How DTC Is Shifting Beyond Online Shopping
Direct-to-consumer (DTC) isn't just another sales channel anymore, but an essential way to engage with consumers and collect valuable first-party data and insights right from the source. How and why should CPGs deploy DTC programs to strengthen consumer relationships, test new products, and build brand identity, but avoid conflicts with their retailers?
These issues were the primary focus of the "No Channel Left Behind: How DTC Is Shifting Beyond Online Shopping" panel at the Consumer Goods Sales & Marketing Summit.
"Just two years ago, 'DTC' was a word you get fired over because, obviously, retailers are a top priority," noted Carter Jensen, senior manager for global commerce innovation for General Mills. "We really found a valuable role for D2C and how it fits with this broader, what we call connected commerce strategy."
[See also: How Unilever Uses Consumer Insights in High-Risk Marketing]
CPGs are using DTC to help track the consumer journey, to gain a more definable 360-degree view of the who, what, when, where, and why of customer acquisition, sales, and retention. "Consumers compare you to the last brand experience they had," observed Mohamed Al Lawati, director of digital and e-commerce for Bimbo Canada, "and they expect you to deliver either an equivalent experience or a better experience.
"We're no longer competing with brands in our category, we're competing with the best experience of the consumer," he added. "And that's the challenge that we're trying to prove. How do we deliver a superior experience? That's where direct-to-consumer experiences are becoming such a key piece for us."
Adopting a DTC strategy not only means bringing along other brand stakeholders and partners, but also convincing retailers that DTC does not pose a competitive challenge, and of the value of collecting and especially sharing first-party data.
"The consumer has all the power now [but] retailers are acting like they have been for 100 years," noted Joel Layton, e-commerce, marketing, and digital strategy VP for Shinola. "I believe the consumer is going to start making them change. [DTC] has really started taking apart the walls of retail versus wholesale versus e-commerce.”
“DTC is about putting the customer first and activating where they want to be, where they want to engage with us,” Layton added. “We have all these mountains of data, and it behooves us all as marketing and sales professionals to understand how to reach that customer properly."
Panelists stressed that DTC should not be seen as a replacement for, or competition with, other channels, and may also not provide a measurable return on investment. "DTC is just another piece of the puzzle," insisted Al Lawati. "It will likely never serve a commercial purpose that is scalable, but it will help us have a fuller view of the consumer. And that learning we can take back to our retailers. It's also an incubation chamber for new products we want to launch that you can take back to the retailers and with the proof of concept."
[See also: Goya Marks First Strong DTC Push With Online Store]
Layton happily admitted that DTC has transformed him into a "test and learn junkie." "I'm just rolling the marbles and seeing where they're going to go. OK, those marbles did good, we'll put them over here. Those marbles, we're going to toss them in the trash because that didn't work at all. But the tools are now at our fingertips."
"I'm excited to take the best of what was learned in the last five years in DTC to see and figure out how that is going to fundamentally shift our broader digital strategies,” added Jensen.
