DTC brands are making a lot of news these days. The new breed of direct-to-consumer (DTC) companies are digital natives and include well-advertised names like Harry’s, Warby-Parker, Peloton and Allbirds, among many others. These smart new players in the retail space offer a limited number of products that they sell directly to consumers through direct channels, typically digital. They’re “cutting out the retail middleman” and going straight to the customer.
These nimble new brands are also smart: They start small, with a small collection, little inventory, and little overhead. They listen to their customers and follow their advice on product improvements, new product lines, and marketing. They rely on customer data to market efficiently and grow their brands. Many have even started building brick-and-mortar locations – often just pop-up shops – to allow customers to see, touch and try on products, while still focusing primarily on their online business.
Overall, these growing DTC companies are characterized by the following traits:
- Largely digital-native brands
- Data-driven – they know what their customers want, and deliver on that
- Strong, engaged and loyal Gen Z and Millennial audience
- Brand authenticity and quality more important than price
- Customer acquisition marketing is the top priority
- Leverage social media to drive customer acquisition – and to understand and engage their audience
- Much of the marketing is managed in-house
But while they’re growing quickly and, to some extent, threatening offline brands, DTCs are not close to critical mass just yet. The majority of these companies are still relatively small, with only a handful generating sales over $1 billion. (Financial analysts consider a DTC company as “growing up” when revenue crosses $100,000,000.)
The DTC model is starting to take hold at CPG companies and other mature entities that are also now selling directly to the consumer. For example, Dollar Shave Club, a DTC darling, was acquired by Unilever in 2016. Walmart purchased DTC fashion brands Bonobos and ModCloth in an attempt to capitalize on the trend.
As these businesses scale up their marketing budgets, their focus starts to shift to awareness, and their ads begin to focus more on the brand – hence the ads you’ve been hearing for Away luggage, Boll & Branch sheets and HIMS, among others. Achieving profitability becomes more critical as private investors look for both ROI and an exit.
Benefits of our Purchasing Programs
Funding your marketing budget with your unwanted inventory or capacity generates incremental new customers above and beyond your customer acquisition benchmarks. Put simply, you’re using capacity in lieu of cash to fund marketing. If Net Trade accepts 20 percent payment in capacity for a $500,000 media plan at your net planning cost, then you will sell $100,000 more units than you would have if you had paid cash for your acquisition campaigns.
Data drives a DTC, and the cost of customer acquisition platforms – as well as business intelligence and attribution platforms – can be cost-prohibitive, yet they’re vital to growth. Net Trade will cover the costs of these platforms, and the only commitment is to purchase a pre-determined amount of media through us.
Net Trade’s experienced team understands that DTC clients occasionally face issues relating to slow-moving inventory, often the result of changes or upgrades in product function and design. Customer returns may also create headaches. We can help with both of these challenges by purchasing all of your slow-moving inventory and returned items, paying the full retail value.
Working with our partner agency, MediaCrossing, we can help you effectively acquire new customers via digital marketing. MediaCrossing is an award-winning, Inc. 5000 agency with a proven history in direct marketing. Powered by best-in-breed programmatic technology, the highest quality third-party data, and a smart, passionate team, MediaCrossing has driven eye-popping ROI for some of the world’s best-known brands in DTC, CPG, entertainment and more. Working together, we provide an end-to-end solution that delivers results for direct-to-consumer brands focused on customer acquisition and brand-building.
Going beyond digital, Net Trade’s experienced team can also develop and place creatives in print, broadcast and OOH media, as well. Our media barter programs can assist brands across every channel.
Contact us today to learn more about how Net Trade can help take your DTC from startup to grownup.
ABOUT NET TRADE
Net Trade offers best-in-class advertising services as currency in exchange for helping mid-sized businesses quickly and efficiently part with unwanted assets. Whether those assets are excess inventory, machinery, unused capacity or something bigger (or smaller), our team of experts can help move those assets without upsetting current channels or partners. In addition to our experienced team, what sets us apart is our digital media practice, which offers data-driven advertising that runs across screens, reaching audiences at the right place, at the right moment, and on the right device. That means that Net Trade clients are able to measurably engage with their target customers, while trusting that their unwanted assets are quickly and expertly dispatched.
Based in Connecticut, Net Trade has already purchased hundreds of millions of dollars worth of assets from some of America’s leading brands, lowering their costs and adding to their media budgets. Founded by some of the most seasoned veterans in the industry, we partner with award-winning agencies and holding companies to deliver the best outcomes for our clients.
ABOUT MEDIACROSSING
MediaCrossing helps agencies and advertisers drive better results through digital advertising. We take a comprehensive approach to achieving client goals: it starts with learning everything about our clients’ customers so we can understand the behaviors that drive them to swipe, click, call or purchase. Using high quality data and programmatic technology, our clients gain access to the same tool set as multinational brands, reaching and engaging targeted audiences at both the local and global level.
Founded in 2012, MediaCrossing Inc. is headquartered in Stamford, CT. Learn more at www.mediacrossing.com