Recently, the Interactive Advertising Bureau (IAB) revealed their “250 Brands to Watch.” According to the IAB, “More than 3,500 brands were analyzed before IAB narrowed the list to the most important 250 direct-to-consumer (DTC) products.”
Throughout the course of winnowing down their list, the IAB found certain trends continue to influence the DTC sector, including: the ongoing availability of venture capital (VC) funding for DTC startups, the importance of being on social media and incorporating creative media diversification, the benefits of customization that come with acquiring good data, the rise of DTC brands with revenues exceeding $100 million and the influence of women on DTC, a sector where more than half the founders are women.
From financial technology (fintech) to food delivery, DTC continues to disrupt industries, using new innovations in digital advertising and capitalizing on the changing consumer mindset. Here are four brands from the IAB list that epitomize the growth and insurgency of DTC brands.
After A Major Fundraising Round In 2019, Fintech Brand Stash Launches A Stock-Back Rewards Program
Fintech brands are becoming increasingly popular in the DTC sector, as more entrepreneurs realize many younger consumers don’t want to deal with traditional banks or brokerages and prefer frictionless solutions for their financial transactions.
According to CrowdFund Insider, “during Q3  147 fintechs raised capital for a total of $3.8 billion.” Stash, an innovative fintech, aims to offer parity in the investment world through their app that enables users to incrementally invest small amounts. Stash recently further disrupted the financial industry with the launch of the Stash Stock-Back Rewards Program. Stash Stock-Back allows consumers to make purchases and get stock rewards.
Stash explains, “While most points programs are designed to make you buy/spend more, Stock-Back helps customers build a stronger financial future as [customers] spend on life's necessities. Customers will automatically earn fractional shares of stock on qualified purchases by simply using their Stash debit card, building portfolios that reflect their spending habits by investing directly in the companies [customers] shop, eat, watch, listen and live with.” As of November 2019, Stash had issued more than five million Stock-Back rewards, and, across the company, reached more than $1 billion in assets under management (AUM), with an average deposit of $28.
Most Stash users are under 30, and their average income is less than $50,000 per year. Fintech may have big-money investors, but its aim to democratize banking through DTC solutions is often geared toward younger, less affluent audiences.
Car-Sharing Company Turo Uses Content Marketing And Multichannel Outreach To Increase Brand Awareness
Car sharing, leasing, renting and buying has evolved over the last decade, with consumers choosing many ways to get from a to z. Turo taps into the carless trends with its peer-to-peer car-sharing concept that allows private car owners to rent out their cars, many of which are luxury vehicles.
Turo’s strong content marketing includes the Turo “OpenRoad” blog that keeps site visitors up to date on political, regulatory and travel issues impacting car-sharing services and a “community” page focusing on the success and positive experiences users have had with Turo. The brand has an active Instagram presence highlighting the adventurous side of car sharing, Turo partnerships with brands like Nissan and endorsements from filmmakers including Jimmy Chin, Director of Free Solo. By effectively using cross-channel strategies, Turo connects niche audiences to the issues that matter to them while creating brand loyalty.
Glossier Capitalizes On Successful Trends In DTC Beauty Marketing, Particularly Personalization
“We really want to listen very closely to our audience across all our channels,” said Emily Weiss, Glossier Founder and CEO, when discussing the importance of connecting with customers of the DTC beauty brand. By deploying committed and loyal brand advocates to tout new products and content on social media, creating relatable videos, often including Glossier employees’ daily routines, and opening Glossier pop-up shops where consumers can sample and purchase products, Glossier connects with consumers across channels. Weiss credits 90% of Glossier’s growth to its “hyper-engaged fan base,” and considers Glossier a media brand and a cosmetics company. Reaching consumers in unique, personal ways, especially across social media platforms, is a hallmark of the DTC sector, and Glossier’s more than $1 billion valuation is proof that a personalized, multi-channel, content-based marketing strategy can be effective.
Caviar Offers Food Delivery With A Purpose, Highlighting The Work Of Women In The Food Industry
Caviar, recently acquired by DoorDash, is a food delivery service that caters to hip audiences, partnering with local and independent restaurants. Founded in 2012, Caviar sets itself apart from other delivery services by promoting “economic empowerment and flexible earning opportunities for couriers” and by partnering with other brands focused on social responsibility. For instance, Caviar partnered with Pineapple Collective, a food company that carries products made by women, to launch “Women-Powered with Pineapple” for Caviar apps, which points people ordering food to restaurants with female chefs, founders or team leaders. Younger consumers feel very strongly about brands, like Caviar, that have mission-driven businesses, and DTC brands often have the freedom to engage in social responsibility campaigns as part of their marketing efforts.
DTC, like all industries, will undergo corrections, successes and failures, but it’s clear younger, tech-savvy audiences appreciate the personalized, direct access possible with DTC brands. Brands themselves are flourishing with the opportunities provided by the DTC sector, creating multichannel campaigns, innovative services and engaged audiences.
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