There’s more to DTC and Contextual Commerce than Just being Marketers’ New Jargons!

Author: Jagdeep Kochar | Categories: 1:1 Marketing, Business Intelligence, Customer Acquisition, Customer Engagement, Customer Experience, Personalization

Direct to consumer marketing is a vast channel today. Big brands, across verticals, are exploring newer ways to optimize this channel. As per a recent finding by Market Realist, Nike is focusing on the Direct to Consumer channel and intends to grow it by 250% in the next five years! This revelation not only sets the record straight for international markets but also for India.

So, why are brands looking at going direct?

Well, that’s because:

  • There’s a massive demand for a better customer experience

  • Brands can establish a direct relationship with consumers

  • Directly selling to consumers gives brands a better edge and insights into the customer’s buying journey, and therefore better options to capture single views of the consumer

Understanding how the direct-to-consumer methodology works

Traditionally, businesses (primarily manufacturers) had little to no say in how their products or services were marketed to potential customers. There used to be a bevy of middlemen – advertisers, distributors, and sales people – establishing the actual connect with the buyers. However, with time and change in the service industry, businesses are now looking at connecting directly with buyers. Manufacturers today not only want to market directly to consumers but also control the entire buying journey – right from the time a product is available in the marketplace to the time it is purchased by a consumer. There’s a lot of difference now in how commerce happens and how profits are shared between the different participants in the chain.

In a typical DTC scenario, manufacturers are themselves responsible for:

  • Customer experience and the buying journey

  • Making use of the captured (relevant) data

  • Payments and profits

What is it that brands require to go direct?

So, for starters, brands would now need a physical store in the relevant locations or an online store that they can use to connect with and sell directly to consumers. It means (a lot of) investment and a solid marketing strategy to fuel the ideas and make sense to the specific target audience. Indeed, this remains consistent for new entrants in the business as well as the more established ones.

What do consumers expect from businesses that follow the DTC approach?

The millennial consumer needs engagement – she needs the brand she uses to regularly engage with her. She prefers a seamless experience. She may not mind the price, but the experience can surely be a game changer. Undoubtedly, this is what brands need to consider to enhance the connection.

Marketing strategies for businesses that go direct

Digital marketers are experimenting with newer tools and technologies to reach out to a wider audience base and communicate with it. It is no longer about putting up a fancy website and waiting for prospects to come by – todays marketers have to find avenues to simplify the process of ‘being found’ and ‘getting engaged’ with. Remarketing, personalization, and contextual marketing are a few of the topnotch strategies that marketers today are customizing to suit their businesses. While the others are topics for another day, here I am sharing my views about contextual marketing and commerce.

The role that contextual commerce plays in DTC

‘Contextual marketing’ is no longer a jargon found only in the high-level marketing discussions. It is very real and relevant, and closely integrated with contextual commerce. In the day and age when brands are going direct, contextual commerce is playing a major role in reaching out and connecting with consumers. In a nutshell, it facilitates prospects to buy anytime and from anywhere in just a few clicks of a button – even without leaving the platform one is in, which may be an ecommerce platform or a social network. So, it can be a product prompt appearing on a prospect’s Facebook page or a discounted offer on a previously-checked-out product on the homepage of your prospect’s favorite online magazine. In fact, it could be any place!

Contextual commerce is data-driven, realized via sophisticated technology tools such as website analytics and visitors’ preferences. A visitor on your website – desktop or mobile – will leave for you a number of hints displaying her preference and taste. It is for you to capture those cues and leverage them to contextually market to her.

DTC marketers have to capture the data generated across the different touchpoints of a customer’s journey. Whether it is browsing an offer on mobile or checking out the pricing page on a laptop, or viewing similar products on a social platform – brands have to be device-agnostic, and the experience should be seamless. Moreover, every interaction with a prospect should prompt her to make a purchase – the prompt to ‘Buy’ (buy buttons) should not only be omnipresent (across platforms) but the action should also be hassle-free for the buyer. Contextual commerce is incomplete without doing away the irritations of a complex payment process. For brands to directly connect with consumers and make them purchase, the entire journey – from being visible across different platforms to offering a choice of products to finally enabling prospects to convert into customers – should be prompt, measurable, and above all convenient.

The widespread popularity of mobile devices and social media networks have provided a tremendous boost to contextual commerce as they are making the journey across devices seamless for the users. Now, a person who searched online for a smartwatch (on his mobile, while commuting to office in the morning) can find smartwatch suggestions when he checks his social profile (let’s say Facebook) on his laptop, when he is back home in the evening. Amazon is a brilliant example of a brand that offers contextual commerce experiences to its customers.

What to watch out for?

Nevertheless, one needs to take care while using contextual commerce in marketing directly to consumers.

It would be silly to undermine the importance of data, more so ignore the privacy of the information. As per a recent finding, “63% of Indian consumers are comfortable with brands they use regularly, using their personal data to customize website content, emails, and advertising”. This calls for businesses to value the data and privacy and respect the prospect’s willingness to be a part of the revolution that is direct to consumer marketing.

Other than not appearing to be too pushy, overexposure of brands can also have a detrimental effect. So, businesses have to walk the tightrope while contextually marketing to consumers.

How far are you in this (direct to consumer marketing) game?