Evolving Your CX: How to Differentiate from DTC Brands

April 10, 2019 | 3 minute read
James Glover
President and CEO, Coherent Path
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When’s the last time you noticed an alluring product in a store display, or on your favorite store’s website — and then went to buy directly from that brand?

There’s no shame in admitting that you do this. From time to time, everyone has “swum upstream” and bought an item from a brand’s direct-to-consumer (DTC) website or store, rather than at the multi-brand retailer where they first saw it.

In fact, why shouldn't customers shop directly with the brands they love when price, product availability, and delivery are almost always comparable with a multi-brand retailer? What would drive customers to choose the multi-brand retail shopping experience, instead of buying direct from a wholesaler?

Two words: added value. Multi-brand retailers can inspire and delight customers by introducing them to new categories and brands — a unique experience that can’t be found at a DTC brand.

How can you capture this feeling in your email campaign? By using data to introduce each customer to a wider universe of categories and brands as their tastes evolve, your email campaign will replicate the discovery experience your shoppers love.

Rethink Your Value Proposition in Light of What DTC Wholesalers Offer

The rise of DTC wholesalers has upended the traditional retail value proposition. A full 57 percent of brands are now embracing DTC sales. Wholesalers no longer have to sell to retailers to gain access to the consumer market. Thus, customers no longer rely exclusively on retailers to expose them to wholesalers’ product catalogs.

This means retailers are no longer just competing against one another but also against the brands that supply the products on their shelves. One core challenge for today’s retailers is to keep customers from “swimming upstream” and buying directly from those brands — or from third-party facilitators like Amazon, which alone now accounts for 49 percent of all e-commerce.

How can you keep your customers engaged in this midst of this competition? The first step is to rethink the value you propose to offer. Trying to compete on price undervalues your brand. Competing on sheer convenience is also risky, because DTC brands can ship directly to customers’ doorsteps as fast as you can.

But there’s one area in which DTC wholesalers can’t out-compete you: the area of curated, personalized product expertise. That’s where your value prop can really shine.

Do Not Reinforce Past Purchases; Start Curating New Recommendations

It’s easy to understand why many retailers stick with the reinforcement model of personalization: it feels safe. If you keep showing customers products similar to ones they’ve already bought (the thinking goes), then you run less risk of showing them products they’re not interested in.

The problem with this reasoning? If you keep showing your customers recommendations for a narrow assortment of brands, shoppers will come to perceive you as no more than a supplier for those brands’ products. As a result, your customers will head straight for those brands’ DTC portals next time they want to purchase those products.

For example, if you’re a fashion retailer recommending nothing but Eileen Fisher pieces to customers who’ve bought her clothes in the past, then those customers will begin to see you solely as “a retailer who sells Eileen Fisher.” Next time they want to purchase an Eileen Fisher piece, where do you think they’ll go — to you or directly to the brand?

To keep your customers engaged, you’ve got to think beyond reinforcement, and use your data to hyper-personalize the categories, products, and brands you show to your customers.

Add Value for Your Customers — Anticipate and Speak to Their Evolving Tastes.]

The only way to rise above the wave of DTC wholesalers is to put the magic back into e-commerce. That means staying ahead of your customers’ ever-changing tastes and recommending products they’ll love, but don’t even know that they want yet.

In fact, your brand already has one huge advantage over DTC wholesalers: a wealth of first-party data that’s just waiting to be transformed into meaningful truths about your customers’ desires.

Your true value lies not in any single brand you sell, but in the full experience you offer your customers: a journey of discovery, in which their next favorite brands and products lie just around every corner. Deliver that, and you’ll keep your customers for life.

Learn how to optimize further with “Be the Guide of the Retail Customer Journey.”

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James Glover

President and CEO, Coherent Path

James Glover is President and CEO of Coherent Path, where he helps retailers transform their email program into a modern data-driven channel focused on revenue. Prior to Coherent Path, James was VP of Sales at Desktone where he was responsible for accelerating customer adoption and revenue growth from zero to over 100 customers to whom he sold through world-class partners like Dell and Time Warner Cable. Before that, James held executive positions at Memento (acquired by Fidelity Information Services) and Watchfire (acquired by IBM). He earned a Bachelor of Commerce degree from the University of Toronto.

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