JULY 2020



What we can learn from the direct-to-consumer model during times of global crisis.

Few business models have received as much buzz as direct-to-consumer (DTC) brands in recent years. Perfectly adapted to the rapid advances in digital communications that allow brands to forge powerful relationships in new ways, DTC also appeared to answer the call for a greater sense of community and connection online. Endless column inches have been spilt on the rise of DTCs, even heralding the death of bricks-and-mortar retail as we know it. Seemingly bottomless venture capital funds have also been poured into the area, resulting in a veritable gold rush.

As with so many things, reality has not always kept up with the hype. Although the DTC boom has given rise to many carefully conceived brands with staying power – beauty disruptor Glossier being a much-touted reference point here – others have seemingly been kept afloat by VC and hype alone. And this was before the global pandemic scythed through our economies, leaving nowhere to hide for business models that don’t add up.

It’s now possible to take a more measured look at the DTC sphere, cutting through the noise and identifying the qualities that truly resonate with consumers. At its best, DTC is an elegant solution for our post-covid times, but we need to avoid drinking the kool-aid of every brand that slaps on the label. Our work at Design & Build in this space has given us some insights here and I’m glad to share them with you now.

The most valuable starting point for any successful DTC brand is truly owning your relationships. Social platforms are great for amplification, but to be worthy of the DTC title you need to create your own terms of engagement, rather than relying on the limitations of Instagram, Facebook and Twitter. This is the only path to fostering a community that truly connects with your principles and product, boosting long term loyalty. From Hims to Casper mattresses, Glossier to Away, you’ll find clear content that embodies the brand and encourages the consumer to enter into a closer relationship.

Owning this relationship is also an invaluable R&D tool – it allows a brand to constantly iterate and evolve its offer, steered by sensitive data and a clear sense of consumer demand. Again, Glossier’s name pops up here, as ex-Vogue founder Emily Weiss grew the billion-dollar business from her beauty editorial blog Into the Gloss. It was through features and comment boards here that she developed her first products, even launching a Slack channel of 1000 super fans to constantly provide feedback and guidance. Other brands such as digital-native winery Winc use sophisticated data profiling such as ‘palate profile’ quizzes to help gather data and glean key insights about consumer preferences.

A content hub approach is nothing revolutionary of course – it was arguably honed by ecommerce pioneers such as Net-a-Porter – but the important point to note is that it cannot be achieved through Instagram Stories alone. Social media platforms are designed to maximise ad revenue for Silicon Valley overlords, not provide nuanced and flexible tools for your brand articulation. To really nurture a community online, you need to make a conscious investment in a unique platform that can articulate the brand values and voice in exactly the right way. It was this insight that led Design & Build to develop the Stella's World content hub for Stella McCartney, as a way to articulate very specific brand values around ethics and sustainability.

Another vital principle is understanding that people are buying more than a product when they opt for a new DTC. If it’s products they’re looking for, then there are no end of standardised brands that have been around for decades and have an incredibly reliable offer. What consumers are looking for when entering into a new DTC relationship is an experience that they cannot get elsewhere. There are many ways to achieve this – personal touches in communication, unexpected moments of surprise and delight, exceptionally streamlined service – but one of the most profound is interactive experiences. DTCs were often pegged in opposition to physical retail, but the most successful have always blended powerful online functionality with offline experience.

South Korean eyewear brand Gentle Monster is a great reference point here, making a vast majority of their sales through sleek online functionality, but investing so heavily in their physical showroom experiences that they became part of the cultural calendar in cities such as Seoul. Collaborating with top designers and artists on temporary store designs, these are more exhibitions than points of sale, helping to garner cultural clout for the brand. Casper’s nap rooms and Harry’s barber shop pop ups are other examples of this trend in action.

Of course in the age of social distancing this is made considerably more complex, and no one has the answers to what this might look like in the next few months. It may be that a magic bullet vaccine allows us to return to business-as-usual sooner than we think, but the smart money would be to double down on developing your digital storytelling capabilities. Augmented online experiences are such a huge topic that I’ll revisit them in a separate article coming up in the next few weeks, but it’s one of the growth areas that we’re very excited about here at Design & Build, and are already deep in conversation with our clients about.

The challenge of coronavirus is like nothing we have experienced before and DTCs are proving far from immune to the economic impact – Everlane has reported 25% drop in online sales, Away a whopping 90% while Allbirds, Cuyana and Rothy’s have all reported drops of undisclosed magnitude. But times of crisis can also be times of great innovation – Billy Ocean got it right with “when the going gets tough, the tough get going” – and it’s now time to look around at this new landscape for learnings and opportunities.

Written by Simon Hughes