The resurgence of direct-to-consumer (D2C) brands thanks to ecommerce and social media is returning retail to where it should always have been, said Brennan Loh, director of international markets at Shopify.
Speaking at this week’s FUTR Asia conference in Singapore, Loh highlighted that the conditions were perfect for explaining the success of many D2C brands, chiefly that thanks to the development of ecommerce, “the internet has become the intermediary, without the third-party middle man,” like Amazon or Lazada.
“D2C brands own their customers, they don’t rent customers from marketplaces,” he said. “That has an enormous impact on the bottom line for small businesses, as there’s no commission fees for third parties.”
This ownership of audience is critical to meet today’s consumer expectations, Loh added, because they want genuine relationships with their brands. By selling direct, D2C brands have that crucial element for success: authenticity.
“D2C brands have an authentic connection to their consumers, built on direct conversations and interactions,” Loh said. “This is what consumers today just expect. Buying through a third party, you don’t know if the actual vendor knows who you are.”
He pointed to the likes of watch company MVMT and Dollar Shave Club that have had huge success selling on their own channels and using social media marketing to forego online marketplaces. Moreover, these brands have strong, unique identities, Loh said, which is very attractive to young consumers who are increasingly tired of the homogenisation of many brand offerings.
“Today’s consumers crave individuality, there’s a real thirst for niche,” he said. “It’s created a huge demand for niche brands to fill this need, and competition can now happen at a micro-level.”
Another advantage selling direct, Loh pointed out, is that the brand remains in complete creative control and is “in the driving seat when it comes to telling their brand story,” as opposed to having to fit the parameters of an online marketplace’s UX design.
“D2C brands control the experience from end to end, which translates to direct marketing value,” Loh said.
Of course, Loh was not advocating that the rise in D2C brands signalled the end of Amazon and its ilk, far from it. But the rapid growth of direct selling, combined with increased consumers expectation of personalised, authentic communication, has given the big players something to think about.
“Intermediaries aren’t going anywhere,” he said. “However, they will have to prove some disproportional value compared to going direct-to-consumer.”