How DTC Strategies Are Shaking Up Fashion

As direct-to-consumer business models become more popular, different industries are finding their own ways to make these kinds of experiences work for them. This has been especially true for the fashion industry. By cutting out markups, leveraging digital technologies, and promoting radical transparency, dozens of new fashion brands are succeeding with DTC. We’ve taken a look at the unique ways specific fashion verticals are taking their products straight to customers, and how they’re differentiating themselves from the legacy brands that came before them.

Whitepaper: The DTC Approach – 4 Aspects to Master

Denim: Simplified Selection and a Digital Storefront

Some products are timeless, but are the brands that sell them timeless enough to survive in the modern retailing world?

The traditional retail model means denim companies like 7 For All Mankind source their designs and fabrics from numerous designers and mills. They stock products their designers and buyers believe customers will like, but aren’t close enough to customers to bet on a handful of choice designs. Instead, like most retailers, they take a shotgun approach. Dozens of slightly different fabrics, cuts, and details make shopping for new jeans harrowing and downright consumer unfriendly. National retail outlets require huge warehouses and supply chains to keep locations stocked with all the varied styles, driving up costs for the end-buyer.

Younger luxury brand DSTLD sells premium denim and elevated basics direct to the consumer and is primarily online (with limited pop-up stores that let customers experience the brand in person). By selling direct, DSTLD is able to focus on quality rather than quantity. Their collection is easy to browse with a color palette of just black, white, grey, and blue. A reasonable price tag is a fair trade for a lesser-known brand name and limited retail stores—plus they use the same factories as many designer labels. DSTLD even allows true fans to invest in the company, ensuring that the brand will remain true to their customers as they grow—because they have direct financial control.

Focusing on a few good items done right at a fair price point is key to tapping into modern shopping trends, and encourages brand loyalty and repeat business by making clothes that become an essential part of customers’ wardrobes. Huge selections and hundreds of retail outlets are no longer likely to breed success.

Designer Fashion: A Closet in the Cloud

While the previous example focused on delivering a product, the new normal for retail also means fundamental changes in behavior. One of the biggest shifts: changing attitudes about ownership. Airbnb, Lyft, and WeWork all meet a desire to pay less in exchange for giving up sole possession. Why own a car when it’s so convenient to ride in someone else’s? Why stay in a hotel when you can stay in someone’s house for less? Rent the Runway provides a similar solution for your wardrobe. Why buy a new dress for every one of your friends’ weddings when you can rent one for a tenth of the cost?

With Rent the Runway, customers can get the same high-quality designer clothing, but without having to own it forever. If you don’t want to show up to every wedding of the season in the same thing, renting just makes more sense, and allows customers more choice and flexibility—they can get a much more expensive piece without worrying about the price tag.

RTR’s direct-to-consumer model adds value that a department store like Macy’s just can’t without majorly restructuring some of their current practices. Without the costly overhead of hundreds of national storefronts, RTR can deliver and scale a new kind of in-store experience without orienting their entire business around it.

Pre-Loved Fashion: Sustainable Style

Millennial consumers don’t feel the stigma of pre-owned items like previous generations. They’re more likely to embraced pre-owned fashion due to its sustainability (and lower cost), leading to a robust market for secondhand goods. New sites like Grailed, theRealReal, and TrueFacet are filling the gaps left between the small, independent, highly-curated boutiques offering clothes and furniture in most major cities. However, Material World offers a service that goes a step further than any of these.

Material World will pay customers for their pre-owned designer clothing up front—making it easy to trade in your lightly-worn items for hard cash. Yet this is just one piece of a bigger system. The Material Box is a subscription service that ships an outfit handpicked by a stylist every month straight to your door. You’re not just getting a sustainable, designer outfit for a fraction of the price, you’re getting unique and totally personalized styling services. The stylist who works with them knows the entire history of their purchases and interactions, meaning they can provide deep and contextual service. That’s a benefit you won’t find at even the most upscale boutique. The box can then be used to send back their own clothing, replenishing their old pre-owned clothes with new ones. Material World supports an ethical system that diminishes waste and elevates the benefits of pre-owned clothing, creating an experience that’s even more appealing and streamlined than buying a designer outfit for yourself.

As the DTC model becomes more popular, the variety and creativity of new DTC brands will only increase. The principles for CX success are clear, no matter which industry you’re in:

  • Adapt to changing customer expectations
  • Always push to innovate with new technology
  • Look beyond the old ways of doing things to find cheaper, faster alternatives

If you can do that, you’re sure to delight your customers and improve their experience. Learn some more aspects of the DTC approach that can help you deliver better service in our whitepaper.

Desk.com is Retiring: Make the Switch to Kustomer

When Kustomer’s founders Jeremy Suriel and Brad Birnbaum started Desk.com, they wanted to reinvent how we manage customers. After years of innovation (and an acquisition by Salesforce), they decided to start again from the ground up. This meant they could create a totally new platform with all the omnichannel communication and features they had always dreamt of. Kustomer was born. Now that Salesforce is going to shut down Desk.com, it’s a good time to look into the stories of the companies that already made the switch to a modern service and support platform for customer experience.

DSTLD: After making the switch to Kustomer, DSTLD was able to launch live chat on their site with Kustomer. They immediately saw higher sales and a higher conversion rate at checkout. “We have many different touch points with our customers, and making sure each one delivers a positive experience is key to our success as a company,” says Laura Gramlich, DSTLD’s Customer Experience Manager.

Sticker Mule: By switching to Kustomer, Sticker Mule cut out the need to go through multiple data sources to get their customers’ full company profile and order history, saving team members valuable time. “Kustomer has increased our customer engagement and decreased our workload,” says CEO Anthony Constantino.

ParkWhiz: Kustomer’s Timeline allows ParkWhiz to offer proactive support, e.g., provide helpful insight about the nuances of Manhattan parking for a user from DC who has just booked parking in NY. The initial impact was an increase of 2-3 percentage points in the retention rate for customers who interact with their CX team versus the rest of their userbase.

Priority Bicycles: As Priority continues to expand their business, Kustomer keeps the pace to help them scale. “That’s something that Kustomer helps us do—consolidate growing amounts of data about our customers so that we can come back to them more quickly and with more knowledge about them,” says founder David Weiner.

WP Ninjas: At WP Ninjas, every employee is responsible for customer service, but their old system had them accidentally starting multiple conversations with the same customer. Collaboration was no longer a problem after they switched. “If you’re looking for a support solution, there is no other tool on the market right now that I can recommend more highly than Kustomer,” says Director of Happiness Zach Skaggs.

Kettlebell Kitchen: Before switching to Kustomer, goal-oriented food delivery startup Kettlebell Kitchen struggled to keep track of all the customers contacting them over phone and email. With Kustomer, they can pull all of these touches into a single stream. “It’s very user friendly, and the integration with Aircall works really well for us. It didn’t work at all with our previous service platform,” says Menachem Katz, their Director of Operations.

SmugMug: SmugMug needed to focus on building deep, personal relationships. Using Kustomer’s search features, they were able to easily identify segments and give them specialized support and service. This was especially important for helping new customers who migrated to their service from competitors who went out of business. “Kustomer helps us truly know our customers, and not just respond to them,” says Ben MacAskill, Vice-President of Operations.

Don’t wait any longer, the modern service platform you’ve been looking for is here.

How to Turn One-Time Shoppers Into Repeat Customers

What we learned from our webinar with DSTLD and Optimove

How do you keep customers coming back? Our latest webinar answers just that question, and features DSTLD Customer Experience Manager Laura Gramlich (read our guest post from Laura here) and Optimove Solutions Engineer Leigh Noy, hosted by our own Senior Manager of Marketing Programs Stacey Dolchin. We discussed how to build loyalty with the rush of customers that companies acquire during a busy period. Whether that’s holidays, product launches, or special events, you need to prioritize loyalty and retention to be successful.

Our conversation with DSTLD and Optimove brought up an array of useful insights for dealing with these issues, perfect for any brands looking to build a stronger relationship with first-time buyers.

DSTLD is a brand that prioritizes their end-to-end experience to turn their customers into diehard fans. By selling high-quality denim and basics directly to consumers at a fraction of the price of bigger brands, they’ve struck a chord with fashion-enthusiasts. Their unique offering drives interest, but it’s important to keep these shoppers coming back for more. DSTLD has a few strategies for this:

Individualized and Personal Customer Service: By integrating their existing shopping platforms with Kustomer, they can view orders and customer conversations together. By having this information in one timeline, it’s easy to deliver fast, intuitive assistance.

Real-time Chat: One of the highest rates of drop-off for an ecommerce site occurs when a customer has issues prior to and at checkout. After launching chat on their site, DSTLD was able to respond immediately to their customers and answer their questions, resulting in a higher conversion rate at checkout.

Post-Purchase Automation: If deliveries are delayed due to a weather event, DSTLD’s goal is to identify customers who may be affected by using Kustomer, and then reach out to those who have been affected with an automated message that allows them to easily pick the next course of action.

Improved Returns Experience: DSTLD has made their returns experience a priority, constantly innovating and scaling up in the offseason to deliver the best possible experience when demand is high. Their new process for exchanges makes completing them even easier, meaning customers receive their item even faster than before.

Optimove picked up where DSTLD left off, sharing how to retain customers and build engagement after a high-demand period. They suggest following 3 key steps to make a difference in your experience to build a bond for life with customers.

1. Detect and Reward Your VIPs: VIP’s (the top 5% of customers) are responsible for 60% of your revenue according to Optimove, so it’s crucial to find them and treat them right. Look at the journey of your current VIPs to identify future candidates, then give them early access and special offers — but don’t take your current VIPs for granted, either.

2. Create a Plan for Post-Holiday Retention: The average transaction amount during the holiday season is 30% higher for repeat customers than new customers, but newly acquired customers during the holiday are 90% less likely to return for repeat business — making it all the more crucial to have a retention plan ready.

3. Strategize for The Long Game: The chances of making another transaction increases as the number of initial transactions increase — that means there’s a real incentive and knock-on effect to converting first-time shoppers. Analyze them, and apply what you’ve learned from your multi-time shoppers to convert more first-timers into repeat customers.

Clearly there’s real value in focusing on a long-term strategy for getting customers to buy from you again and again, beyond simply making more sales. Repeat customers are more loyal and enthusiastic for your brand, and buy far more than the shoppers who just stop in when demand is high. A solid strategy, top-notch experience, and a commitment to finding and encouraging the customers who are most likely to keep coming back is what will make the difference for your business — and knowing everything about your customers makes it that much easier.

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