5 DTC trends that drive growth
Although still a relatively young business model, DTC has changed since the first successful wave of companies using the model came onto the scene. There are three big direct-to-consumer trends driving DTC sales.
1. Subscription services
This one isn't new, but remains a dominant feature of DTC sales. As we mentioned earlier, the convenience of subscriptions is something that customers respond well to, so it's something that DTC businesses continue to incorporate into their strategy.
2. Big brand retailers test-driving DTC
Apple has long been a company that gets its sales primarily in a direct-to-consumer fashion, but other large brands are beginning to test their own DTC waters. Nike has opened their own brick-and-mortar DTC stores, as well as selling to consumers through their website. After Unilever purchased the early DTC adopter Dollar Shave Club in 2016, other big brands have been acquiring their own direct-to-consumer companies as well.
3. Discounted signups and free trials
Getting customers to take the first step is often the hardest part of marketing for a DTC company. To entice more first-time consumers into taking that step, DTC brands are offering discounted signups, free trials, or other freebies to new members. As long as these freebies are well below the customer lifetime value, the strategy pays off.
4. Consumers don't necessarily want corporate infrastructure
For a while, the trend was for big box stores to come in and put the little guy out of business. As commerce moves away from a brick-and-mortar model and closer to the eCommerce market, the odds have evened up a little. Consumers generally do not care if there is a large corporation with massive R&D budgets, so long as the product is high-quality and affordable.
5. DTC alternatives are growing in popularity
The same quality and affordability DTC products offer that allows them to compete directly with much larger competitors, also makes consumers more willing to give products sold under the model a try. Growth in the sector should continue to climb as consumers become less apprehensive about purchasing directly from the brands they follow.