Yael Kochman
July 31, 2024
As we explore new ways that marketing and retail trends have changed over time, Track 3 of Re:Tech Disrupt taking place earlier this month focused on Marketing and DTC (Direct to Consumer).
The retail and ecommerce environment has changed drastically with the onset of artificial intelligence (AI), a word that was once the future, but has now become the very, very real present. The D2C model has led to the rise of new brands and experiences, making it a significant market valued at $170 billion in 2023 with a projected annual growth rate of 15%. 20% of growth is coming from emerging D2C brands like Warby Parker, Casper, and Dollar Shave Club.
Plus, technological advancements such as AI, e-commerce platforms, and advanced analytics are driving the D2C growth. These technologies enable brands to gather consumer data, tailor offerings, and improve customer satisfaction.
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Transitioning to a direct-to-consumer model presents challenges for large companies. Celso Borges from PepsiCo noted, “We need to start looking at lifetime value and longer-term ROI… We’re not used to that.” In contrast, smaller brands benefit from their ability to be more experimental. Alon Partuk of Octup emphasized, “When we started to target the interface according to the client’s gender, we saw a huge increase in conversion rates.” Leveraging AI and advanced analytics for hyper-personalized customer experiences is crucial. PepsiCo’s “Consumer DNA” platform integrates data to target precisely, while emerging brands showcase how personalization drives significant results.
Increasing data privacy regulations require marketers to strike a balance between personalization and privacy. Celso Borges highlighted the importance of transparency, stating, “As much as the data you capture or ask or get from consumers, it’s clear to them that you’re providing a better experience from it.” Marketers need to ensure that data collection is transparent and enhances the user experience to build long-term trust.
High-quality storytelling and creative content are vital for engaging customers. Jay Davis from Pillow Cube noted, “AI is pushing us to go back to being better storytellers and better marketers. Creatives now need to be very good at writing prompts and using AI.” This trend underscores the need for ongoing innovation in AI and analytics to drive effective DTC marketing strategies.
Eran Tor of Tor Group emphasized the importance of emotional connections and community in retail. He stated, “The basic premise of everything we do is really creating smiles, making people smile because we know when they smile… that’s where we see loyalty and emotional connection to our brands.” By designing stores to reflect local culture and fostering a sense of community, brands can build strong customer loyalty. Tor also highlighted the concept of “retail-tainment,” where employees act as entertainers to provide an engaging customer experience.
Balancing efficiency with customization is a significant challenge for global DTC brands. Eldad Rothman of GlassesUSA emphasized the role of technology: “We used a lot of historical data to predict the right level of inventory, which was crucial as we managed over half a million units with more than 15,000 SKUs.” Vivek Kumar from TeePublic added, “Map your business processes end-to-end, identify bottlenecks, and then deploy automation where it will have the most impact.” Leveraging automation and analyzing customer data are key to maintaining efficiency while offering personalized products.
Amy Gershkoff Bolles, Former Head of Global Digital Strategy at Levi Strauss & Co., addressed the importance of innovation despite margin pressures. She warned, “While this is a strategy, I think this strategy is a mistake because right now there’s so much opportunity in digital and AI. If your company is sitting out the innovation, you will be leapfrogged by your competitors.” Her strategies for balancing innovation with profitability include:
Overall, the marketing and direct-to-consumer track highlighted how these have both evolved owing to the market dynamics of our times, with actionable takeaways of how to grow a business from grounds up.
To watch the recording of this event, please register and view here.
