Originally published at AW360.
No other area of business has seen such exciting growth and visible success as Direct-To-Consumer (DTC) commerce. In the past decade over 3,500 new brands have sprung up in every sector of the economy, and they are raising an estimated $4 billion in
As organizations like the IAB call DTC “The Future of Retail,” it’s no surprise to see large brands and retailers paying attention. Companies like Timberland, REI, Under Armor are finding success in expanded DTC channels to recapture market share. While it’s tempting for brands to simply ape the tactics that are outwardly visible from successful DTC brands, the truth is that much of what makes DTC experiences so persuasive and valuable is invisible from the outside.
Retailers or brands who view DTC as merely a channel strategy are oversimplifying and missing the value of the underlying trend in a big way. It’s not about increasing distribution, adding technology or improving supply chain; it’s about transforming customer experience and the corporate culture that enables it.
What is truly driving the meteoric rise of DTC? It’s the enduring reminder that consumer experience matters most. And now, more than ever, consumers demand better. DTC addresses fundamental demands from consumers like frictionless retail, brand experience, product innovation and personalization. Embracing the resources and sustained effort required to deliver today’s DTC experiences is critical for enterprise retailers looking to serve their customers and address emerging competitive threats.
That drive is precisely why creating a DTC experience is neither simple nor benign. Larger legacy enterprises and brands have a lot to lose through the thoughtless development and execution of DTC experiences that deliver no value to customers and create confusion in the marketplace. Our first piece of advice to brands seeking to develop DTC experiences is to swear a kind of Hippocratic Oath. “First, do no harm.”
What harm can a bad experience do?
Many brands make the mistake of believing that
Positive experiences create value for customers, the brand, channel partners, the organization and shareholders. High-performing DTC brands are able to see the thread through the whole experience on behalf of the customer, rather than see the experience as a series of hand-offs. Critically and inevitably, customer experience will live or die by the culture and organization that underpins a brand. DTC DNA identifies the core skills and cultural dispositions needed in each area of the business so that executives at brands and retailers can use them to build compelling experiences and corporate cultures to deliver them.
DTC is a skill to be developed more than it is a business unit to be spun up. Brands must understand the value of all of the elements that create the lived experience of the brand to develop true customer advocacy.