5 factors of direct-to-consumer brand success

Legacy brands can learn from the direct-to-consumer model with a value shift to serve

If I had to summarize the direct brand experience in a single sentence, I’d have to borrow AYR’s tagline: “Simplify everything.” Gone are the days of scheduling time between drop-offs, pick-ups and work to stop by the mall.

Need to try on a few styles? Don’t worry about it: Warby Parker will send you a few sets of glasses to try on at home. Top-notch customer service and breezy return policies make buyer’s remorse a thing of the past, while boxed sets eliminate the need to choose outright. Best of all, many direct brands take social responsibility seriously, offering ethically-sourced products to soothe even the guiltiest conscience; Bombas even donates returned socks to those in need (after they’ve been washed, of course).

Personally, I ditched Dove deodorant for Native, my Nikes for Allbirds, my Brooks Brothers for Birddogs and signed up to Quip for all my toothbrushing needs. But I’m not the only one in love with direct brands. After Unilever’s $1 billion acquisition of Dollar Shave Club, a growing number of legacy brands is seeking to absorb these upstarts, and it isn’t obviously in defense of market share. In 2015, Dollar Shave Club controlled 1% of the market, a drop in the bucket compared with industry leader Gillette’s 64%.

What, then, is motivating this emerging interest?

1. DTC brands know their audience

As their name suggests, direct brands have immediate access to consumers and their purchasing habits. Unlike legacy brands that rely on abstract sales figures and traditional market research, direct brands collect data on consumer preferences and behaviors at the source.

Coupled with the added insight of customer accounts, individual purchase histories and consumer feedback, direct brands can build precise and dynamic pictures of consumer groups. Like Netflix, which leveraged users’ viewing habits to develop curated content categories, direct brands can learn and adapt their product lines to target niche consumer interests.

Beauty retailer Glossier used data from their blog, Into the Gloss, to optimize the online shopping experience. Noticing that many readers would find products on their mobile device but switch to desktop to complete the transaction, Glossier linked user accounts across platforms.

Their small size and flexible structure make many direct brands ideally suited to pivot towards customer habits and preferences. The Menlo Club asks customers to fill out a short survey on stylistic preferences that inform the personalized clothing packages they ship monthly but adjust product offerings by identifying popular items or tastes is a staple of the direct model.

2. They’re more than just another product on the shelf

While direct brands sell commodities, they are not commodified. Direct brands stand out with targeted branding, distinct product offerings and a brand story awash with authenticity. No direct brand is quite like any other, giving consumers what they want most: choice.

They can’t beat legacy brands when it comes to standardization and familiarity, but direct brands lend even commonplace products a personalized appeal by listening to consumers. From seasonally-themed special releases to values-driven product development, direct brands transformed the retail experience to reflect the needs of today’s consumer.

The opportunity to actively choose the brand that speaks to you profoundly impacts the purchasing dynamic: you’re not just buying deodorant, you’re buying Native, and in doing so you are aligning yourself not just with a product, but with the brand and its values.

Consumers’ relationships with Dove, Old Spice, or Secret, in contrast, are equally passive. While the choice between marginally-differentiated alternatives has worked for decades, it does little to build brand loyalty and has helped create the space direct brands are moving into.