Whilst 2020 was a year of chaos for many businesses, one of the things we certainly noticed was the rise of the direct to consumer challenger brands! 

With everything having to take a giant leap to provide a better online experience, some businesses took advantage of the huge opportunity to scope out their place in the market and compete against some of the biggest players out there with a more personable, flexible service offering.

As an agency that focuses on working in the premium, luxury and lifestyle sectors, it would be rude not to choose this as our topic as we explore some of the market opportunities that have arisen during the pandemic.

This post will talk you through some of our favourite opportunities and brands that have risen in the premium, luxury and lifestyle sectors, but also provide you with some insights on where we see the market going as we move forward into 2021. First, let’s discuss pre-covid purchase behaviour.

Pre-covid purchase behaviour 

Let’s face it, if we went back to 2019 would you have ever considered buying a sofa online? Not only would you be parting ways with thousands of pounds of your hard-earned money, but you’d also not even be able to sit on your dream sofa, get a feel for the colours and how they would fit in your house. My guess to this question is most likely… Hell no!

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Fast forward to 2021

Moving into 2021 we have seen so many brands aggressively tackling the market and challenging the big players that have a brick and mortar presence as well as operating online. Brands have taken to paid social to aggressively position themselves with a striking messaging which helps to provide users with a pain killer to their problems. I call these the pain killer ads!

I’ve chosen to present my marketing example as selling a sofa online because for me its something I have experience in selling using digital marketing, but let’s face it, you can probably also relate to this because during the heights of the pandemic we all spent countless amount of hours every day watching our favourite Netflix series and there’s one thing you want in that case…

2020 really changed my opinion on that one, especially when we won a luxury furniture brand and sold our first couch for over £2,500 directly from a Facebook Ad. Believe me, when I saw this purchase in FB ads manager I almost fell out of my sofa.

The principles of marketing these products were made easier by the pandemic, but it wasn’t just the fact that people had no other choice because the stores were closed.

In my experience, It was all about creating something, simple, easy to return and such a product that provided users with huge amounts of faith that they were making the best choice without even seeing the product in person. If we compared two brands, one that has a unique offer vs. your generic buy a sofa with no trust signals, then the second option is not going to work regardless of the pandemic or not. This was for me the requirement behind the change.

As mentioned above, returns policies also played a huge role here. It’s fair to say that any company selling sofas online must have a lot of faith in their product when they give you long return guarantees and this trust signal gives users the ability to feel less on edge when making a purchase.

One of the brands that I have on my radar, mainly because I am moving house soon is Snug Sofa. They have a really striking message which is “This is a Sofa in a Box (well, it was)”. This message really resonates with me because when living in an accommodation big or small, lifting a sofa into your house is quite frankly just a pain in the arse. Especially if you live in a flat. Don’t get me started on that one… Mine involved moving an entire flat and two cats from Barcelona to Manchester and yes, it was not at all fun!  Here are three of my favourite pictures that make me remember that move… Pay close attention to the last one

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So now you get a feel for my pain…

Another brand I am actually a subscriber to in the D2C space is Lumin Skin Care. I loved this brand when I first saw it online. They use influencers to push their marketing and have a very well structured and aggressive paid social funnel that hits you at every angle throughout the process.

They have also really perfected their email marketing automation which in my experience again is so important to generating e-commerce revenue. Email marketing is the backbone of all successful campaigns and its a great way to segment your audiences to keep them buying as a repeat customer or even get them over the line with a compelling offer as a new customer.

We actually have just been shortlisted in the Global Social Media Awards for the best use of Paid Social for one of our clients and email marketing in the campaign was so crucial to this brand throughout the campaigns that we launched. An added benefit to collecting emails is that you can also use the emails to segment your audiences across paid media channels.

The big thing I really push at Circulate is advert personalisation. Campaigns that drive the best results always have to provide a solution to users problems. That’s when user personalisation comes in and how we are able to maintain a strong ROAS and continue to drive high revenue levels of revenue. I’ll write an article on this another day!

So, back to the D2C space. Challenger brands for me are going to play a big part in the online growth and usage of social media throughout 2021. They come in with a very unique proposition, they don’t have the processes that the larger corporations have and are more agile to move fast with their marketing. I mean, going back to Snug Sofa, they have such a great opportunity to gain market share purely based on the fact they offer a streamlined service. Amazon Prime showed us all the importance of this in 2020.

If you don’t believe me on this one, just check out the Google trends for “Snug Sofa” in the UK over the past 12 months.

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My point has proven – Insane growth, new customers of which are most likely buying far and wide!

The future of D2C

Direct consumer brands in my eyes are going to pave the way forward in 2021. They’re like your mates, they look after you and give you some great personal experiences that you just can’t get with the bigger firms.

It is hard to not take notice of these brands and grow close to loving them as they have personality, something that we all really love. Knowing that there are people behind the brand, people that are all part of the process from start to finish and who have voices as to how the brand is directed will also help to build connections and trust online.

The opportunities over 2021 are going to open up as we see more personable experiences from businesses that think they can do better, and most likely can!

I’d love to hear your feedback on this article. At some point, I will drop a note on my favourite D2C brands.

 

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October 22, 2021

Digital Account Manager