Online shopping isn’t new, but that doesn’t mean the industry is stale. On the contrary, the e-commerce space has experienced monumental shifts over the last few years thanks in part to the pandemic and robust technology that helps to make the buying process easier for consumers.
Who could have predicted 10 years ago that DTC brands would have interrupted every consumer product and service space? And now that they have, what will this crowded ecosystem look like in the future?
As technology and consumer attitudes continue to evolve, it’s up to brands to ensure they’re meeting customers where they are. In this post, we’ll go over some significant trends we’re seeing in the market and predict how these will progress in the future, particularly for DTC brands.
Here are 16 trends we’re seeing pay off for DTC brands.
The DTC brands that are winning are the ones that understand the problem they’re solving and are seeking out partners to help them better solve it. That can include collaborating with complementary (not competitive) brands to bundle product offerings and create a unique experience for like-minded consumers.
Short-form video content, on TikTok especially, is a low-hanging fruit for DTC brands looking to engage with Gen Z consumers. DTC brands can use short-form UGC content to authentically showcase products, acquire social proof with influencers, and drive social commerce sales. This type of native content has the potential to drive significant growth for DTC brands and establish a strong presence on social media platforms.
Simple, clear messaging has its moment, but don’t underestimate the power of a strong narrative. Humanized storytelling, particularly at the top of the funnel, can boost awareness and drive engagement. Emotional content can come to life in many forms, including brand messaging, product descriptions, and video testimonials. This approach allows DTC brands to stand out from the crowd and create deeper emotional connections with consumers, fostering long-term loyalty.
The name of the game in e-commerce is seamlessness. Innovative tech stacks allow DTC brands to improve the customer shopping experience. We’ve seen recent advancements like more accessible donation options at checkout and more advanced customer support chatbots. DTC brands are elevating their customer journey. From browsing to checkout and beyond, new tech is helping to make the entire process smoother. A seamless stack can also provide valuable data and insights on the back end, allowing DTC brands to better understand and meet the needs of their customers.
Loyalty programs have been around for a while, but they’ve changed in the last three years. The pandemic has accelerated the shift towards online shopping, especially for millennials looking for personalized rewards from their favorite brands. With functionality such as points systems, rewards, and first access to new products, loyalty programs can incentivize customers to continue shopping with a brand.
We saw significant growth in the buy now, pay later space. These days, shoppers can easily click a button on a Shopify-supported checkout to pay over time without incurring interest. These payment options (proven to drive sales) are especially enticing to money-minded consumers and can have big payoffs regarding retargeting and retention.
If there’s any lesson e-commerce businesses have learned over the past five years, it’s that the DTC model works. Before, there was a belief that only small brands could make that business model work. Still, we’re starting to see more and more classic, legacy brands leap into the DTC space, integrating learnings into their mobile shopping experience. Amazon and Walmart are two prime examples.
As brands start to see themselves as problem-solvers and not just product distributors, they develop related solutions, diversifying their product lineup. For example, a shampoo brand may start experimenting with hair supplements or scalp brushes in order to diversify their appeal.
It’s no secret that subscription-based brands have dramatically changed e-commerce sales. Many online retailers offer subscription options, with consumers receiving a welcome discount if they choose to receive the brand’s product monthly, quarterly, or even weekly. For brands, it means retention, loyalty, and increased lifetime value.
It might have surprised us a few years back to know that pop-ups would still be relevant today, but the customer data brands are receiving as a result is vital. With the help of machine learning, DTC brands can gather and analyze metrics at scale to make more informed decisions and offer personalized recommendations.
The arena of digital marketing has seen an evolution from simplistic, often misleading measurement methods to more comprehensive and meaningful metrics.
This shift is evident in our departure from traditional multi-touch attribution models, which once dominated the industry. These models focused on measuring the impact of different media touchpoints leading to a sale, but they often provided a limited view of the customer journey.
In contrast, we’ve recognized the value of broadening our perspective to embrace holistic measurements like the Marketing Efficiency Ratio (MER).
The MER considers the total revenue generated in relation to total ad spend, moving away from the attribution bias towards last-click Return on Advertising Spend (ROAS). This provides a more accurate and balanced view of the marketing efforts’ effectiveness, accounting for all touchpoints and their collective influence on customer behavior.
By embracing such comprehensive metrics, we can confidently assess the total impact of our marketing strategies on revenue growth, regardless of the specific media touchpoints a consumer engages with.
In this new age of digital marketing, we’re no longer just tracing individual paths to a sale. Instead, we’re painting a complete picture of our marketing efficacy, allowing us to continually optimize and adapt our strategies for maximum performance.
To that end, omnichannel digital advertising is more significant than ever – a space that Meta used to dominate, brands are seeing digital advertising as a more nuanced puzzle, which involves leaning on dozens of digital platforms. With omnichannel messaging, brands can expand reach, be present at every stage of the customer experience, and stay top of mind for online shoppers.
At this stage, personalization isn’t just a luxury. It’s a necessity. Consumers expect it and brands without leverage are losing revenue. Personalized experiences and automated product recommendations improve conversion rates. It’s the modern day version of an in-store personal shopper. Except now, everyone can have one.
Digital advertising allows for some experimentation, but only some brands use that to their advantage. We’re strong proponents of constant A/B testing, so brands can build a winning formula to maximize efficiencies. Direct-to-consumer brands can’t afford to slack on customer research and creative A/B testing allows just that. Insights acquired from that data can ensure brands reach their target audience with the right messaging at the right time.
What is the billboard equivalent of the digital age? That’s a question many brands are considering right now. Some billboards currently support video content, such as UGC, event videos, or brand videos, while digital streaming sites offer their own versions. Without the benefit of physical stores, e-marketers need to get creative to reach new customers through new marketing channels and technological advancements like augmented reality (AR). Digital OOH allows for that creativity.
Today, DTC brands are dominant forces among e-commerce sites. Consumers appreciate their new payment methods, emphasis on sustainability, and ability to personalize their products and experiences. The rapid-fire growth of DTC brands is a testament to that consumer appetite.
The future of e-commerce can be difficult to foresee. Change has been a constant in this space and it’s not always easy to anticipate future trends. But we have two predictions:
The rise of DTC e-commerce stores has brought about new trends and opportunities for online stores to reach and engage customers. From collaborations with other DTC brands to closed-community platforms, loyalty programs, and omnichannel digital advertising, e-commerce platforms have various options to enhance the customer experience and drive sales.
By embracing these trends and utilizing the latest technology, DTC brands can stay ahead of the competition and succeed in the rapidly evolving world of e-commerce. Whether looking to improve the shopping experience, drive engagement, or increase sales, a well-thought-out strategy and a solid e-commerce platform can be a powerful sales channel for DTC brands.
Want to take your e-commerce to the next level with industry-leading, data-driven omnichannel digital solutions that meet customers in real-time? See what the experts at MuteSix can do for you today.
Sources:
Monthly options drive more sales with Shop Pay Installments | Affirm
Amazon’s Counterintuitive Next Big Move — Helping Brands Sell Off Amazon | Retail Touch Points
What Does Today’s Consumer Want? Personalized, Seamless, Omnichannel Experiences | Forbes
Buy Now, Pay Later: Market trends and consumer impacts | Consumer Finance