Time for Bold Brands to Take

The D2C
Opportunity
Joined-up Thinking, June 2020
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What’s your
New Normal?

Covid-19 has accelerated the rise of Direct-to-Consumer brands.

MSQ’s CEO Peter Reid looks at how existing businesses can pivot
to take advantage of their own D2C opportunities.

There has been much written already go back to the way we behaved before – in
about the winners and the losers from the how we work, in how we travel, how we
Covid-19 period and the extent that the socialise and how we shop.
business world will be transformed forever.
But perhaps the biggest lesson for brands
Some of the winners and losers in the is a more general one. One that has been
short-term are self-evident. Much has been a truism across most recent economic
made of the contrasting fortunes of the disruptions and recessions.
likes of Zoom (200% share price increase
since the beginning of the year), relative to
The real winners in the long term
travel groups such as Expedia (almost 50%
down over the same period). And clearly it are, in fact, likely to be the brands
is not a great time to be running an airline
or managing a hospitality group.
who take this opportunity to critically
analyse their business model and who
There will also be major changes to the
world in which we operate. Covid-19 is
look for opportunities in the evolved
already having an effect on every walk post Covid-19 world.
of life. Even if it is in truth hard to know
how profound and for how long the world
will change, it is certainly true we won’t

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1 2020

general acceptance of direct-to-consumer

The End
shopping. Some brands were forced to
engage with customers on a direct level,
others saw the consumers’ captive state

of Retail (at home and with time on their hands)

as something to embrace. And from a

as we
customer standpoint, it helped them to
become more acquainted to and accepting
of direct transactions.

Know It? Look at Nike, for example. In China,

Another day, another high-street retail
victim. On the day I’m writing, Oasis and
Warehouse have announced they are to
close permanently. Others too, such as
Cath Kidston, are walking away from their
entire retail network.
when its retail stores were closed, they
were ultimately able to drive a 30%
increase in sales during the period. And,
as the pandemic has spread globally,
they have achieved similar trends,
including even in North America.

Covid-19 is not responsible for the demise To me, this suggests that for many
of the high-street. But it has definitely
accelerated the demise of bricks-and-
brands, developing a better D2C
mortar as the ‘go-to’ route to market strateg y could be their salvation as
for many brands. For these businesses,
their retail stores have rapidly become an they search for some form of return to
albatross around their necks. growth. But how?
At the same time, it has increased the

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Challenging the challengers
Rejecting retailers, intermediaries and
exclusive Amazon rights in favour of going
direct to consumer may not be new – indeed
a recent study by eMarketer suggested that
in the US there were more than 400 D2C
brands in operation, and that was before the
pandemic hit.
But the majority of these D2C brands -
think hink Dollar Shave Club, Warby
Parker or HelloFresh - were born in
the digital space, positioned as cheeky
challengers ready to disrupt their market.
That won’t be a familiar scenario for many
businesses looking to pivot to D2C.
That doesn’t mean it can’t be done. At
MSQ, we’re lucky enough to have helped
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a number of brands make this transition or
to grow an established, but modest, D2C
channel. And whilst lessons number one
and two in building a strong D2C offer very
much stem from the old adage of having a
great product, priced correctly, there are
further key marketing considerations that
can help any brand take a large step towards
success in this space.
3 ways to thrive
in a D2C world
01.
USE ADVANCED DATA
TECHNIQUES TO
UNDERSTAND AND FIND
YOUR CORE AUDIENCE
One of the reasons that many brands shy
away from a D2C strategy in favour of
working with Amazon or other online
retailers, is that they don’t believe they can
reach their current customers, let alone
their prospective customers, on their own.
However, for many brands this is a
myth. If brands are willing to invest in
data, knitting together (appropriately
permissioned) first party data from
their multiple sources, using advanced
techniques to interrogate them and
appropriately compare with broader 3rd
party data sets, they can build up rich and
actionable pictures of both existing and
potential customers.
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Take Le Chameau, the premium
wellington boot manufacturer. They
assumed that their core customer groups
were country families in the Cotswolds and
other country hotspots.
However, a closer examination of their
data revealed, instead, that there were a
number of hotspots spread in both obvious
(yes, the Cotswolds was one) and more
surprising places. For example, the highest
concentration of high value customers
was in fact in the Surrey stockbroker belt,
closely followed by other home county
commuter zones, where the quality and
heritage of Le Chameau stood out to
become the welly of choice for those
Sunday morning dog walks.
This fresh look at the data completely
revolutionised the way that Le Chameau
went about communicating with their
customers. It changed what they said, when
they said it and how they did it. It allowed
them to understand their audience in a
much more intimate way, and, as such,
target them directly and in a much more
pertinent fashion.
02.
PUT CREATIVITY AT THE
HEART OF YOUR BRAND
BUILDING
All too often, D2C strategies are built
upon an uninspiring set of display and
Google Shopping ads, with a rigid focus on
conversion. Then brands wonder why their
D2C strategies fail.
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In fact, brand needs to be at the heart of
any D2C strategy. It’s no surprise that Nike
was able to drive such rapid results, when
the world knows exactly what’s meant by
‘Just Do It’. You don’t have to be Nike
though – any established, considered brand
will have a clear advantage. We helped
Fortnum & Mason rapidly pivot to a D2C-
first strategy to not just survive but thrive as
the Covid-19 crisis set in. How? By putting
their brand and its quality associations
at the core of our communications. Just
because your distribution model has
changed, doesn’t mean your core values
and brand equity has to be sacrificed, or
even altered, too.
For those with less well-established brands,
investment in the brand itself becomes
even more critical. But it’s not impossible.
As successful D2C businesses, like Rapha
or Dollar Shave Club, have shown, they
can be built in relatively short timeframes.
You need strong creative executions,
rooted in a clear brand promise. It’s bold
executions that will stand out in a crowded
digital marketplace. And with advances
in addressable techniques, a brand’s
personality and beliefs can continue to be
brought to life through engaging, relatively
targeted activities.
03.
CREATE AND
COMMUNICATE A
SEAMLESS, SUPERIOR
EXPERIENCE
For business considering D2C, the devil’s in
the detail. The beauty of D2C is that you’re
responsible for every touchpoint, the tricky
part of D2C is that you’re accountable for
every touchpoint. You need to ensure that
every stage in the customer experience is
up to scratch and that customers feel they
are getting a real benefit.
There are clear lessons to be learnt here from
the challengers and disruptors (even if some
of them are now behemoths) – from Amazon
and Uber to the likes of Monzo and Brewdog.
If any part of a customers’ interaction is sub-
par, they won’t be coming back. Spend an
inordinate amount of time working with your
customer experience experts to plan, perform
and stress-test the journey.
With that in place, you then need
innovative ways to communicate the
superiority of your experience, Especially
if you’re trying to change perceptions. The
fusion of tech can be a powerful ally here.
In China, K11, the luxury shopping mall,
launched a VR initiative using a WeChat
Mini Programme that let customers tour
a virtual mall and shop at 46 individually
branded stores.
Meanwhile for Hertz, we wanted to show
the enhanced experience of booking direct
versus going through an aggregator site, so
we developed ‘Stop Before You Get There’.
An interactive journey planner, developed
via an API into Google Maps, it allowed
you to plan how to make use of your ‘travel
day’, by finding an exciting diversion (for
example a museum, restaurant, beach,
or hidden landmark) that fitted with your
planned route. Thanks to Hertz, you
could turn a wasted day travelling into an
experience all of its own.
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“ For those
None of the lessons outlined in this report
are straightforward and success requires a
clear commitment to the end goal. And what
who are it certainly goes to show is that, in a D2C
world, your entire brand approach needs to

bold enough be meticulously joined-up. Whilst that’s scary

for some, it’s an opening for others – and the

to seize the rewards can be transformational.

For those who are bold enough to seize
initiative, the initiative, there will be the spoils.
For those unwilling or unable to
there will be make the leap, there’s a rather worrying

the spoils. ” chance that they’ll be quickly

left behind.

we are
MSQ
MSQ is home to a group of six joined-up agencies,
helping businesses build emotionally intelligent brands
to attract, convert, retain and grow valuable customers.
We’re the fastest growing multi-disciplinary marketing
group in the UK, offering flexibility, choice and
transparency to clients.

Clients can work with MSQ’s agencies on an individual

basis, or with a joined-up team specifically designed
around their needs.

Contact us
Peter Reid,
Chief Executive
peter.reid@msqpartners.com

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