How DTC Brands Can Cut Through the Competition and Retain Customers

Direct-to-consumer brands are flooding the marketplace, but the consumer is more discerning than ever. Executives from brands M.Gemi and Ministry of Supply and financial service Klarna spoke with Sourcing Journal today for a webinar on the best ways for DTC brands to beat competitors and mitigate consumer fatigue.

Using the right communication tools remains important for connecting with the consumer. Heather Kaminetsky, chief brand officer at M.Gemi, commented that the surge towards email marketing has led to many consumers feeling overwhelmed by the volume of marketing materials. Instead, shoppers have requested more personalized and concise messaging such as SMS.

Live chat has also become popular, particularly before customers complete their first purchase. The panel noted that a big problem for consumers today is the risk associated with shopping at a new and unfamiliar brand — a common case for DTC companies. While both M.Gemi and Ministry of Supply leverage their own platforms and messaging to provide shoppers with as much information upfront as possible, they have also utilized the “try now, buy later” feature that is now available through Klarna.

With “try now, buy later,” consumers place their order as usual but opt for the “pay later” option when checking out with Klarna. They will then receive their items and have 30 days to try the products before they are charged; anything returned within this period will be removed from the total charge. This allows consumers to verify the fit and style of a product before committing to its purchase, much like they would do when browsing goods at a physical location.

“In-store, the aha moment for the consumer happens before checkout, but with e-commerce it happens after checkout,” said Aman Advani, co-founder and CEO at Ministry of Supply. “By switching that around for e-commerce, it brings it back to a narrative that customers are used to and comfortable with.”

“Try before you buy” also benefits retailers. Klarna’s commercial director and merchant development lead Hannah Bravo commented that while return rates were higher in Europe, where the feature is frequently used, the initial purchase amounts were also higher; merchants still saw an increase in net revenue. By reassuring customers that they won’t be charged if they don’t like an item, brands can incentivize them to take risks on new styles.

Fostering customer trust and loyalty can help brands cut through the crowded market and retain customers. Ministry of Supply leverages the “usual channels” of paid search, social advertising and email campaigns, but the company believes that ultimately it comes down to the product. For M.Gemi, listening to customer feedback through the brand’s client advisory board and in-store interactions helps to keep the company engaged with its consumers.

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