6 Lessons Retailers Can Learn From D2C Brands

Most well-known direct-to-consumer (D2C) brands have certain things in common: They obsess over the quality of their products and service, invest heavily in branding, and focus on community-building. In short, they are the godfathers of the modern eCommerce customer experience.

Disrupting one vertical after another, D2C darlings from Warby Parker to Glossier, Casper, and more, have been recognized as industry movers and shakers, as they took over market share from legacy brands and retailers and set a new standard for eCommerce, leaving industry giants in the dust.

While no one was immune to the challenges presented by COVID-19, online-first D2C brands were better prepared to attend to the needs and desires of the new consumer that emerged due to the pandemic.

Massive brands and retailers may not be able to reinvent their entire business model in an instant, but over the last year, we’ve seen clear opportunities for them to learn from how D2C brands have handled the pandemic. Here are seven core lessons and key takeaways for retailers looking to improve and innovate their approach to eCommerce and customer experience:

1. Communicate Directly to Customers When Things Don’t Go as Expected

Before the pandemic, D2C brands were known for speedy delivery and second-to-none service. At the height of the lockdowns and border closures, there was a surge in eCommerce traffic as supply chains were disrupted, making shipping unpredictable. Since they could no longer provide the perfect fulfillment experience their customers expected, most D2C brands understood that communicating the situation was essential.

Take for example Blue Apron. The meal kit service experienced a surge of orders from both old and new customers who could no longer eat out at restaurants. Shortcomings were inevitable. Blue Apron maneuvered the situation like most D2C brands would, by focusing on transparency and keeping customers in the loop. They went beyond website notifications to proactively address the issue publicly on social, and as a result, their loyal customers were empathetic to their predicament.

blue apron

Key takeaway for retailers

If you are proactive and strike the right note, you can use mass platforms to get a heartfelt message across during tough times. If your customers aren’t glued to your Instagram feed the way cult brand fans are, you can also leverage on-site chatbots to communicate important messages and answer customer queries at scale.

2. Leverage the Potential of Innovative Technology

Consumers gravitate towards D2C brands because they solve problems that go beyond their products. In many cases — like mattresses and glasses, for example — they sought to fundamentally improve the purchase experience for an entire category by any means necessary. To solve the problems they encounter along the way, they make it a habit to turn to technology.

Warby Parker had to temporarily close physical stores during the early part of 2020 and rely solely on its digital presence. Because of their approach to using technology to improve the frustrating experience of purchasing prescription glasses, they were already set up with innovative apps for Home Try-On and Prescription Check, putting the brand in an advantageous position to cater to consumers staying in and working from home.

D2C brand Warby Parker

Key takeaway for retailers

Innovation may feel like a buzzword, but it’s more important than ever. Now is the time to re-evaluate your tech stack and even your organizational structure to ensure that you can support the new experiences that modern shoppers have come to expect.

3. Eliminate Decision Paralysis

eCommerce offers endless choices to consumers, and while on the whole, they may be spending more online, unlimited options also make it really difficult to decide what you want to buy. This in turn drives shoppers to do more research, check out different brands, and ultimately extends the purchase cycle.

D2C brands dig deep to understand what consumers are looking for, and then they provide just that. For example, Casper takes the guesswork out of mattress shopping. While retailers carry dozens of options, Casper narrows it down to four. This limits comparison shopping and helps customers identify a clear favorite to purchase.

Casper D2C brand

Key takeaway for retailers

It’s obviously not realistic or strategic for major brands and retailers to reduce their offering to four choice items. However, with thousands upon thousands of SKUs, you must help shoppers navigate through your products to avoid decision paralysis.

You need a product discovery strategy that surfaces relevant products for shoppers without forcing them to dig through your inventory. This can start on your homepage with curated product collections based on themes, trends, styles, or even personalized recommendations based on shopper preferences and on-site behaviors. When shoppers click on a product, empower them to easily discover similar and complementary items directly on the product detail page, so they can be sure to easily find the perfect items for them.

4. Put Your Brand Values Up Front

Shoppers want to connect with the brands they buy from. D2C brands form deeper relationships with customers by openly sharing and supporting the causes that matter to them. However, today’s consumers are discerning, so brands must choose causes that authentically align with their values to avoid being publically called out. Following a year with so much social and political turmoil, this is the case now more than ever.

Early on in the pandemic, men’s personal care brand Harry’s brought attention to mental health, a topic often regarded as taboo among men. The message resonated deeply with followers who were happy to see the brand take a stand on something that mattered to them.

Harry's social strategy

Key takeaway for retailers

No matter how massive a brand is, supporting a social cause will bring you closer to your customers. By nature, people want to connect and contribute to causes that are bigger than themselves. Take a page out of the D2C playbook and dig deep to find a cause that is a good fit for your brand rather than choosing a popular charity.

5. Ask for Feedback From Customers—and Come Through

Brands use feedback to understand consumer sentiment, get ideas for product and service improvement, and keep an eye on shifts in the market. However, while many brands collect feedback, few deliver on the changes their customers ask for, and doing just that is how many D2C brands were able to make it so far. Their customers know that they will not only listen but also take tangible actions and show results.

The pandemic has turned many common marketing channels into minefields, as brands and retailers struggle to understand how to best support customers at this time. We saw empathy emerge as a critical quality for brands throughout 2020, and bedding startup Brooklinen took that to heart in their social strategy. Instead of making assumptions, they asked their audience what they want to see on Instagram. And the best part is that they came through with discounts, work from home tips, and dog pics, among other requests.

Brooklinen D2C brand

Key takeaway for retailers

With so many customers, analyzing customer feedback at scale can seem daunting. But therein also lies a massive opportunity: that data is a goldmine and a roadmap for the actions to take to increase customer satisfaction. Use sentiment analysis and natural language processing software to uncover patterns and create a plan of action to follow through on the feedback so you can strengthen your relationship with your customers.

6. Maintain an Agile, Entrepreneurial Mindset

D2C brands are notoriously nimble. They adapt to new trends instantly and constantly iterate on their products to hit the perfect note. While they have the advantage of smaller teams that can quickly pivot, remaining agile also has to do with your approach and attitude toward change.

For example, the Ministry of Supply, a tech-forward fashion brand, created a line of face masks that sold out everywhere. Instead of being satisfied with the best seller, they iterated and released a new and improved version of the mask made from lighter materials that are breathable and moisture-wicking.

Ministry of supply

Key takeaway for retailers

Enterprise retailers may not be able to innovate as quickly as D2C brands, but the culture and mechanisms to facilitate innovation should be present. Re-consider the structure of your teams and the tech you integrate to improve customer experience, both should be optimized to move quickly and respond to ever-changing demands and trends.

D2C Brands & Retailers Alike Must Continue to Evolve in Step With Consumers

While major retailers have been paying attention to D2C brands for years, this past year has been a wake-up call — you can no longer wait for change and innovation to simply happen. The brands and retailers that will win in 2021 and beyond and the ones that are proactive about evolving their approach to eCommerce and customer experience.