DTC (direct-to-customer) is defined as a marketing model that is more centered on the convenience and needs of the customer, rather than the retailer. The distribution model started with products that are easy to deliver in the fashion, skincare, and cosmetic lines, but DTC marketing has since been adopted by brands across many niches like technology and luxury goods. The global pandemic accelerated the growth even more as brick-and-mortar businesses started to move online. Here are some of the major DTC trends we saw this year and which experts believe will only continue to grow bigger in 2023.

1. DTC for traditional retailers

More brick-and-mortar stores will see the potential of DTC marketing as part of their retail strategy. By selling products straight to customers, they no longer have to go through department store chains or online retailers. DTC would, of course, pose unique challenges for them, as they would have to engage in the various aspects of ecommerce management, including product returns, order fulfillments, and so on. But despite these challenges, many traditional brands have been slowly figuring out the advantages of DTC marketing. For one, DTC marketing gives them full control of their marketing message and how they present their products to their customers.

2. Influencer-owned DTC brands

Many influencers have been shifting towards promoting sales for other brands to launching their own DTC brand. We’ve seen this trend from many celebrity influencers who have had huge success with their skincare, beauty, cosmetic, or fashion lines. But even micro-influencers have been seeing this potential because they already have a loyal audience to market to.

3. DTC brands going public

We have seen a trend of DTC brands going public via IPOs or direct listings. Brands like Rent the Runway, Casper, and Lulu’s are among recent examples of businesses that entered the public domain. Operations and profitability are the biggest challenges for DTC brands that decide to open up to investors.

4. Subscription pricing

Speaking of profitability, subscription-based pricing models are being adopted by DTC brands to stay competitive in their respective niches. This pricing strategy has worked extremely well for products that customers order on a regular basis like meal plans, bath essentials, and even pet supplies. It’s also very effective with customer retention.

5. Flexible payment options

Offering a wide selection of payment options, including “Buy Now, Pay Later,” is a trend that many DTC brands would do well to adapt. By offering customers flexibility in terms of payments, they increase actual sales and have the potential to reduce instances of cart abandonment. Aside from payments through debit cards, credit cards, and platforms like Apple Pay and Google Pay, more payment schemes like Klarna and AfterPay are gaining popularity among customers seeking payment solutions that they can afford.

6. Lesser dependence on paid ads

Paid ads on platforms like Facebook and Instagram used to be instrumental in driving customers to DTC ecommerce sites. But the iOS update giving Apple users the power to restrict data tracking on their mobile device, advertisers are forced to adapt new strategies to reach customers, such as marketing on other platforms and offline locations. They would also have to get more creative and to focus on building a strong brand to begin with.

7. Offline experiences

With the rising costs of online advertising, the presence of physical stores have become essential even for DTC brands that were initially launched online. Store outlets can be the place for customers to engage with the product, even if they end up buying these online. More DTC brands are also seeing the benefits of partnering with established retailers and department stores to promote their products to a wider audience at lesser costs.

8. First-party data

Access to third-party data, which was instrumental for advertisers in targeting customers, is no longer as easy to obtain especially since the latest iOS update. As consumers grow more mindful of the data they share with advertisers, DTC brands have come up with ways to obtain valuable data that customers would be more than willing to give. Strategies would include personalized quizzes, which could help marketers make better customized recommendations to the user.

9. Personalized marketing to drive customer acquisition

DTC brands have been learning to take a more creative approach, particularly with storytelling, to reach new customers. This trend comes in light of recent changes in third-party tracking for iOS, which made it more difficult for brands to acquire new customers with traditional tactics. Small businesses have major brands have shifted to more personalized storytelling to build customer relationships in lieu of customer tracking across platforms and ads retargeting.

10. Closed-community platforms

Smart DTC marketers are aware that social media can do more than building an audience. By driving customers to closed-community platforms. For example, a DTC brand runs targeted ads on TikTok or Instagram where users can participate by simply entering their email address. The brand uses the information provided by the customer to build an email list, which is what you might define as a platform where they have full control of their brand story and the message they deliver to their engaged customers.
The rise of DTC marketing spawned from a global health crisis, but will be here to stay even after the pandemic has subsided. Customers are not likely to give up the convenience of finding products they need online, when they need it, thanks to DTC brands. We are expecting more customer-focused initiatives and innovation within the DTC space,