By Steve Ryan, MD of DTC, Resident

Over the past decade, people’s lives have gradually moved online as we find new ways to connect and are introduced to digitalized options for completing every day tasks. From banking, to shopping, socialising to reading, everything we need is behind a screen, a click away. However, this increasing transition to digitalisation, accelerated by the pandemic, has raised questions about the sharing of personal information and the digital footprint left behind each time we log on and log in.

Data has long helped to inform brands. Businesses have used data as a key component in their marketing and overall brand strategies, helping them to understand customers and show them where to invest their marketing budget. The introduction of the European Union’s General Data Protection Regulation (GDPR) law in 2016 was the first step to make many businesses rethink the way they handle and approach data and sparked discussions around consumer data, and more specifically, their data privacy.

Post 2016, accessing data has become harder and harder for companies as governments and technology firms, like Apple, continue to move to give individuals more control over their data and who has access to it. This change has had a big effect on many businesses, especially Direct to Consumer (DTC) brands. So in this new age, how can DTC brands navigate this lack of access to information without compromising on their marketing strategies?

Where DTC brands currently stand 

To this day the question that many consumer brands are still asking themselves is how do they reach consumers? And how do they work to establish direct relationships with these consumers? Traditionally consumer brands have sold through intermediaries, selling their products via retailers, wholesalers and online marketplace platforms but this way of marketing meant that companies were losing valuable customer insights that were able to help them shape their sales strategy and increase their bottom line.

This then laid the path for a new type of marketing to appear, DTC. This way of reaching consumers, as the name suggests, is more direct, cutting out the middleman via owned channels and e-commerce sites. This resulted in companies turning to targeted advertising on online channels including social media sites such as Facebook and Instagram as well as Google Ads. This way of advertising on these platforms, as I’ve mentioned, allowed companies to access valuable tracking data which allowed them an insight into customers’ purchasing behaviour and pathways.

However, with more changes to the limits of data tracking and Apple’s privacy changes which require apps on their App Store to serve opt-in pop-ups to users to track them for advertising, many, and especially smaller, DTC brands are facing an uncertain future. Without this data to give feedback on the effectiveness of their advertising, many may have trouble informing future commercial decisions. The loss of this targeted advertising also raises the cost of customer acquisition, which has also increased naturally over the years, as it becomes harder to know how to attract and convert new customers.

With Google looking to follow in Apple’s footsteps, this raises the question, where do DTC brands turn to now?

Looking to new revenue sources 

For some DTC brands, stripping it back and going back to basics has been the preferred marketing option. Putting online to the side, more and more companies are turning to direct mail and TV advertising as many people continue to work from home. Mixing revenue streams and not being heavily reliant on one source of customer acquisition has allowed companies to remain cost-effective while navigating the new digital marketing landscape.

The next step for DTC brands looking to continue to market digitally is to find sustainable platforms that can generate a consistent stream of revenue and offer the ‘holy grail’ of data – first party data. Some are looking more towards marketplaces such as Amazon to invest their money as first party data is offered at the point of purchase. For others it’s about going back to the drawing board and re-evaluating everything. Platforms and avenues that were once perhaps overlooked in favour of Facebook and Instagram ads now suddenly seem more attractive. The likes of Youtube, Pinterest and even the use of influencers are being explored by DTC brands as ways of continuing to acquire customers without the added financial pressures.

As this landscape evolves and the restrictions around third-party data and tracking tighten DTC brands will have to look to other options to serve them what they need which may lead to new innovation in the tech marketing space. There is the possibility of brands, in future, paying people for access to their data, whether that be through the local currency or through online currencies such as bitcoin. Whatever happens, the future of DTC marketing is at a point of change and it’s exciting to see the changes that may lie ahead.