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The resilience of the DTC model

Discover the key takeaways from our keynote talk at FUTR Europe 2022 where we explored the resilience of the direct-to-consumer (DTC) model in driving success for ecommerce brands.  

July 11, 2022

4 mins read

Catz Thompson

As part of the FUTR Europe event in 2022 and alongside fellow speakers from across the industry, our COO of THG Ingenuity Commerce, Herculano Rodrigues, took to the stage to discuss the resilience of a direct-to-consumer (DTC) model and how THG Ingenuity drives DTC success for our clients.   
Brands today are challenged by a world of increased marketing costs – where 66% of retailers had planned to increase digital marketing budgets in 2022 (digitalcommerce) - making online advertising space a battleground for brands vying for consumer attention. Yet it’s in part due to the volume of brands audiences are exposed to that has fostered the fickleness of consumers and the decline of brand loyalty. In this context brands are seeking ways to differentiate themselves amongst the competition and connect with consumers through their messaging and consistent presence across multiple touchpoints. 
 
Read on to discover the main takeaways from the keynote session which explored the strength of the DTC in empowering brands to succeed in the face of a complex and competitive environment.  

Omnichannel enablement

A successful omnichannel experience begins with customer data, and four out of five omnichannel strategies drive an 80% higher rate of incremental store visits (ThinkwithGoogle). A DTC model enables brands access to such data and to execute activities across a range of digital interconnected channels including branded apps, social media, mobile and chatbots to sell more products and communicate with customers in different ways, while increasing brand awareness and reach.  

The role of the store is changing, with the opportunity for brands to leverage social media influencers or technologies like location-based marketing to drive traffic in store. Amongst many of the ways brands can win at omnichannel, the brick-and-mortar store can now be used as an experimental hub incorporating interactive displays and virtual try-on capabilities, which can be synchronized to branded apps to collect first- party data and reach target customers online, allowing a physical store to become a natural extension of a DTC site.  

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Build brand authenticity through first-party data  

DTC channels have become a primary source of consumer insight, not only helping brands to optimize the customer journey but also develop a brand identity that speaks to audiences’ values and needs no matter where they are in the world.  
 
Such insight enabled THG Ingenuity to support beauty brand ELEMIS in executing a five-year global expansion strategy into a period of just 10 months. Leveraging DTC data and employing localisation tactics across 16 new markets the brand was launched into, ELEMIS saw a 120% increase in revenue March 2021 – November 2021. By using data to better understand customer preferences, demographics, lifestyles and purchase intentions, brands can identify high-value customer segments and map out the customer journey more effectively offering unique and personalized products and experiences that stand out from the competition.  

Drive innovation and growth

It’s not only a brand image that can be informed by the first party-data a DTC model produces – it also gives brands the ability to quickly test and launch new products into new markets, while scaling their business globally using a localized approach. For Revolution Beauty, THG Ingenuity worked with the team to leverage first party data to grow the core mix of the business and create a strategy to cross-sell between licensed launched as core hero products. Across 2021, co-branded products were launched with the likes of Bratz, The Simpsons and Disney, with one single launch driving a 90% uplift in new customers within just three days. As a result of innovation driven by insight, customer lifetime value during 2021 grew by 200%. 

It’s important for brands to remain agile and adaptive towards consumer demands whilst driving their proposition forward. A DTC strategy enables this, with a streamlined approach that cuts the reliance on third-party sellers and minimizes costs, whilst also offering access to first-party data that empowers brands to innovate and evolve with a sense of purpose that makes navigating today’s complex and competitive world that bit smoother.  

Founded in 2004, THG has grown its own ecommerce brands through a DTC approach, developing the likes of Myprotein and LOOKFANTASTIC into leaders in their categories. Leveraging our first-hand experience as DTC brand owners, and through continuous investment in proprietary technology, operations, brand and data, THG Ingenuity was born and now powers the growth of many of the world’s most recognisable brands including Revolution Beauty, Nestlé and Coca Cola.  

If you’d like to learn more about THG Ingenuity’s unique DTC expertise and capabilities, get in touch with us today.

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