The Opportunity for DTC Brands - MGR Blog

Last week I wrote about The Growth of DTC Brands in the COVID-19 Crisis.  This is the second article of this series focusing primarily on planning strategies.

It is true that with so much uncertainty and ever changing regulations during the pandemic, it’s been very challenging for brands to work on any long term plans.  If anything, it’s been more like planning by the hour or day-to-day and week-by-week as the situation unfolds.  Adapting and pivoting fast is the key.

What we’ve learned so far is that consumer behavior is changing.  The shift to online shopping and online transactions in general is nothing but real.  Work from home, learn from home, play from home and exercise at home are all now common habits for all of us.

With that in mind, the opportunity to start planning for the increase in online spending is real, and as much as we all think and hope that things will go back to “normal” at some point, the fact is that the new normal will just bring a boost to online transactions of all kinds.  It’s just more convenient, saves time and reduces unwanted person-to-person interactions.

The “shelter-in-place” period has served as a great trial-and-error program for many brands.  It’s been a great opportunity to learn what their customers want, the type of service that they expect and the prices they’re willing to pay.  You couldn’t have planned for a better focus group in real life.

Now is the time to use this experience and adapt it to the overall marketing strategy as the lockdown is lifted and the different deconfinement phases come to effect.   The sooner brands start to take action, and the better prepared they will be to deliver a relationship-growing customer experience when the tides turn again.  In this sense, DTC and in general, online brands, do have a head start compared to brick and mortar brands, but it’s not all lost for those either.

Unfortunately, as of this writing, we’ve already heard of companies like Neiman-Marcus and J.Crew filing for bankruptcy.  Others like JC Penney or Nordstrom may follow soon.  Brands that sell primarily through physical stores must move online and adapt, immediately if they want to stay afloat.  It is clear that the longer people stay at home, the more brands with no ecommerce presence will suffer. But it is also clear that, as consumers shift their habits to shop online, brick and mortar brands have more to lose once consumers start going out again.

One thing we already know is that when states and counties restrictions are lifted, consumers will still be reluctant to go back to public places, be it shopping malls, restaurants, sporting venues, airports, and the likes.  Social distancing and a number of other protocols will remain in place for months to come.

That’s why it’s critical that brands that rely on a majority of their sales to come from physical stores adapt as quickly as possible to the new conditions while they also implement a long term plan in line with potential new regulations.

In general, brands (DTC or brick and mortar) that don’t have fast, flexible, and affordable online marketing tools will likely be left behind.

The shift to shopping online has been so radical, that even Amazon, the king of eCommerce, is running into fulfillment issues and having to prioritize certain items over others, and even break their long-standing “Prime” shipping turn-around rules.  This brings a great opportunity to other online retailers to fill this gap.  Consumers will still spend their money, however, any Amazon loss will be your gain if your online store is ready to pick up the slack.

It is now more important than ever for DTC brands to boost their own marketing plans.  From running online campaigns (search, display, social) to email marketing, lead generation, content marketing, voice marketing including podcasts and Alexa briefs, etc.

The more they can grow their customer and audience base now, the lower their future customer acquisition costs (CAC) will be in the future.  As much as the COVID-19 crisis has created the biggest disruption of business and lives around the world comparable only major economic depressions and World Wars from last century, this is also a unique opportunity for many brands to position themselves in front of new consumers.

Consumers that were not comfortable buying online or simply didn’t have that habit are now shopping online and buying more than ever from their favorite brands.  They are also discovering new brands that are providing them with better, lower priced and improved versions of the products they were used to buying at retail stores.

Judging by the news and the information that we have today, it doesn’t seem like some of the residual effects of this pandemic will go away anytime soon.  The more agile companies are to adapt to new consumer trends, the higher chances they will have to succeed.

As always, if you need any assistance with your branding and digital marketing, our MGR Team will be happy to chat with you one-on-one.  Use this link to contact us and set up your free consultation.

Thank you for reading.  Until next time, this is Manuel Gil del Real (MGR).

Photo by Heidi Fin on Unsplash