The marketing landscape is changing. No longer can major brands and companies “buy†audiences as they long have: As consumers increasingly turn to social media for all needs, wants and desires, businesses must now build and even earn their audience.
The only way? Stand out from the competition. Which is why companies like Häagen-Dazs Opens a new window are redirecting their branding and marketing efforts to appeal to the “Instagram generation.â€
Big brands and companies that once dominated their industries are now losing sales to social-media-savvy challengers with much smaller marketing budgets. While this is especially true of the manufacturing sector, the situation is identical for companies selling direct to consumers.
While the trend kicked off with ecommerce sites such as Amazon and Ebay revolutionizing the direct-to-consumer marketplace through convenience, it’s been accelerated by social media platforms driving new marketing strategies focused on using social data to build deeper connections with customers in order to increase sales.
The shift away from the retailer-distributor model
The era of social media has contributed to an evolution in our online shopping preferences. Where consumers once mainly bought branded products from online distributors and retailers, the tendency now is to shop directly with the brand manufacturers themselves.
As a result, many brands have been transitioning their sales approach away from the traditional retailer-distributor model.
That explains why Nike, for instance, restructured its entire organizationOpens a new window last year to push a direct-to-consumer strategy that could “better serve the consumer personally, at scale.â€
The sportswear giant credits campaigns like SNKRS Stash, through which some users can access exclusive Nike sneakers based on mobile geo-location data, for a 13% increase in revenue in Q4 2018.
In large part, this shift towards direct-to-consumer is being driven by the way social media has grouped consumer data and relationships together into one tidy package for companies to exploit.
Social media is providing brands that make the switch with swaths of in-depth demographic and behavioral data on their customers. The most successful brands use that data to build direct relationships with their consumers.
Connecting brands and consumers
Social media has introduced an entirely new dynamic for direct-to-consumer sales by providing a straight line to the public. Companies are now able to talk “personally†with their customers – and not only during the buying cycle.
If successful, brands can build valuable, lasting connections directly with loyal customers.
Crucially, this relationship travels both ways as consumers actively interact with companies online. According to studies from Statista and Sprout Social, while 59% of Americans connect with brands on social media between one and three times a day, 62% agreed they are likely to purchase something from a brand they follow.
As this relationship continues to develop, companies are tailoring their product design to appeal to digital audiences – especially on social media.
Enter the ‘digital experience’
As the world continues on its digital path, the influence of social media is only growing.
Consequently, direct-to-consumer marketing has evolved beyond simple advertising. Marketers must now ensure that they are driving engagement, participation and sharing as a component of the core marketing strategy of a product or service.
Through these social platforms, brands are now in the same space – side by side, even – as their consumers’ friends and family. This familiarity places these brands as part of their customers’ daily lives.
Indeed, more new, disruptive players across industries are using these direct-to-consumer marketing strategies on social media to take increasingly larger pieces of the incumbents’ pies.
When done right, direct-to-consumer businesses are able to scale their operations at impressive speed – for example, that’s how MVMT became the world’s fastest-growing watch brand.Opens a new window
As a growing number of brands and companies – whether new or already-established, large or small – turn to social media to sell directly to consumers, marketers must remember they should be careful not to put all their eggs in the social basket. While Instagram and Facebook can deliver large audiences, there is no safety net if things go wrong.
Nevertheless, few marketing channels other than social media offer the right type of constant, near-real time conversation with consumers. As such, any marketer developing a direct-to-consumer strategy must ensure it aligns with the company’s social media marketingOpens a new window .