3 Attributes of a Successful DTC Product

By Rob Medved, CEO, Cannella Media

Direct-to-consumer (DTC) e-commerce sales are projected to reach $151.2 billion in 2022. DTC sales continue to gain momentum, and the pace isn’t slowing, with 65% of consumers planning to buy more from DTC brands in 2022.

 

These numbers speak volumes about the DTC movement. The 2021 DTC Purchase Intent Index from Diffusion reveals that 43% of Americans are already familiar with DTC brands. Of these, 69% have purchased at least once from a DTC brand in the past year.

 

Regardless of the unique way DTC brands do it, they all have a few things in common –ultimately solving a specific problem in a marketplace.

 

Some of the most successful direct-to-consumer products share three primary attributes.

 

#1: Creates Great Value and Disrupts a Marketplace

Successful DTC products are great at disrupting a bloated marketplace by creating better value than dominating brands by eliminating the slow, dated, and expensive middle ground between the consumer and great products.

 

Many consumer markets are already oversaturated, with a handful of brands dominating them. To disrupt these markets, successful DTC brands offer products of comparable quality at a much lower price point.

 

Take the shaving market, for example. At one point, Gillette’s high-tech and multi-blade offerings dominated the marketplace. Using the cheap-razor-expensive-blade model, the brand had the strongest presence in the industry, garnering a whopping market share of 70%.

 

Dollar Shave Club entered the marketplace with a direct-to-consumer model bypassing the expensive retail mark-ups, enabling them to sell similar high-quality razors at a fraction of the price. The DTC brand differentiated itself simply by offering a premium shaving experience at a more affordable price. Contributing to their growth potential, Dollar Shave Club now owns the customer and can sell them replacement blades via continuity.

 

As a direct result, Gillette’s market share shrank to 54%.

 

The same approach worked for Warby Parker, disrupting the market for designer eyewear. Previously, the marketplace was saturated with high-priced designer brands such as Armani, Burberry, Ray-Ban, and Prada, with a single company, Luxottica, holding the licenses to all these brands. The company sells these products at extremely high margins through its retail brands like Sunglass Hut, LensCrafters, and Pearle Vision.

 

Warby Parker took note and entered the market by offering DTC designer eyewear at affordable prices. The brand further differentiated itself by providing seamless shopping experiences through free at-home try-on and virtual try-on options.

 

#2: Makes Life Simple and Easy

 

A successful DTC product simplifies things for consumers. It makes life easier – whether it’s by minimizing the need for in-store visits or by saving time in the kitchen.

 

Brands such as Casper and Purple are great examples of DTC brands profiting from this approach. They take away the unpleasant experience of buying an expensive mattress in a furniture store from someone who’s clearly out to get a commission. Instead, they lowered the cost and have figured out a way to deliver mattresses right to their customers’ doorstep.

 

Meal subscription services such as Blue Apron and Hello Fresh also arose from the same principle of making life more convenient. They address a few common problems – the inefficiency of cooking every night, trying to figure out a new recipe every time, and the frustrating experience of walking supermarket aisles contemplating what to eat.

 

They allow their customers to save time in the kitchen by delivering meal kits with prepped ingredients and easy-to-understand cooking instructions. Customers can select recipes they want to try and have them delivered at whatever frequency fits their needs. It is no surprise that the global meal kit delivery service market saw exponential growth between 2016 and 2020. In 2021, the market size was valued at $15.21 billion.

#3: Solves a Problem in a Unique Way

Some direct-to-consumer products succeed by taking a unique approach to solving common problems.

 

Take brands like Hims and Roman, for example. Countless products already exist in the market for issues like hair loss and erectile dysfunction. However, these DTC brands take a unique approach by addressing the embarrassing experience of seeking out these products in person.

 

Realizing the sensitive nature of these problems, they allow customers to make purchases through an app to get the help they need. Customers also have the option to get the products delivered to their doorstep in discreet packaging. Moreover, they now own the direct customer relationship and can remarket to them in an e-health environment.

 

Nutrisystem takes a unique approach to the classic weight loss program. The weight loss journey can be challenging, from following a rigid workout program to maintaining a healthy diet.

 

To address this problem, Nutrisystem offers pre-packaged meals designed to provide balanced nutrition while helping with weight loss. This unique approach makes it easier for people to follow their weight loss program since they no longer have to think it through every time they want to sit down for a meal. In addition, they don’t have to work out.

Making a Mark in the DTC Marketplace

Direct-to-consumer products continue to grow in popularity. For brands to make a mark in the DTC marketplace, they need to follow these three basic principles:

 

⦁ Deliver products with a higher perceived value than the competition

 

⦁ Offer products that make life easier for consumers

 

⦁ Solve a common problem in a unique way

 

Brands that embrace these proven practices can capture the hearts, minds and wallets of consumers, driving them to action while owning the entire customer journey.