The Keys to Direct-to-Consumer Success

The following is republished with the permission of the Association of National Advertisers. Find this and similar articles on ANA Newsstand.

By Christopher Karpenko

For many companies, 2020 has been a year of shifting priorities. While many traditional brands have been warming up to e-commerce for the past several years, of course, the pandemic has accelerated the adoption rates and placed digital sales front and center.

The growing trend pits traditional brands against direct-to-consumer (DTC) companies. DTC brands, borne from the internet and growing at a rapid clip, sell directly to the customer, with no need for the retail “middleman.” Now, more than before, these two types of retailers are vying for customers in the same space.

DTC brands have an advantage, just not necessarily what marketers might think. Below are a few reasons why DTC companies may be pulling ahead of traditional brands.

Leading with Direct Mail

While DTC brands meld offline marketing tactics, such as direct mail and other print advertising, into their digital campaigns seamlessly, this continues to be a struggle for many traditional brands.

DTC companies regularly and effectively employ direct mail to nurture and convert their customer base. In an online survey by the IAB (Interactive Advertising Bureau) of 330 DTC brand executives, 63 percent of the respondents said they use direct mail while 39 percent of DTC brands not currently using digital direct mail said they plan to do so in the future. What’s more, direct mail was found to be the most preferred offline marketing channel (63 percent), beating print, out-of-home, TV, and radio.

Part of the reliance on direct mail among DTC brands is that it’s effective at generating leads. According to the State of Customer Engagement 2020 report, direct mail is more effective than digital display and paid search ads when it comes to engaging and nurturing customers; this goes for both B2B and B2C companies.

The report, which was released by London Research and dotdigital, also found that direct mail is more effective than digital display ads for converting prospects into customers as well as for customer retention and loyalty.

Direct Mail Is Core to the Campaign

Before rushing to copy the offline marketing efforts of direct-to-consumer brands, it’s vital to first understand the purpose driving the strategy. The timing, messaging, and medium each play a part in the broader scheme of the campaign.

Here’s why DTC brands weave direct mail strategically into their marketing:

Mail reaches people at home, where purchasing decisions are made.

Most decisions about what to buy and from where are made or discussed at home. Indeed, 88 percent of purchasing decisions are made at home, according to a 2019 PebblePost Consumer Study. Direct mail is one of the few marketing tools designed to reach people at home, and it leaves a lasting effect. Direct mail usually stays in the home for more than two weeks, compared to online emails that are viewed for two seconds on average, RetailWire reports. In addition, 61 percent of respondents in PebblePost’s study said direct mail influenced their purchasing decision.

Fifty-eight percent of millennial respondents said they worry less about direct mail privacy than digital communications privacy.

With people spending more and more time at home these days, communicating with them about something tangible and targeted can have a significant impact. Physical ads outperformed digital ones, leaving a lasting impression of both the brand and the specific marketing message, according to a 2019 report released by the United States Postal Service Office of Inspector General.

DTC furniture brand Article deploys direct mail catalogs to reach customers at home, per an interview in Retail Dive. For Article, a catalog is one aspect of the brand’s marketing mix that aims to build confidence with new and potential customers.
Mail helps form authentic connections with customers.

Strong customer relationships are central to DTC brands’ marketing strategy. By connecting the consumer directly to the providers of the products and/or services, these companies create a simpler and more cost-effective solution for customers.

Building these relationships starts with cultivating trust. According to recent proprietary data from USPS, 58 percent of millennial respondents said they worry less about direct mail privacy than digital communications privacy. Even more, research shared by MediaPost shows that 40 percent of consumers look forward to checking their mail.

The medium enables brands to build one-to-one relationships with customers. Using omnichannel tactics such as retargeted direct mail, which deploys personalized mailpieces based on online behaviors, companies can speak more directly and authentically to shoppers.

For thredUP, an online marketplace for secondhand clothes, personalized direct mail is an essential strategy. As WARC reports, the company sends mailpieces featuring products and deals that are personalized for the recipient, which has been proven effective in reengaging lapsed customers.
Mail drives conversion when used in tandem with paid digital.

While direct mail is a valuable conversion tool, it should be part of a larger awareness campaign that also include digital tools. Mail can revive prospects who may have initially responded to social media messaging but then dropped off.

Brands can use paid search, social media, email, and digital ads to build awareness and acquire customers. These digital-first methods lead to easy touchpoints for consumers, who can click on an ad and go directly to a website.

But without direct mail, conversion is less clear. Physical mail gives brands an opportunity to access consumers from a different angle and in a different form. Using it as a conversion and retention tactic can nurture a prospect or customer and get them into the sales funnel quicker.

Bear Mattress, a sleep brand targeted to active people and athletes, found that combining relevant direct mail with digital campaigns helped reduce its cost per acquisition and convert prospects into customers, according to the IAB.

Blended Model

With the state of retail marketing in constant flux, brands need to be both more agile and strategic to plan for their future more effectively. For traditional brands facing direct competition from DTC companies, this means adopting some of their strategic thinking.

Marketers should consider blending online and offline marketing to build awareness, nurture prospects, and drive conversion, but they should not blindly follow competitors just for the sake of doing so. It’s vital for brands to explore which new marketing tactics are most appropriate for their customer base and what outcomes the company wants to achieve.

With such tools in tow, the onus is on brands to create an authentic, customer-focused marketing plan that encompasses digital and physical channels and sets companies up to deliver what their audiences need.

About Author: Christopher Karpenko is the executive director of brand marketing at the United States Postal Service, a partner in the ANA Thought Leadership Program.

 

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