Retail Ready In The Age Of DTC

Retail Ready In The Age Of DTC

If all dogs go to heaven, do all successful DTC brands go to retail?

While already on an upswing, the shift in consumers’ journey to the online world was accelerated by the pandemic. More groceries are purchased online than ever before. More essentials like supplements are bought on-demand, or better yet, on auto-reorder. Even fine jewelry saw a shift to online retail in 2020.

DTC is not new. Brands started moving online in the early aughts. But every trend begs the question of its staying power.

Born online

It’s no surprise that DTC brands benefit from a closer relationship with the consumer. These brands own every aspect of the customer experience and sales funnel. Having that data is invaluable to these brands who can use a manifold of tools to hyper-target existing consumers and capture new buyers. Brands know more about what their customers are truly looking for, and deliver customers what they actually need. Once brands find their product’s market fit and a captive audience, attention quickly turns to marketing (look at the rise of social strategies, influencers, digital ad spend) and supply chain so there’s inventory as demand skyrockets.

Brands like Dr. Squatch are reaching a unique horizon. The soap brand spent years building their online business and cult-like following. As a result many have reached, or surpassed, critical mass. For Dr. Squatch, revenue in 2020 was roughly $100 million, most of which from business done online.

So, naturally brands like this one are asking themselves what the next phase of growth looks like.

The future is hybrid

Enter the omni-channel strategy.

In order to continue to grow, DTC brands are acknowledging the need to show up in Brick & Mortar retail environments. Walmart, for example, sells to 275 million people a week globally and operates thousands of stores around the world. Space on shelf means exposure to millions of potential new customers.
Conversely, retailers know they need access to these DTC brands to remain competitive and stay relevant to consumers. Retailers are finding creative ways to activate DTC experiences in-store, sometimes even shifting their sales models and the retail paradigm.

Retooling for the retail space.

For a lot of brands, taking the leap to omni-channel is harder than it looks. While some may see success with their streamlined sales funnels for their product offering, many brands find themselves fighting tough competition at shelf from a branding perspective.

One of the biggest shifts that serves as a rude awakening for DTC brands is being thrust into the world of retail and realizing they’re not ready to compete with other brands from a visual identity and brand guidelines perspective. Many successful DTC brands launch with an MVP approach (minimum viable product) which often results in an MVB (minimum viable brand).

When we worked with Dr. Squatch, a $70M brand at the time, they were eyeing a launch into retail for the first time and needed to refine their positioning and design to better compete with brands they’d previously never had to consider. Our challenge was to take a brand with an already-strong following and create something that could leave a more lasting impression. A brand all about quality suddenly felt more legitimate with intentional, well-crafted design. Trust increases, differentiation increases, and most importantly, customer loyalty increases all which influence sustained growth for the brand.

FatSnax, a successful DTC keto cookie company, knew they’d need to crack into retail in order to continue their growth. They’d built out an MVB (minimum viable brand) at the outset of their DTC journey, however that same brand wasn’t fit to win at-shelf. Removed from the immersive digital world, suddenly their packaging had to do all the heavy lifting that it had never been created to do.

After rebranding with Interact, FatSnax launched into retail with massive growth and success, exceeding their category velocities and quickly becoming one of the fastest moving keto brands in retail.

Back in 2016 we worked with a burgeoning DTC bone broth company aptly named Bone Broth Co. After proving the concept online, they knew they needed to go through a rebrand to create a memorable, distinctive and iconic brand in brick & mortar that represented them as the category leader they wanted to become. We developed new brand positioning, renamed the brand Kettle&Fire and developed a fresh brand identity and packaging. Within 5 years, Kettle&Fire grew to 50M+ in revenue, becoming a leader in the bone broth category.

DTC brands need to optimize their branding for a new retail environment. Many brands cannot succeed online without the use of strategic design – well crafted brand marks, recognizable creative assets and equities, considered communication messaging and hierarchies. Most brand fans are forgiving, when they don’t have something to compare to. But retail abruptly pops the cozy online bubble and fuels comparison and competition. Competitizing a brand through design doesn’t just benefit them at retail, it strengthens all of their digital touch points as well.

The shelf has always been the great equalizer – pitting start-up entrepreneurs, local hometown heroes, successful DTC brands and CPG monoliths into a claustrophobic, uber-competitive setting.

An investment in design is an investment of disruption at the moment of purchase. To stand out amongst a sea of competitors you need to clearly communicate your product position and reflect your brand personality.

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