Four major categories are selling well in Europe and the United States. The popular DTC is more attractive in this way

Direct-to-Consumer (hereinafter referred to as "DTC") refers to an operating model in which a brand reaches consumers through online sales channels and sells goods directly to consumers . With the advantages of self-control of the relationship with consumers , personalized marketing to tell brand stories , and marketing-driven product iteration , DTC has made more and more "giants" emerge in this track!

BarkBox, a well-known pet products DTC brand, has successfully listed on the New York Stock Exchange this year; Allbirds, a popular American fashion brand, is also about to go public, with a valuation of up to 2 billion US dollars; Warby Parker, the most popular DTC eyewear brand in North America, is also about to go public... According to incomplete statistics, the number of financings for domestic and foreign DTC projects in the first half of this year reached 42! As the darling of capital, DTC is enjoying unlimited glory.

With capital being optimistic and development prospects broad, how can cross-border sellers achieve better results in the DTC track? Below, this article will answer questions and solve doubts for cross-border sellers in terms of DTC consumer behavior insights, emerging DTC categories, DTC operation and development models, and DTC marketing solutions . Let's take a closer look.

DTC consumer insights: Millennials and Generation Z are the main groups driving performance growth

In 2020, the total global e-commerce sales reached $4.29 trillion, a significant increase of 24.1% over 2019. In North America and Europe , relying on social e-commerce, DTC will continue to maintain rapid growth in the next few years . The compound annual growth rate (CARG) of the European social e-commerce market from 2020 to 2026 is expected to reach 28% , among which the fashion category has high growth potential ; 52% of American consumers indicate that 20% of their purchases will be made directly through DTC brands .

The study found that European and American consumers' purchases show the following three characteristics:

1. Millennials and Generation Z are the main groups that lead global consumer behavior and drive the growth of e-commerce performance. 82% of Millennials maintain the habit of online shopping, while this number is 78% for Generation Z. The average number of online purchases per year by Millennials and Generation Z in the United States is 14 and 18 times respectively.

2. Brand value affects consumer purchases. According to a 2019 Criteo survey of American consumers, more than 50% of American respondents said their purchasing decisions were influenced by brand value; 35% of consumers were more likely to buy again after their first purchase because the brand value was consistent with their own beliefs; and 47% of global online shoppers said they had switched to other brands because the brand value violated their personal beliefs.

3. There are many details and multiple triggers that ultimately lead to a purchase decision. Consumer purchase is a complex behavioral decision-making process , from inspiring consumers to understand fashion information, converting it into purchasing behavior, to the experience of payment and logistics, to continuous interaction during the process, and attracting consumers to repurchase, and ultimately increasing the lifetime value of consumers. Each link is a key touchpoint between DTC brands and consumers.

The white paper also shows that DTC brand consumers are concerned about five main purchasing factors: price, product supply, free shipping, product selection, and worry-free e-commerce experience .

DTC emerging focus categories: Fashion, home and garden, health and beauty, and sporting goods have achieved rapid growth

In the post-epidemic era , four core categories have achieved rapid growth, namely fashion, home and gardening, health and beauty, and sporting goods.

Fashion: The pandemic has accelerated the growth of online shopping penetration, with 55% of shoppers in North America and Europe saying they have only made online purchases of fashion (non-clothing) products since the pandemic began. In all regions, the e-commerce market value of footwear and jewelry is the largest among all fashion subcategories, with all subcategories showing growth except for the watch e-commerce market in Western Europe.

Home and Gardening: As consumers spend more time at home during the pandemic , the home and gardening categories have seen tremendous growth, especially with a significant increase in online shopping. In terms of online sales, the home and furnishings category has the highest proportion in North America and Eastern Europe, but in Western Europe it is the gardening category.

Health and Beauty: Although the total market value of health and beauty has stabilized over the years, the scale of online sales continues to show strong growth in North America, Eastern Europe and Western Europe. Among them, beauty and personal care, consumer health have shown strong growth and have a larger e-commerce market size; wigs and skin care categories have great potential, with high growth rates in North America, Eastern Europe and Western Europe.

Sporting goods: Retail sales of the sporting goods category are on a downward trend in both Western Europe and North America. However , e-commerce sales of sporting goods show strong signs of growth, especially in North America, due to consumers' growing interest in sports and home exercise during the epidemic, and this trend will continue in 2021.

DTC brand operation and development model during the epidemic : user satisfaction and user growth need to be focused on

DTC brands need to focus on user satisfaction and user growth. The most important market goal for DTC brand companies is user satisfaction. New user growth is also a very important market goal. These are the factors that drive long-term brand health and sustainable growth.

User growth is brand growth. Users are the basis for continuous value creation. New user acquisition and retention are two core indicators that should be considered in the development of DTC brands.

The importance of attracting new users is reflected in the fact that at the beginning of the establishment of a brand site, a large number of new users are relied on to acquire and accumulate users . The brand's retained users will continue to flow away with changes in preferences and age, while new users will continue to meet the brand positioning . Continuous attraction of new users keeps the brand's user base dynamic and unchanged.

User retention is the process of converting initially unstable users into stable users or even loyal users . Its importance lies in extending the user purchase life cycle, forming long-term loyalty to the brand , and maximizing the lifetime value of a single user. The repurchases generated by retained users can reduce the company's marketing investment and reduce customer acquisition costs. A stable repurchase rate is the support for the sustainable development of the brand. The brand will focus on product innovation and quality improvement to better serve customers and achieve a virtuous cycle of transformation.

The Facebook platform helps drive repeat purchases and long-term loyalty. Among global online shoppers who make multiple purchases on the same shopping site driven by online content, consumers listed the websites/apps that influence their decision to buy again, and Facebook topped the list.

There are more than 400 DTC brands in the world , covering all categories. They are changing consumers' shopping patterns while also gaining market share. As brands, they must highlight their uniqueness and continue to bring value to consumers in order to win. Facebook can drive brand discovery, help acquire consumers and maintain customer retention, provide information for corporate expansion strategies, and use automation to help companies gain the ability to expand and grow.

DTC operation solutions : brand marketing , content marketing , performance marketing

In DTC operations , special attention must be paid to aspects such as attracting new customers, user retention and loyalty, and user stickiness. In the stage of attracting new customers, DTC sellers must do a good job in brand marketing , content marketing , and performance marketing .

Brand marketing : Overseas consumers value the value brought by brands, so it is particularly important to establish DTC brand value. While ensuring that products have a deep connection with users, DTC brands need to pay more attention to conveying their unique brand value to users. While promoting products, DTC sellers can promote brand values , such as adding "donations" and other content that highlights the brand's love values ​​in the materials ; they can also invite consumers to join the action , such as adding interactive forms to the materials, so that consumers can experience the brand values ​​with actual actions while purchasing products.

Content marketing: Cooperate with powerful marketing partners to use KOL resources to reach new consumers and

Facebook has a variety of advertising formats to enhance interaction. Original long video (>15s) content as advertising material can bring higher advertising interaction rate for brands and even better ROAS (compared with 15s video material).

Performance marketing : Media automation, advertising automation, and advertising audience automation are the best tools to improve the efficiency of attracting new customers.

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