Direct-to-consumer (D2C) brands have unfiltered insight into customer behavior.
With no retailer in the middle, they can easily obtain customer feedback and tailor their offerings accordingly.
Born in the online world, D2C brands remove the retail middleman in order to own the entire relationship, from production to distribution to sale.
And, because they have streamlined supply chains, D2C brands can offer highly competitive prices.
So how can traditional brands compete against those digitally born, like Dollar Shave Club, Casper, and Warby Parker?
Customer data puts you in the know relationally
D2C brands own the customer relationship, so they hold a large amount of detailed demographic and behavioral data about their customers.
Customer data is tracked — from browsing history to final purchase — allowing the brand to optimize for better, more targeted recommendations.
And each D2C transaction is an opportunity to interact with an engaged consumer.
Traditional brands with a robust omnichannel and social presence should also have that type of data available for analysis.
Get demographic data from ecommerce & advertising
Ecommerce platforms and digital advertising provide demographic data such as gender, age, preferences, geography and more.
Analyzing customer information provides retailers with a roadmap that details which products are popular, as well as where there may be product gaps.
In other words, data can also show what customers may be looking for but aren't able to find.
The most successful D2C players have identified markets that consumers felt were overpriced. By working with their suppliers and providing them nuanced customer personas, traditional brands can trim costs, provide more personalized products and increase sales.
Understand psychographics from web & social media data
Psychographic data, comprising information about a person's values, attitudes, interests and personality traits, can also be extremely important in targeting prospective customers, and website analytics can help gather that type of data.
Reviewing existing site content and previous special offers can paint a picture of what has moved site visitors to click, call, or buy in the past.
That insight will not only inform ecommerce positioning, but in-store marketing as well.
In addition, surveying regular customers can also improve a brand's understanding of its clientele.
Psychographic data is easily acquired when advertising on social media platforms.
A robust social advertising strategy has tools that can spread awareness quickly to a targeted set of customers that goes well beyond demographics.
For example, if a sporting goods store learned that many of its customers are mothers, aged 35-50, who run, buy youth soccer equipment, and are also in dog rescue groups, its promotional materials might easily be tailored to reflect that persona.
By using personalized data, traditional brands can adjust their websites, products, and messaging to address their D2C competitors effectively, increasing sales and customer loyalty.