If you are one of the many drinks companies that have gone online in the last year and started selling direct to consumer you might want to grab a coffee and read on. Here Tom Harvey, co-founder of the specialist drinks marketing agency, YesMore, gives what he says are the four key pieces of advice any brand, retailer or business selling anything DTC need to be 100% on top of if they are going to carry on with a successful e-commerce model.
Running a successful DTC business needs constant attention to ensure every point on the customer journey is working. It’s all so easy to get wrong, warns YesMore‘s co-founder, Tom Harvey.
Like a lot of things, the shift to drinks brands selling direct to consumer (DTC) online was underway before 2020. But as the pandemic sped up so many things, brands had no choice but to re-prioritise DTC, so it took off too.
Consumers couldn’t get their hands on products in stores – and didn’t even want to go to a store. Those used to ordering groceries online from the supermarkets, found themselves unable to get a slot, especially if they weren’t deemed as high risk. And so buying direct was the answer.
Many drinks brands set something up in haste in 2020 – but unlike the ‘return to normal’ after Covid, this is something that many will want to – and frankly should – keep.
At YesMore we supported several clients through setting up DTC and ecommerce offerings before and during the pandemic. Pretty much all of them made up any losses in on-trade sales in 2020 via pivoting to off-trade and DTC – some even grew year-on-year. Those that had built an online audience before the pandemic were in a stronger position too, with an audience ready to buy
The advantages are clear. When customers buy direct, you own the relationship and data. You can drive traffic to a product listing and see when it converts. There’s no reliance on securing and keeping listings from major retailers. And of course, cutting out middlemen can help sales and profit margins. Yes, there are costs involved to direct selling, but the rewards can offset these. Many off-trade buyers will also look at how big and engaged your digital audience is to support listings, so DTC is complementary to, rather than ‘instead of’ retail.
In our view, there are four major things to think about for those who are either on, or looking to get on this path.
1 How does DTC change the look and feel of your brand and communications?
If you’ve always been driving people into retail or on-trade to buy your product, moving into direct means showing the product in a different way. So for example: packaged up, delivery, unboxing, the ritual of pouring a drink at home, the ‘at home’ occasion, etc.
It’s then about building a case for direct purchase being easier and better and showing how much more you get – not just in terms of the product but in the feeling and gratification of buying directly from you.
Margins are higher DTC, so can you give any additional benefits by buying direct? Glassware or merchandise with orders over £XX for example? Then you’ve got branding in that consumer’s home, reminding them to buy direct from you again and again. You can create an Instagram shop to sell and tag branded merchandise in your Instagram posts too – something you can’t do with an alcoholic product.
Think too about what values your target consumers hold dear and ensure you accommodate those – e.g. the sustainability of your postage & packaging, the carbon emissions of delivery, the quality/speed/communication of your fulfilment partner, etc.
Aside from this, there may be new channels, or new ways of using existing channels to consider – SEO, online, social, influencer marketing – see what you have in place and how this can switch to support direct sales.
2 What does DTC mean for the practicalities of marketing and sales?
[Great piece of DTC YouTube marketing from the US online eyewear company Warby Parker. Clear. Simple. Effective]
Here it’s about using creative to support the customer purchase journey – and understanding how that differs in the DTC model. Content for driving SEO is very different to content appearing in Instagram Reels for example. And it’s worth considering how video content can appear on your YouTube channel – the second largest search engine after Google search. Tailoring the ideas for your content to the places that audiences will see them makes your creative, and your ads, resonate.
Technically, you must also ensure consumers don’t land on a clunky site with 10 clicks to basket, etc and set up a programme to test and scale the approaches that work best for you. Which leads me on to….
3 How does DTC change how you define and track success?
If you’re selling direct, what does success look like? For direct online sales, it’s all about testing, learning, optimising and scaling. You aren’t ‘growing followers’, but creating a direct sales funnel.
You might plan an SEO and Facebook driven strategy, but on testing, find that email and Instagram work better. Test, retarget and scale what works – and then continue to test some more – never stop repeating this process. Bring in an expert, or an agency, if you need to unless you have many hours to invest in it yourself.
When testing, test just one thing at a time – but think broadly about what you test. For example, you can vary audience segments, products, type of content (stills/video/blog/audio/etc), even camera angles; the call to action (enter a competition, enter email, buy now, etc), the type of copy (more salesy, or softer? Long, or short?)
Also think about phasing your ads. So phase one might not drive people to buy at all, it might simply warm up your audience with the aim of getting engagements. You can then retarget that engaged audience and a lookalike audience with a harder call to purchase later on. Once you acquire a customer, look at migrating people through the portfolio of products, and driving subscriptions too.
For example, for some clients we know that it’s much, much more cost efficient to use paid social media to only drive email data capture – and then the email marketing drives a higher lifetime value from that customer. But for others we drive people directly to purchase on their website, or to the retailer’s websites or physical stores to support those listings.
How does DTC change customer expectations, and how can you manage these?
The direct benefits of DTC mean that customers feel a greater connection to your brand – when things go well, and when they go wrong. Many won’t hesitate to let you know when their expectations have been let down. Sales, fulfilment, availability – make sure you choose the right partners that will match up to the experience you’re selling. But also, don’t worry about messing up – it’s how you deal with mistakes that’s a real mark of a brand so pay attention to feedback and act quickly.
Use smart forecasting – weather and temperature, bank holidays, Champagne for new years, etc – but also build in flexibility to change messaging and customer journeys when needed.
If you can’t supply the demand, be flexible and responsive enough to switch the marketing call to action from ‘buy now’ to ‘sign up’ and then capture email data. Or drive brand engagement, awareness, and follower growth, or sub out the ‘buy now’ button for a ‘pre-order’ button, etc.
Don’t stop marketing though, or you’ll have a trough in sales later – this way you can continue to acquire new customer leads and keep existing ones warm.
And don’t worry about telling people the exact problems you’re having with fulfilment of their products, especially if you’re small, but also if you’re big.
The key is to be human about it in the same way a pub landlord will say “just changing the barrel, you wanna pay now and I’ll bring it over?”