If you’re a regular reader of this blog then you know we’re pretty excited about our Bullseye, a quick and easy assessment tool we designed to help B2C and B2B companies select the right partners and services to grow your ecommerce business to the next level. In fact, we did a three-part series that began with tactics for measuring your business maturity, then moved on to growth, goals and KPIs, and ended with a discussion on how to select the right partners.
Bullseye is a byproduct of our 20 years of professional services. For decades we’ve peppered customers with questions about their goals, KPIs, technical skills, staff availability, existing infrastructure and a dozen other factors that will drive success. Our typical professional services questionnaire can exceed 200 questions, which is entirely reasonable if we are going to design and build a website for a company that will be the foundation of their growth over the next decade. Part of being good at professional services is knowing how to ask the right questions so that we can provide business owners with the kind of advice that will set them up to hit the goals they’ve set.
Bullseye, on the other hand, has a more narrow goal: to help companies assess their business’ maturity so they know where and how to begin their planning process. For that we’ve narrowed down to the essentials, resulting in a 30 question quiz.
Why Bullseye for just DTC brands?
In the six months since we’ve launched Bullseye, we’ve had some great feedback, the most common of which is to refine the questions so that they specific industries. No problem!
As we thought about how to narrow Bullseye, we spent a lot of time reflecting on our own customer base, which has a huge contingent of DTC brands. These brands run the gamut, from small startups that have been in business for a year or less and sell just a handful of products, to very large enterprise DTC brands, like Garden of Life. Some have small Shopify sites, while others have multiple sites running on Magento, all of which are integrated with sophisticated platforms. And of course, we have many customers in between.
We leveraged our experience with the breadth of customers to refine the questions so they help us understand where your DTC business is today, as well as chart out your next steps on your path to growth.
DTC is a channel, not a business model
This time last year the business press and punditocracy couldn’t stop talking about DTC brands. Casper, Allbirds and Dollar Shave Club were the absolute darlings of venture capitalists and enjoying billion-dollar valuations. The IAB hosted DTC-themed conferences, and put together new tools and resources to help long-established brands get a lay of the DTC land. To the IAB, DTC is a game-changing business model because it allows consumer brands to establish one-to-one relationships with their customers, meaning they can legitimately collect, consolidate, analyze and use first-party data. For a P&G or Unilever which rarely sells directly to an end consumer, that’s a big deal.
But here’s the thing: in real terms DTC is a channel not a business model, and it has been that way for the past five years. The DTC brands that have captured the imagination of the business press — Casper, Allbirds, Warby Parker — are now multi-channel. All three brands currently have retail outlets and they sell through other retailers and marketplace. For instance, consumers can pick up a Casper mattress in Costco, Target, on Amazon as well as Casper.com.
The upshot is that when we talk about DTC, what we’re really talking about is a brand’s origins, which happens to be rooted in the digital ecosystem.
Why origins matter
A brand’s origin matters because it has a huge influence on its growth strategy. Brands that are digitally native face a specific set of challenges that differ from the obstacles that a catalog retailer or a brick-and-mortar store will need to overcome.
For instance, unlike a brick-and-mortar store, new DTC brands can’t count on local foot traffic to bring new customers through their doors. This is a huge challenge because the customer acquisition tools for digitally native brands are expensive and crowded. Breaking through the noise via a paid search or Instagram campaign will cost a pretty penny and require constant optimization to be effective. On top of that, customers can’t touch, feel, weigh, sniff or taste products, which means the brands need to find ways to eliminate the risk of the unknown for their consumers. Because survival requires mastering these challenges, DTC brands must develop a mindset and business approach that is different than, say, a brand like Sundance Catalog, which started as a single retail outlet, expanded to a catalog model and eventually added an ecommerce site. Ultimately, of course, all brands will need to embrace a multi-channel sales model if they wish to embark on a path of sustainable growth. The path they take to get there, however, will depend on where they’ve been.
There are many market dynamics that affect all retailers equally, regardless of origins. DTC mega-star Everlane is benefiting from closures of The Gap and Victoria’s Secrets outlets, as are Amazon and the mom-and-pop stores that sell similarly priced-items and are close to where those stores once stood. But reaping those benefits requires a certain level of DTC maturity, specifically, the ability to capture those displaced consumers through multiple channels.
Assessing the maturity of a DTC brand
When we talk to DTC brands about their maturity level, we key in on the way they reach and engage customers. There is a direct relationship between content sophistication and level of maturity. Take Outdoor Voices, an activewear brand that has launched a television channel featuring original programing and documentaries. OV is hardly an outlier, they’re the new normal now that it’s much harder and super expensive to acquire customers on Instagram. Mature DTC brands are devising compelling reasons to engage consumers, and original content is playing a front and center role in their efforts. This is a far cry from simply sending weekly emails with incentives to purchase (a tactic favored by newer, less mature brands).
Of course, content strategy alone doesn’t determine the maturity level of a DTC brand, which is why we cover many other topics in the DTC Bullseye assessment quiz. I’ll tell you more about that in my next blog post. Stay tuned!