TREND 4
DTC:
taking the direct route
Author
One of the most pivotal shifts in the business landscape in 2021 is the rise of e-commerce with brands going directly to consumers (DTC). From goods to services, COVID-19 has changed the way we buy, forever. Going DTC and bypassing all your traditional intermediaries in the supply chain (from wholesalers, retailers and distributors) is changing the power dynamic in the marketplace with brands and consumers regaining control.
Despite the extremely sophisticated gaming technology and its growing zeitgeist, the industry itself is still an unexplored territory for brands and advertisers to navigate. In addition to the plethora of games brands could have a presence in, there are different ways to engage with players. From in-gaming advertising and commerce, esport sponsorship, influencer partnership to creating a whole new IP, gaming is a fast-moving and complex industry with a global community who wants authentic and meaningful experience.
"In the last two years, not only have we seen an increasing percentage of people in our region making online purchases, but we are also seeing improving sentiment towards online shopping. This shift has resulted in stronger competition amongst businesses, e-commerce platforms and social channels fighting for consumers’ attention. It is critical for brands to better understand the digital economy and change in consumer behaviours in order to develop the right strategy moving forward."
Paal Fure, Northern Europe CEO
dentsu international
While the DTC shift leads to higher margins, brands are also facing a lot more responsibilities to ensure the brand experience is designed with the customer at its core. C-suite leaders must rally every function of the business under the same goal of delivering the best experience possible to their customers.
“Going direct to consumers means brands are getting more creative and innovative in their marketing and customer engagement. One trend, what we call ‘extended partnerships’, is having different industry players partnering together to enhance customer experience and complement each other's product ecosystem. An example is a partnership between a telco and an insurance company working together to drive incremental value to their customers. That said, in both Iberia and Sub-Saharan Africa, digital transformation remains a growth area to be cultivated. We are investing time to help clients better understand the digital economy and devise new thinking and solutions to future-proof their business. The extended partnership and product ecosystem approach will help brands to maximize the use of data to enhance customer experience, especially in a cookieless world.”
Andre Andrade, Iberia & SSA cluster CEO
dentsu international
The growth of mobile commerce also drastically reduced the barrier of entry for new brands in 2021. That said, mobile commerce does not tolerate friction. With more than half of 2021 online sales taking place on mobile (Source: Forrester), optimizing mobile capabilities and experiences must be a key strategy for brands adopting the DTC model.
“The growing digital adoption in the Middle East and North Africa region is showing incredible potential when it comes to e-commerce. Electronics, fashion, beauty, and grocery are MENA’s most popular segments. Consumers are not only getting comfortable with online shopping, but they are also buying more on mobile. We are helping clients to integrate their marketing platform to strengthen their connected customer experience and create mobile-first experience that delights their users.”
Tarek Daouk, MENA CEO
dentsu international
What should brands do in 2022?
No matter which country you operate in or how mature the digital adoption is, DTC is here to stay. For brands who have started their e-commerce capabilities in 2021, 2022 should be the year where you invest time and resources to ensure a scalable architecture and alignment across all business units. As DTC is a business model not a marketing tactic, it is critical for all business units to have the same objective and vision. When Nike shared its DTC vision to its shareholders, it declared, from supply to deliver, 2x Innovation, 2x Direct and 2x Speed to meet and exceed their customers’ expectations (Source: Nike).
For brands who are ready to shift to the DTC or a hybrid model, being customer-centric and using data and behavioral insights to better understand your customers should be the first step. Subsequent investment in interoperable technology platforms that enable personalisation and localisation of customer experience safeguards consistency in brand experience and profitability.
For e-commerce only brands, implementing a mobile-friendly buying experience can drastically increase the overall conversion rate. For brands looking to converge digital and brick-and-mortar experiences, investing in mobile technology can be a good entry point (think of mobile checkout and discount, augmented reality, QR-code, loyalty programs, automated queue management, etc.) in 2022.
Get in contact
Talk to us about your DTC needs in 2022.
