Direct-to-consumer (DTC) businesses have been shaking up the retail industry for several years now, but the past year has proved to be a real turning point. Amid COVID-19 stay-at-home orders, DTC became even more attractive to brands as brick-and-mortar retailers faced store closures, supply chain disruptions, and shifting consumer behaviors.
So, how are the industry’s most successful DTC brands navigating the changing retail landscape? Just as importantly, what trends and technologies are expected to shape the future of direct-to-consumer e-commerce?
To bring you these insights, last week we kicked off our DTC Speaker Series with Meng Li, VP of Marketing for personal care brand Native Cos. From its humble beginnings as a DTC startup in 2015 with almost no marketing budget to being sold to Procter & Gamble for $100 million just two years later, Native is an industry disruptor that can teach us all a thing or two about DTC growth. With an impressive background in CPG marketing, Meng is an expert in growing strong teams, channel expansion, and challenging the way CPG brands market their products.
Here are three takeaways from our fascinating discussion with Meng—the replay of which you can watch here—about how Native is evolving its marketing strategies to fuel customer acquisition and retention:
1. Brand Collaboration
Sometimes when brands come together, magic happens. That’s exactly what Native has seen from its recent collaboration with Jungalow by Justina Blakeney—the wildly popular home décor brand known for bold colors, jungalicious patterns, and plants galore.
While a collaboration between a home décor company and a personal care brand seems about as out of the box as they come, “The best brand collaborations are really the unexpected ones,” says Meng. “It’s a great surprise and delight for both your existing customer base and new people as well.”
Stemming from the overarching trends Native was seeing in the marketplace—when millions were stuck at home during the pandemic they turned to keeping plants as a hobby—the Junglaow x Native collaboration has been a winning mashup for both companies. This unique brand collaboration has enabled Native to generate more earned media coverage and get its products in front of an entirely new group of consumers.
2. Channel Diversification
With Apple’s looming iOS14 release—and its unknown but potentially dramatic effect on Facebook advertising—channel expansion and diversification is paramount for DTC brands. Facebook’s official statement on the iOS14 release reveals that “studies show, without personalized ads powered by their own data, small businesses could see a cut of over 60 percent of website sales from ads.”
Fortunately, Native was ahead of the curve when it came to channel expansion. “The fact that we started diversifying channels away from Facebook a few years ago helps because now we have a solid foundation where we’ve got more channels to which we could shift spend if we need to,” says Meng.
As Native continues to explore other marketing channels to further diversify its efforts, Meng says there are a few considerations that are always top of mind:
- How scalable is the channel and how quickly can we scale it?
- Do we have the resources to support this channel?
- How easily and accurately can we track conversion performance?
3. New User Acquisition
Ensuring consistent messaging, tone, and brand visuals has been critical to helping Native build impactful journeys that move prospects down the funnel to purchase. Tailoring the messaging and strategy to each channel in order to optimize conversions has also been an important element of Native’s customer acquisition strategies.
In addition to a heavy focus on consumer education and new user acquisition, loyalty and retention strategies have become a much bigger focus as the brand has matured, grown in size, and expanded into more product categories. While Native currently has a popular subscription program, Meng says that a key priority for her is now thinking about loyalty in a more consistent way.
Although what a loyalty program may look like is still to be determined, one component that sticks out to Meng centers around research. “How do we really engage our most important or VIP customers as part of our brand journey in terms of new innovation, new product development, and getting their feedback along the way?” she asks. “We’ve started doing some of that and I think there’s an opportunity to do more.”
Rising Trends in the DTC Space
As a forward-thinking CPG marketer, Meng predicts there’s a wave of change about to impact DTC brands. As DTC brands mature, they’re having to act more like traditional brands—doing more brand marketing and top-of-funnel marketing, for example. For new and emerging DTC brands, the fast-changing media landscape will present new challenges never before experienced.
“There’s this first wave of DTC brands that built their business off cheap acquisition. Four or five years ago, you could build a pretty successful business just through Facebook without spending a ton of money. I think those days are over, at least for now. If you tried to start a DTC brand today and put 90 percent of your spend in online platforms, the CPM’s just not there,” says Meng. “Moving forward, will it be more about earned media and word of mouth? That’s slower and steadier for sure, but maybe more sustainable in the long run.”
The Future of Conversational SMS Marketing
Email has long been a big part of Native’s marketing mix—and they’ve seen great engagement and performance from it. Native has also started investing more heavily in SMS marketing over the last year and the initial results have been very positive.
SMS is a great channel when used correctly. Rather than using text messagingin the sameway you would email, it’s important to utilize SMS as it’s intended: a channel built for one-on-one conversation. Conversational SMS marketing at scale though—especially with limited marketing resources—is, well, hard.
Without the right approach, that is.
Check out this example from haircare brand NaturAll. In these screenshots, you can see the company has embedded an interactive quiz on its website. After answering a few questions about his or her hair care needs, the prospect enters their phone number in order to receive personalized product recommendations via text message. Quiz data can then be used for personalized SMS marketing via the Intellipse platform, pushed to your Shopify CRM, or integrated with just about any other martech tool you use to enable conversational marketing at scale.
These quizzes aren’t just for fun: They can actually help brands capture nearly 10x more leads compared to just offering, for example, a 15 percent discount incentive. With a conversational approach to SMS marketing, brands can deliver personalized experiences to customers at every stage of the customer lifecycle.
Complacency Is the Enemy of Growth
If you've read this far and you’re hanging on Meng’s every word (like we are) then you'll love her parting advice for DTC marketing teams: “Don’t get too comfortable. Marketing changes so quickly. Things that worked three months ago sometimes don’t work anymore. Keep testing and learning. Be externally focused. Understand what’s going on in the marketplace. Reach out to other people in the industry. Just don’t get too comfortable.”
Want more insights from Meng?
Watch the on-demand webinar to hear what else Meng has to say about DTC trends, the evolution of DTC marketing at Native, and how SMS marketing can be used to strengthen customer relationships.