At Advertising Week New York, panelists sought to find a common definition of DTC. While there was some overlap between the definitions provided, there were also points of disagreement around what constitutes a direct-to-consumer brand.
Moderator Jeff Fagel, SVP and head of marketing at Epsilon and Conversant, began Wednesday’s ‘Breaking Down DTC’ panel with a level-setting quote from Henry McNamara at Great Oaks Venture Capital:
“The term “‘direct-to-consumer’ is outdated. The opportunity isn’t about being strictly direct, but having a way to engage and interact with customers, knowing what customers want and meeting the customers where they already are.”
Heather Steiger, senior marketing manager at Freshly, disagreed. The concept of direct-to-consumer is basic, she said. “I am basically cutting out all intermediaries, I’m going straight to the consumer and selling my wares.”
Chris Moore, head of strategic partnerships at Publishers Clearing House, agreed. “There’s a level of engagement directly between the brand or company and the consumer.”
While most panelists were aligned that there is some direct relationship between so-called DTC brands and their customers, some approached the problem of defining DTC tangentially, focusing on the relationship consumers have with DTC products rather than the relationships they have with the brands behind them.
Steiger reasoned along these lines.
“DTC all came about because they were trying to solve a problem. If you hate grocery shopping, a DTC brand will pop-up to say “this is how we’ll solve that problem,” she said. “It all (came) about to think about a different way to do all the traditional things we used to do.”
“Do you consider Freshly DTC even though there’s still a level closer to the consumer, you can go to a farm stand, or somewhere before that?” asked PCH’s Chris Moore.
“If you want to just eat an apple, yeah. But if you want risotto and you don’t want to have to cook it you can go to Freshly.” Steiger said.
Tracey Kambies, Deloitte’s US retail and consumer products sector and global analytics ecosystems and alliances lead, also defined DTC on a product-basis.
‘Direct-to-consumer has to focus really hard on having a quality product and reaching the consumer directly,
Not all panelists agreed with this approach, however.
“Hasn’t this just always been true?” counterposed Dan Levi, chief marketing officer at ClearChannel.
“What’s different here is not the importance of a good product—it’s the velocity that that happens. In the traditional retail model, you’re manufacturing and distributing that product at a much slower pace, I think the beauty of DTC is that constant direct customer relationship and the feedback and engagement gives you the ability to optimize that product,” Levi said.
At ‘The Changing Face Of DTC Brands,’ moderator Anna Hensel of Modern Retail began her panel in a similar search for the core of DTC. She noted that earlier in the week someone had described DTC as a mindset, which she did not fully agree with, but noted, “not all of the brands that say they’re direct-to-consumer are selling just direct-to-consumer.”
Alternately, Fluide co-founder Laura Kraber suggested that perhaps DTC is a mindset, noting that most brands don’t believe they can be exclusively DTC at this stage. “We want to have a direct relationship with our consumers and sell online. DTC is a mindset in the sense that you’re building a community online and are focused on that direct relationship.”
At the same panel, Shopify’s CMO, Jeff Weiser, put DTC into an historical context:
“One of the things we always like to remind people of is that direct-to-consumer is really the natural state of commerce. You don’t really have, until the
Debates about definition aside, 80 percent of consumer brands believe DTC brands are impacting how they think about marketing.