As the world edges ever closer to a post-pandemic reality, brands that have embraced digital strategies are likely to be more prepared to meet evolved consumer behaviors that stick around in the new normal. In light of current trends, direct-to-consumer (DTC) marketing and sales strategies have recently been embraced by several major CPG brands. In addition to meeting consumer desires, DTC brands are discovering a new wealth of first-party data that allows them to learn more about their customers and optimize offerings and campaigns over time.
One of the biggest challenges for brands that are relying solely on traditional commerce strategies is limited access to consumer data and preferences. As brands shift to DTC marketing and sales strategies, they are collecting first-party data, creating databases of knowledge that lead to opportunities to cultivate personalized relationships with consumers, target products to certain audiences and can inform future product development.
In early May, PepsiCo unveiled two new online DTC storefronts that the brand conceived of and executed within the early months of quarantines. PantryShop.com and Snacks.com are the first major moves by PepsiCo to offer food and beverage using DTC strategies. PepsiCo has been very upfront about the benefits the DTC sites offer them in addition to meeting evolving consumer demands. “The quality, fidelity and speed at which we get consumer feedback is just changed by having this direct touchpoint with the consumer,” said Gibu Thomas, Head of Ecommerce at PepsiCo.
The PepsiCo DTC sites sell items from across the Pepsi family of products, including seven bundles of products PepsiCo designed based on what they think consumers want, with plans to refine the offerings as the data starts rolling in. And, while the brand acknowledges the additional revenue streams from DTC are a “part of the equation,” PantryShop.com and Snacks.com are primarily meant to be complementary to PepsiCo’s retail business.
KitKat Bars are a phenomenon around the world, especially in Japan where KitKat enthusiasts can buy hundreds of unusual KitKat flavors. Leveraging the popularity of their biggest brand, Nestle launched a brick-and-mortar KitKat Chocolatory in London’s John Lewis stores and a pop-up direct-to-consumer online shop that also sold many of the bespoke variations the KitKat Chocolatory was offering. “We know how much people enjoy experimenting with new and exciting KitKat flavours, and the KitKat Chocolatory offers a whole new, premium KitKat experience, as well as the chance to create your very own personalised break and have it delivered right to your door,” said Rabia Khan, head of KitKat Chocolatory at Nestlé UK and Ireland.
This is Nestle’s first foray into DTC, other than partnerships with delivery services, and the small, unique and limited nature of their recent DTC effort likely offers more in the way of brand building than a lasting strategy, with Nestle noting “From Tokyo to Toronto, both online and offline, KitKat is reinventing itself as an upmarket chocolate experience with Millennial brand buzz, whilst staying true to its roots.” However, as with all DTC operations, the access to consumer data from the KitKat Chocolatory will allow Nestle to refine future DTC investments.
Brands that aggressively lean into digitally focused ideas, including DTC strategies, should be more able to personalize engagement, differentiate messaging in a way that resonates with consumers and develop customer loyalty now and into the future.
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