-based delivery service, is a perfect example. Thanks to a vertically integrated approach, their innovative offering is achieving 40-50%revenue growth per month in a market that is projected to grow by 4.4% in 2018.
Brands shouldn’t be intimidated by these digitally native sellers that originated online and seem to have the direct to consumer strategy mastered. This success can be achieved by legacy brands as well – as long as they’re willing to adapt.
Gillette has been a household name for decades and has been able to survive and thrive for so long. After watching market share in blades and razors fall from 71% to 59% in the five years following Dollar Shave Club’s launch, Gillette decided to respond with Gillette On Demand. By giving their customers the option to purchase blades through traditional subscription or on-demand via text, Gillette found a way to meet their customers’ preferences for ‘ease of ordering’ and deliver their product directly at a competitive price point.
Two-thirds of consumers expect the ability to connect directly with brands, so what’s holding you back from giving them the opportunity to do so? Get in touch with one of our eCommerce experts today to learn how we can help you become the next DTC success story.