DTC: the ultimate playground for content and commerce convergence

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As content becomes increasingly more shoppable, a new approach is required for brands to maximize their full potential to sustain relevance and conversion. Susan Maginn and Carolyn Purdy at Frog explore how direct-to-consumer (DTC) is the ultimate playground for brands to experiment with this new approach.

We are now living in an age where content and commerce are ‘converging.’ Social media platforms are building native shopping functionality, retailers are maximizing their retail media networks, and traditional commerce platforms are enhancing their interface with livestreaming and in-platform gaming.

Content and commerce convergence is not a new phenomenon, but it is a growing trend brands should invest in to be ahead of the curve. This convergence refers to a new view of the media mix whereby content is playing a pivotal role in commerce due to an increase in shoppable assets and a shorter but wider path to purchase.

Randall Rothenberg, executive chair of IAB, says: “The biggest change we saw [out of the pandemic] is the brand-distribution supply chain and brand-awareness supply chain are collapsing into each other. They’re now kind of the same thing. The simplest way to think about it is that it’s all about that screen we’re looking at.”

But where to start with content and commerce convergence? We believe DTC is the best channel for brands to test and learn this all-integrated seamless exciting shopping world. Here are three reasons why:

1) DTC is more than just an additional revenue channel

DTC is in fact more important for brands as a content channel to build strong social communities. When brands focus on DTC purely as an additional sales channel, they tend to fall short – eConsultancy outlines how consumer-centricity is critical in determining the success or failure of any DTC model.

Nike is one example of leveraging DTC successfully. Its ‘Consumer Direct Acceleration Strategy’ nurtures repeat customers through personalization and creates a strong value-add community. It has now paid off – almost 80% of digital sales come from Nike members.

When you position DTC as a channel for content, sales follow. Now 21% of total revenue for Nike comes from its DTC operations. eMarketer echoes this importance due to the level of “depth of engagement [in DTC which] is critical in driving bottom-funnel behaviors.”

2) From advocacy to awareness: shoppability throughout the funnel

As DTC models mature, eConsultancy believes brands need to drive an omnichannel experience rather than purely focus on digital-only marketing, in order to stimulate conversion at every stage of the funnel. In fact, what content and commerce convergence demonstrates is that shoppability is now present at every stage, as consumers move from awareness to conversion instantaneously.

This is the philosophy behind TikTok’s relentless focus on ‘interest e-commerce,’ allowing users to discover content from trusted and authentic voices, which are instantaneously translated into purchases.

Brands should focus on building content that is directly integrated with commerce (as opposed to linking out toward commerce) from the start. This is evident with shoppable TV, which aims to abolish these barriers.

Shoppable TV might be a relatively new media tactic, with ITV, Sky and Amazon experimenting from QR codes to product placement. However, capabilities of this new media tactic indicate endless opportunities allowing brands to tap directly into the multi-screening behavior and direct audiences to browse, buy, donate, download, subscribe or learn more on a DTC site. Reports indicated shoppable TV campaigns convert 73% more consumers than traditional campaigns.

3) Leverage data and build richer audiences

Shoppable TV or livestreaming also have the added benefit of improved measurability and transparency of advertising and attributed sales. In this sense, DTC is the optimal choice for content and commerce convergence due to the rich level of engagement, sales and first-party data unlocked.

Heinz evolved its DTC value proposition behind ‘Heinz to Home’ to form part of a long-term strategy focused on data. Heinz uses its DTC model primarily as a test-and-learn incubator for new product innovations and to “get closer to consumer feedback.”

The use of data and insights enables brands to achieve a granular consumer-centric view on needs and preferences, to build audiences from the ground up and to optimize experiences in real-time.

Content and commerce convergence holds endless engagement opportunities for brands as the path to purchase becomes shorter, wider and faster. This will have implications with how commerce is conducted in the digital era. DTC offers the best playground for this exploration, with a strong focus on community-building, full control over the path to purchase funnel, and the ability to leverage customer-centric data. It is certainly true consumers are already viewing the world as all-shoppable, so it’s time for brands to catch up.

To learn more, Frog is hosting a panel event on June 16: Reverse the Funnel: From Advocacy to Awareness. With content and commerce converging the path to purchase is wider and shorter, but has the funnel reversed as well? Register here or contact us.