Proof of Concept: What It is and How to Do It Right
Before developing an idea into a product, there’s a crucial step that every business must take: executing a successful proof of concept. Learn more.
As the post-coronavirus era gets closer, no one knows exactly what it will look like, or how the Great Lockdown will affect consumer behavior in the long term. During the crisis, many retailers shifted their focus online, creating a new e-commerce landscape with more competition than ever before. Having said that, direct-to-consumer (D2C) brands are by nature digital-first, so they’ve already got a leg up over traditional B2C brands.
This pandemic is an unprecedented event in modern history, and there are many lessons that D2C companies have learned. These must be adapted and applied as the market moves to the reopening stage. Whether it’s focusing on customer relationships or making the leap to marketing automation, here are some tactics that every D2C will need post-COVID-19.
If you haven't already, check out these post-coronavirus trends:
Unencumbered by the limits of traditional B2C retail, D2C companies are typically more flexible and open to change. This has given D2Cs a distinct competitive advantage during COVID-19, as they were able to rapidly adjust operations and tactics to the changing needs of customers. Even if it meant a short-term drop in revenue, many D2Cs have done a great job in supporting their customers, building community, and grabbing mindshare during an unprecedented and sensitive time. For example, global fitness company Barry’s Bootcamp was one of the first to close its physical studios and immediately began offering at-home workouts via Instagram Live. In this way, they were able to boost their Instagram following from 50K to 100K in just three weeks, reaching all the way to 349K by early May!
Brands that were able to respond quickly and effectively during the pandemic are much better poised to do it again on the other side. D2Cs should maintain that sense of flexibility in all aspects of their business post-coronavirus to help them adapt to whatever circumstances arise as the world returns to normalcy.
According to the IAB Direct Brands 2020 Report, D2C customers value “security and routine” as much as shoppers of traditional brands. However, people who buy from D2C brands typically overscore for values like “hedonism” and “stimulation.” Translation? D2C customers are curious, adventurous, and fun-seeking. In fact, 44% say they are “always on the lookout for brands doing new and interesting things.”
For D2Cs, the pandemic has been a time of opportunity and growth, but it has also seen increased competition as the online market became more crowded. In a post-coronavirus world, D2Cs must ramp up their marketing activities with new and different tactics to keep customer curiosity alive. NuFace, the beauty device D2C brand, provides a good example of this kind of creativity, with Virtual House Calls™, offering 20-minute consultations with qualified aestheticians, conducted over Zoom. Customers can easily schedule their virtual appointment on the NuFace website at a time convenient for them.
After COVID-19, D2Cs must continue with these kinds of out of the-box marketing tactics and promotions to strengthen their brand story and provide value and excitement to target audiences.
A major consequence of the pandemic has been a pullback on digital advertising spending. eMarketer reports that CPM pricing on Facebook ads dropped by as much as 50% in March 2020. The forecast is continued low pricing, with display advertising spend expected to drop between 5.5% and 18.1% across H2, depending on how the economic situation plays out.
Many companies — particularly D2Cs — are taking advantage of reduced ad prices to increase their online advertising activity. If CPMs stay low, cheap pricing will continue, and this may lead to more ads appearing in certain verticals as industries slowly reopen. The fact is, no one knows for certain just how things are going to play out, and for the moment, marketers can only make educated guesses based on current data and predicted scenarios. Therefore, D2C marketers must keep a finger on the pulse of the online advertising situation as things unfold in order to optimize ad spend on a day-to-day basis. And at a time when the data is so uncertain, focus on powerful, targeted ad messaging, rather than straight performance numbers, to get the most from post-coronavirus ad spend.
For additional reading on consumer trends:
One of the side effects of the lockdowns has been a new and refreshing openness in the way that brands communicate, and customers are becoming accustomed to it. D2C cosmetic giant Glossier offers a great example with their COVID-19 updates written by the founder and CEO of the company, Emily Weiss. In her second update published in early April, Weiss not only got personal about her own struggles as a first-time CEO faced with a pandemic, but she also outlined in detail what the company is doing in terms of compensation for furloughed employees and store closures.
In a post-coronavirus world, brands that continue to communicate openly and build honest, authentic relationships with customers are the ones that will thrive.
During the pandemic, D2C brands have stepped up to the plate and adapted towards new, creative products and services to make the shopping experience more comfortable and convenient. For example, the trèStique makeup brand extended a range of special services, like the Selfie Shade Match, where customers could send photos to get personally matched to their perfect makeup shade, or a 30-day Try Before You Buy program (totally unique in the world of makeup), and Live Video Consultations with makeup experts.
Now, as the light is beginning to show at the end of the tunnel and brands are looking ahead, D2Cs must keep up this momentum and continue to be inventive and unique in their services and offerings.
As people increasingly turn to online shopping during the pandemic, D2Cs have unprecedented opportunities to collect valuable customer data that can be leveraged post-COVID-19 to boost customer acquisition and retention moving forward.
This means taking the time now to rethink the marketing funnel and plan out a suitable awareness-consideration-conversion journey for customers after life returns to normal. For example, during COVID-19, many D2Cs are offering free services in exchange for personal details, such as email addresses. Post-coronavirus, a D2C company can build an email marketing funnel to promote its products and services to non-paying customers who were already exposed to the brand. This could include a special offer or discount to entice the audience to convert.
Thirty percent of total marketing budgets are currently being spent on martech tools. Complex, personalized customer funnels will become more critical in a post-COVID-19 era. If it’s not being done already, D2Cs should focus now on streamlining their customer journey with the help of marketing automation.
To learn more about the stages of the customer journey:
The global impact of COVID-19 is unprecedented in living memory. It has been a time of fear, uncertainty, and rapid change. Many great D2C brands have so far lived up to the challenge and served customers well with appropriate branding tone and powerful offers. Once the crisis is well and truly over, COVID-related messaging will no longer be suitable, and a new marketing approach will need to take its place. However, what that should look like is not yet known.
Normalcy will not be restored overnight. Marketers should tread carefully but act nimbly, taking things a week or even a day at a time. By following the tips above, D2Cs can create a powerful marketing strategy for the new dawn of a post-pandemic world.
Last updated on August 16th, 2022.