Strategy

How Data Made DTCs the Envy of the Pandemic

Retailers were already looking to better understand their customers. Then the pandemic came.

After generations of leaning on their names, their cachet, their media weight, and their physical locations, major retailers are having an accelerated version of a reckoning that was already underway before 2020 brought total chaos into our lives. Suddenly, function, value, and style all became equally important to consumers. Personalization, adaptability, relevance, and trust have become the ultimate differentiators.  

In an ode to DTCs in AdWeek last week titled “What Brands Can Learn From DTC to Weather the Current Storm,” Jeff Fagel noted the obvious: “Now, after nearly a decade of watching consumers abandon traditional brands in favor of DTCs, the pandemic has accelerated how legacy marketers must adapt and acknowledge that DTCs have hit on something powerful.” 

There are plenty of attributes that enable DTC brands to connect with individual consumers in ways that corporate, impersonal behemoths often fail. But a central one, in addition to maintaining strict control over supply chain, the end-to-end experience, and storytelling, has been data. How DTC brands come to know their most loyal customers and grow by successfully building around their relationships is a process driven by data and outreach. And it's never been more important.

Listening Tours

“Our top request from customers has been to have Soylent in a chewable, bar format,” Soylent CEO Bryan Crowley told Forbes last year, explaining why the company expanded its offerings from drinks. “A lot of customers, especially females, find Soylent to be too physically heavy. Sometimes you need something lighter or to hold you over.”

And, seemingly, in the blink of an eye, Soylent morphed from being a meal-replacement brand to being a company that handles supplementary snacking for the hangry in addition to consumers seeking to optimize and simplify their diets. But let's zoom out a little here. After all, this isn’t an insight a product manager will get by fielding social media mentions or looking at sales figures, but the kind that accompanies assiduous outreach and the savvy harnessing of customer data. 

The story of Soylent is one of a company that bounced back from a disastrous launch by listening carefully. Whether it’s Facebook groups, focus groups, or customer surveys and reviews, the simple act of taking the temperature of your customer base can often be what leads a brand down a new and often better path.  

Data-Driven Connection

What often separates DTCs is that they listen not just through direct contact and outreach, but also through the analysis of data. Unlike many brands, which are blocked from seeing how their products do on partner websites and in physical stores, digital-first companies have unique access to a number of metrics. A detail-oriented DTC can see who is searching for what, what factors lead to cart abandonment, and what changes might ultimately drive a sale that didn’t happen the first time around in the purchase funnel.

Knowing what products are purchased together or having a detailed sketch of a consumer from their social profiles, psychographics, and demographics helps a company target and tailor ads to its consumer. It also just simply helps them communicate with them better and more efficiently. In short, these tools, in the words of one predictive analytics expert, “help companies to understand consumer’s onsite journey from awareness to consideration to purchase, as well as satisfaction and pain points. Companies are then able to improve the onsite experience, grow engagement, and carry out new product development.”

The leveraging of data is often thought about in pernicious ways. And, fair enough! There are plenty of reasons to be nervous about consumer privacy. But harnessing data isn’t just about upselling or cross-selling products or general purchase trends. It’s about a long-term relationship and developing a product roadmap that brings happiness and fulfillment to your most loyal consumers.

It’s the paradigm shift of what DTCs inherently do differently from the others: Focus on the consumer first rather than the product. Have an authentic conversation. Connect.