Challenger brands have taught us that brands will need ‘direct-first’ CMOs

The “DTC” model has proven to be more powerful than most seasoned marketers realize: one-third of consumers plan to do at least 40% of their shopping from direct-to-consumer players in the next five years. And DTC brands’ successes extend beyond their products. They are all about creating experiences that feel novel and generate pride of association. The most notable DTC brands represent part of the shopper’s identity or personality.

The DTC movement this year has helped reveal that marketers lost sight of quality. Everything in the last 15 years slowly but surely became about a rush to scale, whether we are talking about advertising, impressions buying, amassing data signals, retail sales and so on and so forth. Thanks to these upstarts, we are learning to slow down again. Let’s look at what’s making DTC brands so big and what marketers of all stripes can learn from the phenomenon.

Fill gaps with a new-economy business model

A central component to DTC players’ successes lies in capitalizing on marketplace inefficiencies. For instance, luggage brand Away found a price point in the middle of high-end brands and inexpensive suitcases while offering a quality product and an Apple-esque design. What a simple-yet-brilliant plan. Away leans in on content marketing, helping the startup sell a half million suitcases in its first two years. There are dozens of other examples, including the subscription contact lens startup Hubble, which has become a global brand overnight.

And now, legacy brands are getting into the mix. For instance, Hearst Media this fall launched BestProducts.com, an e-commerce site that will leverage the editorial content from titles like Good Housekeeping while selling an array of products in the tech, beauty, home and parenting categories. Hearst is also testing an online-offline combination with the Good Housekeeping brand by opening an Amazon-powered pop-up store in the Mall of America.

Get direct-first talent

When Nordstrom purchased Trunk Club and Walmart acquired Jet.com and Bonobos, these legacy companies did more than fill a hole in their business — they pushed their brands into the 21st Century and created notable comeback stories. Success came to Walmart and Nordstrom because they acquired the masterminds behind winning DTC strategies. Such fresh expertise cannot be underestimated.

Whether it’s through acqui-hires or recruiting talent from other companies, it’s imperative that established brand marketers build a team that “gets” the new economy. Executives seem to be more and more aware of this reality. Per Deloitte’s data from August, talent is CMOs’ number one concern.

Demonstrate authentic values

Brands increasingly take stands on political or cultural issues. In November, Walmart, Union Pacific and Boston Scientific dropped support for the re-election campaign of Sen. Cindy Hyde-Smith over her reference to a “public hanging” while running against a black opponent in Mississippi. Standing up against racially insensitive language should be an easy call. Brands that say and do nothing about social issues will be seen as complicit and consequently shunned—particularly by younger consumers.

Demonstrating foundational social values is more authentic, and DTC brands are leading the way. For instance, Everlane decided to do something about the incredible amount of non-biodegradable waste piling up around the planet and committed to using zero virgin plastic in its supply chain starting in 2021. This move will hurt the fashion retailer’s bottom line, but it will endear the brand to the environmentally minded. The brand Knix Wear incorporates a social mission into its brand DNA and products. A self-described “intimate apparel brand on a mission to inspire all women to live unapologetically free,” the company’s clothing styles promote a healthy sense of body consciousness in a world that over-glamorizes thinness.

In sum, quality is making a comeback

The DTC movement this year underscores that customers crave quality products and experiences after an era when marketers were overly focused on scale. The direct-first ethos is all about serving the customer—and thank goodness for that shift.

Now more than ever, it’s important for a CMO to take charge as a brand’s direct-first leader. A chief digital officer, or CDO, is a Band-Aid—and, in our omnichannel world, it’s outdated. As a CMO going forward, you need to work hand-in-hand with myriad colleagues—the e-commerce director, chief technology officer, chief product officer, chief revenue officer, chief financial officer, etc.—to keep your new-economy vision aligned across the company.

The DTC trend will only continue to build steam. CMOs who learn from this success and apply direct-first strategies to their brands in 2019 will stick around a lot longer than three or four years.

Penry Price is the VP of Global Sales for LinkedIn Marketing Solutions