The impact of the epidemic has shifted the attention and consumption behavior of global consumers from offline to online.

In this general environment, on the one hand, Nike, adidas, Anta and other traditional consumer giants have incorporated DTC mode into their brand strategies, and on the other hand, one of the founders of DTC mode, the glasses e-commerce company Warby Parker has continued to expand its losses.

Can DTC mode save the brand? Should the brand embrace DTC mode or avoid it?

DTC (Direct to Consumer) is a business model that bypasses middlemen and directly faces consumers to sell products. Under DTC mode, brands complete product sales through direct marketing, and reach consumers through the Internet, big data and other means to interact with them. The operation of DTC mode includes the following three characteristics:

There is no middleman and users can be reached directly.DTC brands have their own online sales platforms or offline terminals. Products are sold not through third-party intermediaries, but from their own warehouses. Logistics is faster than traditional e-commerce. After removing the middlemen, even if the brand lowers the product price, it can also obtain higher profits than the traditional model.

In addition, when the brand gives away some of the middleman fees saved to users, not only will the user's purchase experience be highly improved, but the brand can also use the profits to optimize the product experience for marketing promotion.

Data enabling. DTC mode is user centered and can directly link consumers. After mastering consumer data, brands can analyze and insight, tap consumer needs, and then iterate products to improve consumer experience.

Build a private domain. DTC mode pulls consumers from the public domain to the private domain of the brand, which can directly and repeatedly reach consumers. The deep and stable relationship between enterprises and consumers can be established, so as to realize the precipitation of user assets, which is conducive to enterprises to create private domain traffic.

DTC success stories

DTC mode originated in the United States. Since its representative brand Warby Parker was founded in 2010, the United States has more than 500 DTC brands, and many unicorn companies have been born. In China, there are also many successful cases of achieving brand growth by introducing DTC mode.

one

Nike

In 2017, Nike defined DTC strategy in its strategic objectives, proposed Direct Customer Offers, and adopted "three double strategies". To this end, Nike reorganized its corporate structure, established new departments, promoted offline direct marketing and digital products, and faced consumers directly. In 2020, Nike put forward the "face to face consumer acceleration plan".

Nike has two DTC modes: official website and offline store. Offline direct stores provide special customized service "NIKEid". Consumers can personalize the color, words and patterns of shoes. In order to accelerate the digital transformation, Nike has also acquired three data analysis companies to obtain consumer habits, behaviors, preferences and other data, so as to provide consumers with fast digital products and services in a more personalized, attractive and sustainable way.

SHEIN is a female fast fashion cross-border B2C Internet enterprise. As a dark horse of DTC brand, its current valuation has exceeded 100 billion dollars, becoming the world's third largest unicorn company.

SHEIN's products are featured with many styles, low prices and fast growth, forming a unique competitive advantage, which is due to SHEIN's adoption of DTC mode in its early days.

SHEIN analyzes consumers' preferences and needs through user data, and designs products in combination with fashion trends, fabrics, popular colors, etc. Therefore, SHEIN has many product styles and keeps up with the trend. Because there is no middleman or store, and it is sold entirely by self operated e-commerce, SHEIN saves the cost of middleman turnover and benefits users, so SHEIN's products have higher cost performance. SHEIN will leave the inventory pressure to itself to reduce the pressure on suppliers, and at the same time, it requires suppliers to deliver goods quickly, so as to achieve the new fast.

In August 2020, Anta, the sports brand, began the transformation of DTC mode from "wholesale retail" to "direct retail". After the transformation, Anta quickly deployed its products to terminal stores through online and offline channel integration and product selection optimization based on big data needs.

On the Double 11 in 2021, Anta will timely adjust the method of preparing goods by analyzing customers' consumption behavior, insight into consumer demand, place the best products in the pre-sale period and the closing period of the Double 11, and increase the proportion of down jackets, down jackets, basketball shoes and women's goods in the pre-sale period. Because of the scientific pre-sale planning, 180000 pieces of Anta down jackets were sold on October 20, the first day of the pre-sale of the "Double 11", resulting in code breakage.

According to statistics, the market size of DTC in China has exceeded 630 billion yuan, and it is estimated that DTC will achieve trillion yuan sales in 2024. In recent years, many domestic enterprises have begun to attach importance to DTC construction. What is the key to brand DTC?

1、 It is to really get through the consumption data within the brand and realize the seamless connection of online and offline data;
2、 It is to continuously invest in the construction of DTC mode and continuously optimize and adjust;
3、 It is to develop customer relations in depth, so that consumers can get a sense of value and belonging under DTC mode.

Today's consumers demand personalized services, seamless multi-dimensional scenarios and high-quality delivery experience. At the same time, the requirements for interactive participation, value and cultural identity of products are also getting higher and higher. As a user centered business model, DTC helps brands meet the needs of consumers and strengthen the link with consumers.