Companies Can Learn a Lot from Warby Parker
While direct-to-consumer (DTC) companies like glasses provider Warby Parker and mattress provider Casper are experiencing success by operating under the assumption that consumers will try almost anything if there’s value to be had and the risks are low, legacy companies have suffered by not doing the same, Forrester Research noted in a recent report.
With this in mind, the report suggests that marketers adopt what Forrester calls a direct-to-value (DTV) strategy that aims to build stronger, direct relationships with customers.
“What the DTCs are trying to tell you is this: Your consumers will tell you in a moment, in a heartbeat, with a flick of the thumb, if what you’re offering feels valuable, but you’re only going to know that if you’re relating to them directly,” said Ryan Skinner, a senior analyst at Forrester and author of the report, during Forrester’s Consumer Marketing 2019 event in New York in April.
“The primary challenge facing marketers in the coming years is this: Explore how you can get value to your customers more directly, learn from how your customers relate to that value, and then deliver even more value.… It’s not about the channels; it’s not about your delivery; it’s not about your products; it’s really not about you at all; it’s about the relationship you’re able to establish directly with these customers,” Skinner said.
Skinner defined direct to value as “an aspirational approach to customer relationships wherein the brand aims to deliver as much value as it can, as directly as it can, to the customer.”
Companies can implement a DTV strategy through customization, curation, exclusivity, and other features that deliver more value, Skinner argued.
Manufacturers can increase their consumer appeal by personalizing products in some situations, he added.
The report cites snack company Mondelez as an example. It currently personalizes its packaging and has plans to advance its personalization capabilities by etching names and messages directly into its confectionary products.
With regard to curation, the report notes that some product categories encompass a broad and changing set of choices, which allows for consumer involvement in product selection. This is prevalent in the fashion industry, with companies like personal styling service Stitch Fix and designer clothing rental service Rent the Runway already operating in this space.
The report also notes that broad opportunity for curation exists in various industries, citing HelloSkin as another example; the company provides skincare products to people with specific skin needs.
As for exclusivity, the report asserts that some storied brands have an opportunity to create DTC-only product offerings. One such company is Beiersdorf, which leveraged its German customers’ fondness for Nivea products to develop a professional line available exclusively through its own site and stores in its home market.
The report also suggests that companies can determine their DTV ambitions based on factors such as category and brand. A company’s category could limit what it can accomplish, as is the case with DTC company Parachute, a high-end home goods retailer. The company extracts a good margin, but its market is fairly limited to well-off, middle-age urbanites. For a company like Michelin, it’s possible to deliver tires to customers at home, but it’s unlikely that consumers could or would want to install the tires themselves.
The report suggests that companies take stock of the emotion around their brands to determine DTV potential. It cites Nike as an example, saying that the company spent years cultivating an aspirational brand, which allowed it to make a bold move with an autumn 2018 ad featuring controversial former football player Colin Kaepernick. The move saw Nike’s market value rise by $6 billion.