The landscape for direct-to-consumer e-commerce has been forever changed by the pandemic and consumer buying behaviors. The radical growth of e-commerce, the return of retail and the uncertainty of price increases and inflation have created a turbulent yet exciting environment for companies seeking growth in 2022 and beyond. In addition, as more consumers now buy directly from manufacturers, they often bypass the middleman or third-party sites.
I believe these changes are here to stay. My company helps manufacturers increase sales and sell directly to customers, and below are three steps I recommend direct-to-consumer brands consider exploring for growth and staying ahead of their competition.
1. Revisit your pricing and marketing spend.
Since the pandemic began, executives have faced their share of challenges. Whether they’re dealing with labor shortages, supply chain constraints or raw material price inflation, the solution for many companies has been to increase retail prices. But as the dust settles on some of the crises that triggered price increases, it’s critical to look at your competitive landscape, optimize your pricing strategy and increase marketing spend in prospecting campaigns in a bid to capture market share away from competitors that have been slower to adapt.
The pandemic has reshuffled the deck, and I believe the direct-to-consumer brands that can quickly make their pricing more competitive—while pushing the accelerator into new prospecting campaigns—will find themselves positioned for strong growth now and in the future.
2. Consider leveraging retail media networks.
A retail media network is when a retailer builds an advertising platform inside their digital assets. For example, this allows Campbell’s soup to place an ad in Walmart’s mobile app.
Retail media networks are growing rapidly since the beginning of the pandemic. Retail media advertising is expected to reach $41 billion this year, according to eMarketer. From my perspective, product discovery is behind its rapid growth. Many consumers discover new products on Google Shopping, Amazon or other retailer websites. By purchasing ad space on these types of websites, you can position your brand in important and limited real estate. Direct-to-consumer brands can consider looking beyond the typical product discovery areas and testing the waters of retail media networks to measure whether this is a viable prospecting channel for them.
One piece of advice I give companies considering retail media networks is to start small with a select group of test products. If you choose to partner with an agency as you’re getting started, ensure it specializes in the specific network you’re targeting, and allow your partner agency to help you properly onboard and set up your account. Then, over time, you can move to having this platform managed internally by your team.
3. Look for shop-in-shop opportunities.
The “shop-in-shop” or “store-within-a-store” retail concept is based on an agreement between a retailer and a brand. The brand leases dedicated space within the retailer’s store where they have more control over the selling experience of their products.
This concept has been around for years; I’ve mostly seen it in dedicated beauty brand kiosks in department stores. However, it’s expanded and is now evolving into a trend known as “experiential retail.” You can consider launching pop-up shops, in-store kiosks and store-within-a-store offerings; these can enable your brand to create tangible, real-life experiences you can’t create online.
Target, for example, is one of the retail leaders of this concept. The company has partnered with Apple, Disney, Levi’s and Ulta Beauty to create similar shop-in-shop experiences. Direct-to-consumer brands can benefit by having more touchpoints with their prospective customers, as well as expanding upon their e-commerce buying experience with curated in-person experiences.
Offering consumers a fresh new experience is a win-win for both the retailer and the brand.