Direct-to-consumer (DTC) disruptors are storming onto the scene and growing at a rapid clip, proving that the improbable can become reality overnight: Few expected that buying mattresses out of a box or discovering personal eyewear styles from the comforts of home would become commonplace consumer behaviors, let alone business model blueprints with skyrocketing valuations. DTC disruption can’t be fully explained by the stories of supply chain efficiency and channel strategy that these startups tout, just as overwhelming brand appeal can’t be credited to the minimalist design or flecks of Millennial Pink. Instead, DTC disruptors signal fundamental changes in how consumers choose brands and what they expect from experiences.
At Forrester’s Consumer Marketing Forum in April, we unveiled our latest research that quantifies how consumers’ standards for convenience, quality, and trust are shifting. DTC darlings like BistroMD, M.Gemi, and Purple Carrot represent the modern interpretation of convenience, quality, and trust because of their experience curation, drive to cultivate community, and commitment to transparency, empathy, and values. We’ve written about how internalizing consumers’ evolving definitions of convenience, quality, and trust is table stakes for any incumbent brand striving to stay relevant.
The challenge for legacy brands doesn’t stop there. As DTC startups accelerate these shifts in consumer decision making, they give rise to three key paradoxes that marketing leaders must navigate:
- Consumers seek energizing novelty and simplified choice. We are witnessing an unprecedented moment of consumer experimentation — this lust for novelty combined with acute decision anxiety results in consumers needing the indulgence and remedy together. For example, while 57% of US online adults want the freedom to trial new products, 39% also want brands to curate products for them. DTC disruptors solve this tension by building controlled experimentation into their strategy.
- Consumers seek rarity and easy access. Consumers savor experiences that feel exclusive; they also can’t resist easy paths to value. For instance, 41% of US online adults are willing to open their wallets for experiences that make them feel like VIPs; of these quality-conscious consumers, eight in 10 also appreciate delivery services that make life easier. By anchoring the brand story in a distinct social message and by offering flexible fulfillment options, DTC disruptors prove that consumers no longer need to make the tradeoff.
- Consumers seek brand consistency and brand reinvention. Consumers are quick to express skepticism of large corporations — not because of company size or history but because of inconsistent company values and a perceived lack of innovation. DTC startups articulate values and innovate around them, as consumers favor companies that embrace both core values and constant reinvention. In the words of one consumer, “The highest-quality brands are the ones that offer great service and are always innovating with their products.”
Our forecast analysis reveals that DTC disruption will continue on the fast track — and will tear through certain product categories like clothing faster than others like footwear:
But DTC experiences are resetting customer expectations for brands beyond retail. The more consumers have exposure to DTC experiences, the more consumers want legacy brands to solve for rising tensions. The good news is that marketing leaders don’t need to reinvent the marketing wheel. Rather, they must hone core marketing techniques to get back to what bold marketers do best: Live in the customer’s shoes, create tangible and intangible value, and close the gap between business and consumer needs.