What Does It Take for a DTC Brand to Stay Competitive?

What Does It Take for a DTC Brand to Stay Competitive?

Interview by Nikola Djuric
Published: March 20, 2024

For a direct-to-consumer (DTC) brand to scale and become competitive, it must have a stable technology foundation to facilitate online shopping experiences on par with modern-day expectations.

The idea of customer feedback is critical, as brands should always be learning from their customers.

Think of the voice of the consumer and website heatmaps to better understand customer behavior, which enables businesses to identify places on their storefront where customers face usability issues.

Web design agencies are there to help brands overcome obstacles on their road to expanding their eCommerce business.

DesignRush had a chance to speak with Anatta CEO Nirav Sheth to learn everything related to the DTC eCommerce model as well as trends emerging in 2024.

designrush

Who Is Nirav Sheth?

Nirav serves as an advisor to entrepreneurs and enterprise CEOs while leading Anatta’s partnerships with the industry’s fastest-growing DTC companies. As a DTC thought leader, he has served as CTO during the largest growth stages of industry-leading brands, including WeWork, Athletic Greens, and Rothy's. 

There are a lot of challenges in DTC, including:

  • Tech instability – Having bootstrapped too many solutions together for too long
  • Usability friction – DTC brands face reducing usability friction across their websites

Agencies such as Anatta help brands stabilize their technology and increase efficiency, ensuring that their technology investments deliver long-term value.

They prioritize data-driven, research-informed approaches to website redesign and optimization, leading to a better consumer experience and more purchases.

Great customer experience, as we know, requires personalized messaging that will resonate with your target audience.

AI Can Enhance Personalization Features Your Platform Offers

Emerging technologies, such as generative AI, can enhance personalization features and support brands' customer service teams.

As Nirav suggests: "AI tools can enhance your personalization features like product recommendations, write product copy, or help you create product imagery. AI can also support your customer service team by keeping a database of your internal processes."

However, it should be used thoughtfully with to goal of improving, and not replacing your team's work.

"AI still isn't at the level it’s often made out to be, and trying to become too reliant on this tech will likely hinder your business more than accelerate its growth," our guest concludes.

How Should Businesses Approach Personalization?

DTC brands should focus on segmentation to differentiate themselves and craft content that reflects the conversations they lead with their audience, and those created by their customers.

"Learn about what your clients need through popup polls, implementing a quiz, or analyzing which customers are clicking on which ads," Nirav recommends.

Web design agencies use both quantitative and qualitative analytics to shape DTC strategies and determine areas of the customer journey that need improvement by focusing on solutions that deliver value.

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Key performance indicators (KPIs) like conversion rate, repeat purchase rate, and customer lifetime value (CLTV) should be monitored to ensure a successful eCommerce presence transformation.

"A high conversion rate will illustrate that customers enjoy shopping on your site, love your products and that acquisition efforts are paying off," Nirav explains.

"However, a high repeat purchase rate (CLTV) can illustrate that customers who convert once, are likely to convert again."

"When you have this happening, you’ve built a community of loyal customers who not only share your products with their social circles but will continue to support your brand’s long-term growth."

Wholesale Brands Are Transitioning to a DTC Model

Wholesale brands, such as Nike, Adidas, and VF Corp. have begun relying more on the DTC model during the COVID-19 pandemic.

Now, the market seems to be flourishing even faster.

Wholesale brands can transition to a DTC model by launching a website using platforms like Shopify Plus and focusing on DTC marketing to find channel market fit.

"It’s ultra simple, reasonably priced, andeffective. Start with what you already know works from the content & media perspective, and then continue to iterate until you get it dialed in," Nirav concludes.

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He expects the DTC market to become even more competitive, with businesses again focusing on growth rates instead of just profitability – the situation that marked the whole economic recession.

"With signs that the U.S. economy is trending to a good place, brands are focused on expanding their reach via omnichannel strategies, more wholesale partnerships, and opening their own brick-and-mortar locations."

"More brands may take their shot at an IPO, and some may get acquired," Nirav says.

DTC brands should remain competitive in the upcoming years by migrating to a sound and scalable tech platform if they haven't already done so.

However, brands should also consider branching into:

  1. Omnichannel
  2. B2B eCommerce
  3. International eCommerce

These ventures will continue to grow and offer DTC brands great opportunities to reach new customers and solidify their market position.

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