The DTC wave is still swelling in the Asia Pacific region but it will soon be a crowded marketplace, and marketers looking at DTC for growth must move fast and embrace new ways of monetising insights from media data to win.
There’s a not-so-quiet revolution going on in direct-to-consumer (DTC) brand marketing. There’s clear evidence that brands need to move beyond traditional advertising and use data and performance marketing to gain advantage and win.
Nearly all consumers are aware of one or more DTC brands. Anyone scrolling through their Facebook and Instagram has been offered products that the algorithm predicts they will like and want to purchase. Creating attractive, easy to act on purchase opportunities is the essence of DTC.
DTC is a rapidly growing e-commerce segment in the Asia Pacific region. Early successes include such companies as Indian mattress retailer SleepyCat, Singapore’s Secret Labs (chairs for gamers), and Thailand’s Pomelo Fashion, an online fast fashion women’s wear brand. And we can expect many more DTC brands to emerge in the next few years.
Nearly 40% of consumers worldwide have purchased one or more DTC brands recently, in categories ranging from clothing to personal care products and homewares. A growing proportion of people, around 10%, have purchased a DTC product five or more times. There’s a pattern of growth and consumer change that is still at a relatively early stage in Asia-Pacific.
In the US, the most cited DTC brands are Warby Parker, Glossier, and Dollar Shave. They have all built strong brands, achieved runaway sales growth, and have passionate, repeat customers.
So what is the key to successful DTC media and marketing?
In our experience, getting the middle of the funnel right is crucial, and one of the best ways for DTC’s to do that is to master the use of programmatic and performance media.
Successful DTC brands build data-fuelled e-commerce engines to ensure their media and marketing hits the right note with consumers. They quickly adapt their sales strategies based on streams of data and amend pricing and positioning at lightning speed to ensure they can change direction quickly. They deploy a performance marketing mindset and use their brand channels to promote and develop a sense of community with their audiences. They have a laser focus on cost per acquisition.
Historically businesses have built brands from the top of the marketing funnel down and focused on awareness and consideration, interest, desire, and action -- whereas DTC brands are built from the bottom up. A robust DTC brand looks for audiences that show intent and interest in discovering new brands through search and social. They then start to layer channels on top to augment reach and scale. Each decision is informed and tested by data.
As you shift investment into DTC, you can drive cost-effective customer acquisition and generate massive amounts of data and insight to help you to determine how to build both the products and effective digital customer experiences. Experimentation is crucial and taking prudent risks is an essential success factor in Asia-Pacific, where mobile e-commerce is growing faster than any other part of the world.
Marketers who are charged with achieving rapid DTC brand growth need to be agnostic to select the right channels and undertake A/B testing to see what web-based brand offers are resonating with consumers.
Another difference from traditional brand models is that DTC’s tend to build in-house teams, rather than relying solely on agencies. They work with agencies as needed to develop their brand, to tap into specialist expertise to create new campaigns, or to enhance their martech stack. They’re looking for ways to get and use tech-driven advertising data, as opposed to just targeting audiences with content.
DTC’s focus on maximising the return on pay-per-click and paid social as a starting point. They then move on to find audiences that look similar to their existing customers. By collecting first-party data and digging deep into the different types of audiences that are buying, they identify consumers that have the propensity to spend more and connect with lookalikes of those audiences by using technology and addressable media.
The DTC revolution is here, and the winning brands will be those that move fast and embrace new ways of monetising insights from media data.