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How can your DTC brand stand out in a crowded marketplace?
May 18, 2022
Over the past decade, retail has experienced unprecedented digital transformation, with direct-to-consumer (DTC) brands disrupting the category and enjoying phenomenal growth. And with the pandemic, this has only been accelerated. We’ve seen e-commerce grow two to five times compared to pre-pandemic levels, and social commerce revenues are predicted to increase seven-fold by 2028.
So, it’s no wonder that businesses of all sizes are investing in DTC. From the influx of new start-ups and the emergence of DTC holding companies, through to corporates putting digital at the heart of new growth, money has been pouring into DTC.
But such growth eventually leads to market saturation, and we are now seeing very obvious signs of this. With every new DTC brand launched, there’s a horde of lookalikes eager to follow in its footsteps. The novelty of DTC is seemingly wearing thin and the playbook that led to DTC’s early success is now failing to deliver such guaranteed riches. Some DTC brands are simply becoming disposable to the consumer.
As the game changes, DTC businesses are having to face up to the challenge of how to cut through with a new sustainable model. Having a clear and authentic purpose could be the solution to the saturation conundrum for many businesses.
From success to excess
In contrast to the early days of rapid growth, enabled by the ease of Facebook’s advertising and analytics, DTC brands are now paying for visibility instead of capturing it. They are now heavily reliant on a frequent flow of advertising spend; in fact, over a third of business leaders see the rising cost of social media advertising, as well as increased competition, as the biggest external challenges they face today.
Successful DTC brands of the past accelerated by acting as true digital natives, blending into social platforms in ways that wouldn’t disrupt the feeds of advertising adverse Millennials. It was an anti-disruptive technique that was in fact disruptive. Now, this tried and tested formula of stripped-back, story-less brand building is starting to have the reverse effect. Brands that were once disruptive are becoming disposable - blended, interchangeable, and increasingly forgotten. A trend known as ‘blanding’.
Revolt has analysed 50 of the top emerging DTC product brands, from a cross-section of categories, between 2020 and 2021, and we can see the commonalities of the ‘blanding’ model. At least 70% of DTC brands use just one of three color palettes, and even more - 78% - avoid having a logo altogether. Two thirds follow one of just three brand archetypes, and the same number have a like-for-like founder story.
Purposeful branding is the way forward
In contrast, if you look at the most valuable and iconic brands in the world today, it is easy to see the commonalities that have been lost in the current DTC playbook. Often founded by Quakers and philanthropists, these brands were born to serve a societal benefit, giving them a distinctiveness that stems directly from their purpose. These two qualities have enabled them to create a more meaningful and memorable relationship with their consumers, in a way that’s culturally and commercially lasting. Nike is a testament to this, consistently building on the purpose they serve in the world, and now thriving in DTC.
Returning to purposeful brand building could help to modernize the DTC playbook and help businesses launch and innovate with greater success in this space. Purpose has ability to take you from strategy of replicating and reframing to one that is far more distinctive, defining and disruptive.
Define by standing up to stand out
Through lack of distinction and incoherence, DTC ‘blands’ are quickly forgotten, or worse, driving traffic to their competition. Purpose can be the DTC differentiator, enabling brands to stand up with cultural relevance and stand out with real meaning - in design, communication, and importantly, innovation. Consumers are four to six times more likely to purchase, protect and champion purpose-driven companies.
And, importantly, leveraging brand purpose in culture can dramatically accelerate its traction. Whilst ‘pushing’ a brand to consumers plays a vital role in growing a DTC’s customer base, brands have to recognize the rules changing. As we move into what many are calling DTC 3.0, brands can’t win by simply pumping money into social advertising. DTC is increasingly becoming culture-driven, where relationships with consumers go beyond transaction and are developed through authentic connection and sustained through content and community. For distinctive DTC brands with purpose, leveraging creativity and brand beliefs can accelerate visibility and make a mark on culture, without breaking the bank.
There is no doubt that DTC is a growth strategy that’s here to stay, offering a more accelerated and dynamic path to success than any other traditional model. But with the barrier of differentiation in the way of such success, brands must adopt the best of new practices with the everlasting principles of old in order to cut through with real results.
For DTC brands looking to embrace purpose in the business strategy and branding building activities, these are the three things they should do next:
Define your purpose: Move beyond DTC as the sole value proposition towards a brand purpose that captures who you are and the impact you’re here to create.
Distinguish your brand: Shape a brand experience that kicks back against ‘blanding’ to deliver memorability and meaning at every touchpoint.
Multiply your disruption: Leverage this newfound perspective to expand your visibility and impact in consumer culture and accelerate your growth.