The direct to consumer business model is the new normal for online shopping. Gone are the days of paying the middle man to promote your product. Niche businesses can now sell their products directly to their target market. How can you capitalise on the D2C model changing the e-commerce game, and why custom packaging is a must for direct consumer brands?
A direct to consumer business creates its own products and has full control over marketing and distribution. This model removes any need for third-party companies to sell the product for them. Direct to consumer businesses are often digital-first and use an eCommerce store to operate and take advantage of paid social media advertising to target their ideal audiences.
Direct to consumer businesses know how important communication is with customers. The direct to consumer model might seem audacious to set up. However, it’s more desirable to many start-ups than working with third parties to sell your product and gives brands the power to control their brand narrative. Read on to learn why the direct to consumer model and custom packaging give start-ups a leg up.
The direct to consumer model is ideal for small brands starting with a new line of perhaps unique products as it allows them to truly tailor how their product is developed, released and improved over time.
Many emerging eCommerce brands start solely online and, once established, consider the option to branch out into brick and mortar stores, either through wholesale or their own operations.
Aussie mattress company Koala has complemented the direct to consumer model successfully with the use of smart packaging. The Koala name has become synonymous with the unboxing experience, having been the first mattress company in Australia to throw out the traditional mattress purchase and delivery experience. The Koala mattress is ordered online and delivered on, same day in a compressed package. The brand has capitalised on this fuss-free, fun customer experience, which has facilitated its growth into other key home furnishing areas like couches and even desks.
On the other end of the spectrum, you’ll find fashion brands, which increasingly are operating on a pre-order model. Instead of buying huge runs of styles and reducing prices to clear stock, emerging and exclusive designers in Australia would rather market limited drops and encourage shoppers to pre-order. This way, brands can reduce waste, operating sustainably and ensuring minimal profit loss.
If you’re scrolling through Instagram and seeing a sponsored advertisement for a product in line with your lifestyle, this business likely uses the direct to consumer model.
Businesses using the direct to consumer model have the ability to communicate directly to their customers, learn about their consumer habits and hold onto this customer data. Brands can launch sporadic sales and events online and market via email whenever they choose to. This mightn’t sound like a luxury. However, not too long ago, this was not an option for brands. Direct to consumer brands cultivate relationships with their customers in the most intimate way possible, digitally.
With direct to consumer being the preferred business model for many online brands, custom packaging has never been more necessary.
Once upon a time, brands would need to rely on a third party to promote just their product and not their brand and brand values. Brands would need to use traditional advertising modes to convey their story.
You could say custom packaging has inadvertently replaced the brick and mortar experience. Where in a store you’d have the brand’s DNA communicated to you through visual merchandising, design and even the retail assistant, the packaging is a brand’s chance to communicate this directly to the customer, in their own home. How intimate!
For example, Dimple, an Australian direct to consumer contact lens subscription service that used custom packaging to create a point of difference from their competitors. Dimple’s packaging sets them apart from any other contact lens provider as it’s visually stimulating and practical. The packaging is colourful, in wider and flatter boxes than traditional contact lens boxes. The monthly subscription arrives in mailers that fit neatly inside standard letterboxes.
“An essential part of our business is our brand experience, and being a direct-to-consumer business, the packaging is an important customer touchpoint.” — Dimple.
The unboxing of a product carries a symbolic weight in the cycle of the transaction. When a customer receives your product, you have their full attention, and it’s the perfect chance to make an impact.
Custom packaging has the ability to speak to consumers through authentic physical branding. Packaging is one of your brand’s few chances to speak to customers offline, and consistent use of creative packaging can convert once-off customers to loyal brand advocates.
Although we understand cost is a major contributor, If you think brown box packaging is sufficient, you’re at the mercy of your competitors who have made the unboxing experience much more excitable for your customer — don’t fall behind!