From DTC to retail: How brands are migrating into big box stores — Jacopo D’Alessandris
Due to the impacts of COVID-19, many retailers have moved their business from physical to online platforms where they were able to provide direct-to-consumer services and consumers were able to support the brand directly, rather than going through a middleman. However, as the dangers of infection die down, it is no surprise that retailers are moving back to brick-and-mortar to help return the shopping experience back to normal. I recently read an article published in Banknotes, From DTC to retail: How Brands are Migrating into Big Box Stores by Laura Leiva, which highlights the why behind the question.
“Direct-to-consumer is more about the sales channel than it is the brand.”
Being able to demonstrate what a product can do for you versus seeing it online, are two very different experiences. When a consumer is able to feel and know what a product can do to make their everyday life better, it increases company sales. With the help of word-of-mouth marketing, brand awareness is generated. In addition, customer service is able to form a bond with customers to retain customer loyalty. As many will remember the service experience rather than the purchase itself.
- Emerging DTC brands and the millennial shopper
“Instead of going through traditional channels, why not keep everything in-house and have more control over the product and the relationship with consumers?”
When products and services are delivered directly from the company, the company creates accountability for itself and would pride itself in the delivery process, ie 3–5 business days guaranteed received.
“Features like quick(er) customer service, email campaigns with customer-centric messaging, and branding that spoke to relevant trends and design.”
Likewise, accountability, seeing is believing. When a brand can deliver functionality in person, an impression is what lingers in the customer’s mind. They will remember the in-person they had and are most likely to return for it again.
2. Standing out in a crowded space
Moving into a retail space is reliant on location, foot traffic, and being noticed. If the brand is able to be seen or stand out from the rest of the stores, it means that brand awareness is created, and possibility of a new customer base.
“This benefits both a DTC brand by expanding brand awareness and it also appeals to retailers who want to attract new shoppers — especially those who are less apt to walk into a department or retail store. There’s also the move for legacy brands to compete with DTC offerings.”
Having a retail space, brands are able to perform services they are not able to do online such as demonstrating a product’s function, connecting with customers, showcasing the product line, etc. From DTC to retail spaces may have their challenges but with the listed advantages, it is an investment in the long run.
“Before even opening a retail store, extensive data analysis is done to ensure that a location has active foot traffic and a demand for the service or products.
Depending on the product, adding a brand where there’s demand for similar products is a good start.”
However, not all DTC would be suitable to open up a retail space considering the competition in the market. “As many have learned, the more accessible a brand is for consumers, the better the outcome.”
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