Only the rare few people who have avoided purchasing online in the past few years can fail to notice the rise of DTC marketing. Established enterprises and small startups appear determined to connect directly with customers and reduce or even eliminate retail intermediaries.

Bigeye's national study, Retail Disrupted: What Shoppers Want From Brands Today, found that members of Generation Z, those aged 18 to 24, are the most likely to have purchased from a direct-to-consumer brand in the past six months. Sixty-three percent have done so, compared to just under one-half of Gen Y, those aged 25 to 39.

This trend began even before the pandemic, but the increase in online shopping because of coronavirus offered a catalyst. As with online shopping, once businesses and customers started noticing the benefits, the trend appeared permanent. Explore the benefits of DTC marketing and suggestions to develop a DTC strategy.

Benefits of a DTC strategy for marketing

A well-considered DTC marketing strategy can benefit brands with control over prices and messaging, lower operating costs, better customer insights, and improved brand loyalty. These benefits of DTC marketing also appear to give companies more resilience and agility to respond to rapidly changing marketing conditions.

For instance, Forbes reported that just 22 percent of DTC companies experienced declines in sales during the pandemic. That compares to 80 percent of other brands. Some examples of the agility of direct-to-customer marketing include:

• Saie produced natural beauty and wellness products, and they rapidly pivoted to offering hand sanitizers to include for free with each order.

• Gusto, a small business payroll solution, started assisting with business loans.

• StockX rapidly shifted its focus from selling sneakers to offering facemasks.

Today, pandemic concerns appear to have waned somewhat. Still, a glance back at the past couple of decades demonstrates multiple market disruptions, such as recessions and the digital revolution. Today, many companies struggle with supply issues, inflation, and an uncertain global political and economic climate.

Businesses can use DTC to help plan for disruption. Besides, better control and understanding of the marketplace will yield dividends during boom or bust periods.

Suggestions to develop an effective DTC strategy

Every DTC company should develop its unique brand and direct-to-consumer strategy. Aspects of branding may include well-considered images, color schemes, and messaging. Consider these direct-to-consumer tips for marketing in light of past successes. At the same time, prudent marketers will study thriving DTC businesses to learn from their examples.

Develop an easy-to-communicate unique value proposition

Figure out what the brand offers that makes it better than its competition. Make it easy for consumers to understand how they benefit. Dollar Shave Club offers one of the most commonly cited examples of a DTC brand. In 2011, when Dollar Shave Club started, nobody thought the startup could succeed against such established brands as Gilette, which controlled 70 percent of the market at that time.

Dollar Shave Club communicated its unique value proposition as delivering inexpensive, high-quality razors and other products to the customer's door each month. Even though average consumers did not have much familiarity with online subscription services in those days, they quickly understood the value of patronizing a convenient option that saved money.

Dollar Shave Club quickly developed a loyal customer base by delivering on its promises. The unique value proposition attracted plenty of new customers. In 2016, Unilever purchased the business for $1 billion.

Connect with customers as personally as possible

Personal connections attract consumers and transform them first into customers and then into the type of loyal patrons that keep buying and then pass the word on to their social circles. Direct contact with customers also gives brands reliable data sourced right from the consumers.

When retailers sell a company's products, they're the ones with the chance to develop these connections and collect information. On the plus side, DTC businesses can utilize plenty of tactics to connect with customers.

Make customers part of the development process

Casper exceeded expectations with its online mattress sales by hitting a million in revenue during the first month. This company's ability to collect data provided the key to growth. For instance, during the development phase, Casper had 15,000 people testing prototypes and providing feedback.

The cooperative process gave this mattress maker a chance to design an excellent product, seed its marketing database, and develop its growing army of brand ambassadors. The company still collects information from customers, and they often send gifts on special occasions, like anniversaries, thus maintaining the relationship.

Connect directly with customers on social sites

Before the unicorn beauty company Glossier launched, it already had a popular blog and social media presence. To maintain momentum after the launch, the company focused on producing authentic content with iPhones instead of studios, minimal makeup, and natural appearances to develop its brand.

Glossier also made its products uniquely sharable with photogenic packaging. Plus, it branded itself around the "Glossier Girls," an army of brand enthusiasts who share their beauty regimens, issues, and feedback with the company on social media.

The company leverages social media influencers, but these people aren't just celebrities but also customers and employees. Glossier encourages influencers by providing hashtags and offering samples and discounts to women who participate by referring their connections to the brand.

Develop brand loyalty

Shopify reported that DTC businesses generate an average of 60 percent of their business from repeat customers, so it's almost impossible to overstate loyal customers' importance. Both Glossier and Dollar Shave Club stand out as admirable examples. However, it will help to explore various DTC strategies in more detail.

Develop a community

Communities give people with shared interests a place to gather. They can draw upon a broader population of people by supporting various interests that the market may share. Thus, the communities don't need to limit themselves to only mentioning the company's products to work effectively.

During the pandemic, many gyms closed. In response, Gymshark called upon personal trainers to conduct Facebook Live workout classes, and the company offered to pay these professionals for their efforts. This tactic helped support struggling fitness coaches and provided the perfect content to help grow a community with an interest in the workout gear that Gymshark sells.

Promote loyalty programs

Shopify also mentioned that DTC businesses enjoy an average retention rate of almost 26 percent. Part of that impressive figure stems from relying on loyalty programs that reward customers for repeat purchases.

For example, Haus arose as the first DTC business to market alcoholic beverages. By enrolling in their membership for just two bottles of wine each month, members get free shipping, a 10-percent discount, and special perks. Members enjoy these same benefits with a subscription for six bottles a month plus a 20-percent discount. In particular, the company holds regular members-only events that give them a chance to connect with customers and solicit feedback from them.

Support customer's values

Surveys have found that most consumers in almost every age group will spend a bit more to support companies that support their values. In particular, supporting worthy causes can offer a competitive advantage for products that consumers consider nearly identical across brands, like socks.

For example, Bombas sells almost all of its socks online. Glossy's research found that two-thirds of its customers patronize the brand because it donates one stocking pair for every one it sells to a customer.

DTC companies may demonstrate their values in various ways. For instance, many businesses emphasize using sustainable packaging and ingredients, relying on clean energy, or engaging in other eco- and community-friendly business practices. Besides giving away products to the less fortunate, Bombas also publicly participates in social justice causes, like ending homelessness.

Offer subscriptions

Besides online shopping in general, taking out subscriptions for product deliveries has also gained traction in the past few years. MutliChannelMerchant predicted that 75 percent of DTC businesses will offer subscriptions by 2023.

Subscriptions benefit customers and businesses. Generally, the DTC company will offer a discount for enrolling in periodic deliveries, so customers save money. Shoppers also don't need to remember to shop for commonly used items, like coffee or razer blades. In turn, businesses gain repeat sales and loyal customers.

The top subscription categories for lifetime customer value include pet supplies, food, and coffee. Successful brands have also leveraged plenty of other products, including wine, razer blades, beauty, and fashion.

DTC marketing doesn't need to be all or nothing

No doubt, DTC marketing offers multiple benefits. At the same time, lots of companies prosper with multi-channel distribution. For instance, many famous traditional brands recently began to sell directly to consumers. Examples include:

• Nestlé: This well-known company launched its DTC business by giving away over 20,000 coffee samples in the first year. Customers had to visit the company's website to claim their samples, and the company turned many samplers into repeat customers.

• Unilever: Many people don't recognize Unilever, but they know about Lipton Soup and Dove Soap. Unilever also owns Maille Mustard, a brand since the 1700s. Unilever now sells this mustard and other premium products directly to customers through a website.

• Nike: Traditionally, most people purchased this famous brand of athletic shoes at retail stores. Nike discovered they could improve profits by selling online directly to customers. According to CNBC, the company has set a goal to conduct 30 percent of its business directly from customers by 2023.

Thus, businesses that already sell through distributors, retailers, and wholesalers may still have an opportunity to expand their market with DTC sales. At the same time, sellers may take a considerable risk by leaving established marketplaces.

For instance, 60 percent of online shoppers visit Amazon, and about 40 percent visit Walmart's website. Beyond the two biggest retailers, eBay, Target, and many other online marketplaces command large shares of consumers who search for products online.

DTC businesses can sell for retail prices and skip paying seller's fees by offering products through their sites. Still, these businesses will need to invest in marketing to make up for the traffic that popular marketplaces already attract. Thus, a DTC marketing firm may advise clients to develop a hybrid model that involves both direct sales and retail marketplaces to take advantage of the benefits of both business models.

Gain more insights into DTC marketing

For more insights about shoppers' preferences and the most popular DTC categories, download Bigeye's report, Retail Disrupted: What Shoppers Want From Brands Today.