Post on February 8, 2021
Why Direct to Consumer is Changing Commerce as We Know It
The direct to consumer business model is the new normal for online shoppers. 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.
So how can you capitalise on the D2C (Direct to Consumer) model that is changing the eCommerce game? And why is custom packaging a must for direct to consumer brands? Let’s unpack it.
What is Direct to Consumer?
A direct to consumer business creates their own products and have full control over marketing and distribution. This removes any need for third-party companies to sell for them.
Direct to consumer businesses use eCommerce to operate and will generally take advantage of paid social media advertising to target their ideal audiences.
Direct to consumer businesses know how important communication is with customers. The D2C model might seem audacious to set up, however, to many start-ups, it’s more desirable than working with third parties to sell your product and gives brands the power to control their brand narrative.
Read on to learn about why D2C and use of custom packaging is giving start-ups a leg up.
D2C success stories
The direct to consumer model is ideal for small brands starting out with a new line of products as it allows them to take a chance on how their product is released, improved and developed over time.
Many emerging e-commerce brands start out solely online and once established, consider the option to branch out into selling their products within brick and mortar stores.
Australian mattress company Koala has used D2C to successfully target younger buyers and position themselves as the first choice for conveniently purchasing a mattress. The use of cleverly targeted marketing and an easy to navigate online platform with free same-day delivery have cemented Koala as a market leader.
Koala’s model is centred around the unboxing experience, which to many of their customers is fun, exciting and takes the worry that usually comes with mattress buying out of the equation. It also prompts their users to share their delivery on social media, benefiting the company through free word of mouth advertising (the best kind there is!), which has seen them sky-rocket since launch, and allowing them to expand their product offering.
It’s all about online
If you’re scrolling through Instagram and see a sponsored advertisement for a product that’s in-line with your lifestyle, it’s likely this business is using the direct to consumer model.
D2C businesses have the ability to communicate directly to their customers, learn about their consumer habits and hold onto this data. Brands can launch sporadic sales and events online and send email marketing to customers whenever they choose to.
This mightn’t sound like a luxury, however, this was once not an option for brands prior to the age of eCommerce businesses. Direct to consumer brands cultivate relationships with their customers in the most intimate way possible while operating online.
How custom packaging goes hand in hand with D2C
With the direct to consumer model fast becoming the preferred method of business for many online brands, custom packaging has never been more necessary.
Once upon a time, brands would need to rely on the third party to promote just their product and not their brand and brand-values. Brands would need to use advertising on TV and billboards to showcase what their businesses really stood for.
Well, not anymore! Custom packaging has inadvertently replaced the brick and mortar presence. Packaging is a brand’s chance to communicate with the customer, one on one.
Take 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 fast established them into market and sets them apart from any other contact lens provider as it’s visually stimulating and practical, making every delivery a feel-good one.
The packaging is colourful, uses clever copy to communicate with the customer and is an A+ in our books for any monthly subscription box design.
“A very important part of our business is our brand experience, and being a direct-to-consumer business, the packaging is an important customer touch point.” — Dimple
The unboxing experience
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 a brand’s few chances to speak to customers offline, and consistent use of creative packaging can convert once-off customers to full-time brand supporters.
Brand supporters are understanding of a brand’s purpose and product and therefore the end goal of custom packaging.
Although we understand cost is a major contributor, there are ways to offset this to work better with your cash flow. 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!