In the short term, COVID-19 has leveled many Direct to Consumer brands along with specialty mall retailers and local mom and pop shops. Like it did for the broader sector, the coronavirus revealed financial turmoil and unprepared supply chains lurking beneath DTC brands’ carefully curated images. But there are some bright spots: DTC brands that sell consumer packaged products are reporting a spike in sales, and brands need to innovate.
Companies effectively controlling their supply chains will have the upper hand due to flexibility to adapt to unexpected circumstances, like close down, opening and closing again.
DTCs will hold off on brick and mortar expansion. For DTC brands, Smith called stores “a means to an end”—their primary function is directing traffic back to websites. In leaner times, they’re not a wise investment.
With physical retail stores a question, direct to consumer-first business is probably the best route for a lot of legacy brands to adopt, sooner they venture out the better.
Less clutter means better ROI on Digital campaigns. If a good mix on Facebook and Google is done, then the DTC brands can driven very good mileage.
Investments coming direct to consumer brands are not declining. Building brands will and is a lot cost effective mixing DTC with digital marketing rather than paying registration fees to a big box store.
Restaurants may give rise to new CPG brands. Dining rooms across the country are closed now, but Price Hambrecht explained their recipes could be converted to products sold at Whole Foods or Target. “To me, that’s a whole new ecosystem that may come out of this, and I’m excited to see who will end up leading that charge and bringing these vendors together,” she said.
Building Customer loyalty will become an even greater priority. DTC brands can work in early interactions with shoppers to build a relationship with the brand.
Repurchase is driven from experience of the entire buying cycle, how can this turn into repeat purchase is key.
PR is much more important than marketing, representing or owning a cause and building a cult around it.
For famous brands, going the DTC route should be an opportunity during current times and this segment might present a new business segment not tapped before.
