Modern day consumers don’t think of relationships with retail brands as simply transactional — they see brands as an extension of their identity. That’s why building relationships with customers, and treating them as part of the brand, is imperative for business success.
According to a new Kustomer survey, nearly eight in ten Americans say that they wouldn’t shop with a retailer ever again if they encountered bad customer service.
From social media to old fashioned emails, Americans contact retailers 125 times a year – that’s every three days. The survey of 2,000 Americans asked their thoughts and opinions on customer service practices and experiences – and found that Americans aren’t that forgiving when it comes to bad customer service experiences.
In order to remedy their relationship with retailers, 82 percent of respondents are in agreement that retailers should proactively reach out when there is a problem with an order. Those most likely to agree with this sentiment were those aged 55 to 64 and those 65 and older – at a whopping 90 and 94 percent, respectively.
One point of contention between generations, is whether retailers should know their consumers and personalize their interactions with them. Of those age 25 to 34, three-quarters said they expect this personalized communication from retailers, whereas those 65 and older disagreed with this notion at nearly 40 percent.
“It’s clear that the digital age has transformed what the modern day consumer expects from retailers,” says Brad Birnbaum, CEO of Kustomer. “The younger generation not only wants instant resolution to their problems, they also demand personalized interactions and availability across all channels. Retailers must put a customer service strategy in place, and leverage the right tools, to deliver on these expectations.”
This older generation also disagrees with the age-old expression that “the customer is always right” – at 58 percent; but over half of those 65 and older, get very frustrated when they have to repeat information to customer service – that’s 10 percent more likely than those aged 18 to 34.
Sixty-six percent of those aged 25 to 44, however, do agree that “the customer is always right.”
Perhaps speaking to this expression, over half of respondents said they would post an online review after a bad customer service experience, and another four in ten (41 percent) would take to social media to complain.
In order to avoid the hassles of bad customer service experiences, 74 percent said they would spend more money just to get better customer service.
“Customer service can impact business success from end to end,” says Birnbaum. “Delivering a bad experience could not only mean a lost customer, but also a PR nightmare. Conversely, by providing exceptional service, customers are willing to spend more time and money with your brand, building brand loyalty and lifelong customer relationships.”
Read our retail report to access the full survey results, including insights on the importance of real-time support, personalization and omnichannel service.
From transactions to experiences, see how today’s customers are changing customer service
The digital age has forever changed the way companies do business. Direct-to-Consumer brands now make up 40 percent of the manufacturers, cutting out middlemen and offering personalized, nimble services and products to their customers. Amazon has redefined our notions of speed, convenience and selection, and companies like Airbnb, WeWork and Car2Go have revolutionized the economy allowing users to exchange the downsides of ownership for the upsides of sharing.
Meanwhile, companies like Birchbox and StitchFix have built up sizeable customer bases—and built-in loyalty—through subscription box services, and companies from Glossier to Parachute are joining the $50 billion pop-up industry, creating customer experiences that unite brick-and-mortar shopping experiences with the nimbleness of online shopping. The result? A business landscape where convenience, personalized service and customer experience are king.
New Generation, New Customer Expectations
But the digital revolution has affected more than just the way that businesses interact with customers. It has also changed what customers expect from businesses. More than three quarters of Americans now own smartphones and communicate regularly through social media platforms like WhatsApp, Instagram and Facebook. Modern-day consumers live in a world of interconnected platforms, instant communication, and personalized experiences—and they’ve come to expect the same from brands. And, as millennials become key customers and Generation Y gives way to Generation Z, expectations for quick, easy and customer-centric customer service will only grow.
In this new business landscape, businesses cannot rely on old models of customer interaction and support. To survive in the world of Amazon and eBay, where inventory is endless and speed is the rule, they must distinguish themselves by finding proactive and creative ways to build long-term relationships with customers over time. And to do this, they have to find new ways to identify and track the changing needs, experiences and expectations of their customers, providing fully-integrated, personalized, 360-degree support over the customer’s lifetime.
Moving from Transactions to Relationships
To provide this kind of support, companies must stop seeing customer interaction as a transaction and start seeing it as an ongoing conversation. Customers are not reducible to tickets, or to emails in a queue. They are complex human beings with a variety of motivations, and they bring a unique history to every customer service interaction.
Unfortunately, many companies are still relying on the old model of customer service, where they treat each new interaction as a separate event handled by different people across a variety of siloed platforms. In this model, there’s no way to store, share and track the customer’s history and past conversations, so customers are forced to repeat their issue to each new service agent. And this is no way to build a relationship!
Imagine if every time you met a new person, you had to tell them your name and life history all over again. It would be exhausting and insulting—and yet, it’s what companies expect customers to do each time they call with a question or problem. No wonder customers rank having to repeat information as their number one customer service complaint!
Know Your (Whole) Customer
To attract, satisfy and keep new customers, companies need to know who their customers are, where they’ve been and what they need. Understanding the context of a customer’s call—from the number of times they’ve ordered a certain product to the issues and conversations they’ve had with agents in the past—allows companies to deliver a more efficient, more personalized, and more proactive service.
Creating an omnichannel system that collects all of the customer’s history in one place transforms the customer service interaction, allowing agents to quickly identify problems, suggest solutions, and preempt future issues. Seeing that a customer has a long history of buying a certain product, for example, can allow an agent to suggest other products they might enjoy, while knowing what prompts a customer to engage with customer service can help the company direct them toward the best platform for resolving their issues. This approach doesn’t just save time by eliminating the need for unnecessary repetition. It also allows companies to build customer histories that ensure proactive, personalized and conversational service—and long-term customer loyalty.
In the modern business climate, the companies that will succeed are the ones that meet people where they are: anytime, any place, and on any channel. But the most successful companies will go beyond offering efficiency and access to a whole new philosophy of customer engagement, building systems that allow them to understand and serve the whole customer. See how Kustomer is setting the standard for customer service in the digital age in this on demand webinar.
What are the core principles of a modern retail customer experience? Personalization, curation, agility, and community. Direct-to-consumer retail brands use owning the design, marketing, distribution, and support of their products to build deep relationships with consumers. As a result, many DTCs have transformed customer support into personalized experiences that build loyalty and lifetime value.
Luckily, Kustomer works with many of the leading DTC brands. So we’ve pulled together a few of their customer service secrets for you:
Glossier builds products with their community of fans
A lot has been written about the CX revolution led by cult-fave-turned-unicorn beauty brand Glossier. A key part of Glossier’s success has been thanks to community building (the brand was of course born out of a popular blog) and the customer experience team, called their gTeam, has been instrumental in growing and engaging this community.
Glossier’s gTeam plays a foundational role in bringing community feedback into product design. The company is known for transforming customer feedback into hit products (see: Milky Jelly Cleanser). “They help us figure out and predict all of the questions or concerns that our customers might have about the product,” explained Jessica White, the executive director of customer experience, to Glossy.
The gTeam editors also go beyond transactional support (shipping, coupons, etc) to deliver complimentary style recommendations. The editors focus on specific channels, including ones not typically covered by support teams, like FaceTime. In combination with digital tools like the Shade Finder app and content illustrating how products look across a range of skin tones, this approach has helped the beauty brand recreate the experience of shopping in a makeup store.
“Instead of limiting interactions with customer service, which is the norm in the industry, we strive to create conversations with our customers,” continued White to Glossy.
The results of this CX investment for Glossier? Reddit threads literally raving about the brand’s customer service.
ThirdLove invests in a culture of CX and smart data
ThirdLove shook up the women’s undergarment industry with personalized recommendations for every body type, money-back fit guarantees, and diverse product models. Which brings to mind the now-famous Victoria’s Secret founder story of feeling unwelcome in the women’s section of a department store and proves how CX complacency can lead to history repeating itself — disruptors becoming the disrupted.
Customer service is such an important differentiator to ThirdLove that the brand invests in Customer Experience centers designed to be great places for their support teams to work. (Proof? There’s even an office slide.) ThirdLove’s Fit Stylists who work there receive training to make customers comfortable during their journey trying and buying intimate apparel, a personal process that can make or break customer loyalty.
As the company’s co-founder and co-chief executive officer, David Spector, explains to Apparel News, “We want to provide exceptional customer experience to people. The only way to do that is with our own team.” Spector also points out that the U.S.-based Experience Center helps ThirdLove’s Fit Stylists form deeper connections with their American customers than outsourced support would.
Like Glossier, ThirdLove also incorporates customer feedback and data into its buyer journey. More than 13 million women have completed ThirdLove’s online Fit Finder tool, resulting in more than 600 data points the brand uses for product development and delivering recommendations back to customers.
Outdoor Voices invites participation in
With a brand that’s about #DoingThings, Outdoor Voices is another DTC brand thriving because of its (extremely on-Instagram) community. The Outdoor Voices Brand Reps play a key role in letting customers know what the brand stands for, why it’s different, and what each clothing item was created for. According to Muse, Outdoor Voices HQ and Brand Reps have monthly video chats to discuss brand news and initiatives.
To make contacting support simple and on brand, Outdoor Voices has a welcoming page and easy-to-navigate support page. By making its email contact “hello [at] Outdoor Voices,” the “support” vibe is swapped for a friendlier, conversational tone.
Like other leading DTCs, Outdoor Voices leverages customer support as a product and trend feedback engine. The company’s recent job posting for a Customer Experience Manager explicitly lists a requirement to “Operationalize customer data and feedback, both within the team (e.g. measure and improve Associate performance) and the company at large (e.g. make customer trends actionable).” This invites fans into the product development process, with customer support as the entryway.
LOLA designs support workflows for empowered agents
Like ThirdLove, LOLA is disrupting traditional brands in another very personal space for women: feminine care and sexual wellness. The brand’s customer service team must handle deeply personal topics from customers, often over email. To return the trust their customers have in them, LOLA’s team goes above and beyond to make sure their products are rushed to women wherever they need them. From sending tampons to a customer’s hotel via Uber, to overnighting condoms so that they arrive in time for a honeymoon, LOLA works overtime to create a memorable experience.
For a recent product launch, the Lola team took it as an opportunity to both reward loyalty and gather feedback. They sent 100 loyal customers mailers of their new Sex by LOLA products. One customer even emailed to say that she loved the products and, as a single mom, they inspired her to start dating again.
For a brand that empowers and informs women, LOLA’s team needs to be just as empowered and informed by their technology solutions to deliver great service. Context Cards enable the team to take direct actions such as modifying, cancelling, or scheduling a subscription, and checking on shipping status for an order. Clicking on “Modify,” for example, takes them directly to the customer’s subscription, where they can edit the frequency, products, etc. This makes it easier for the team to spot orders that have been placed, but may need modifications. LOLA has a search for customers who have emailed and placed an order in the past day, so that agents can make modifications to the order before it actually ships.
5 ways to deliver CX like DTC leaders
Consider customer service on the front lines of community and relationship building, not simply a necessary business cost.
Operationalize mining customer conversations for product feedback by support to bring product ideas back into the company.
Use technology to compliment the role of support agents, through algorithm-based recommendations, self-service fit finder tools, and seamless exchanges/returns.
Empower your support teams to go beyond transactional support, have social conversations, and reward loyalty.
Build service conversations off a shared history and understanding that customers are people, not support tickets.
These approaches can benefit any brand, regardless of business model, because they’re key to delivering the type of service customers want and expect. Evaluate your own service operation to see how you compare to these DTCs, and then look for scalable opportunities to deliver a more modern experience — it’ll pay off in community, loyalty, and lifetime value.
We had the pleasure of learning from Mike Vroom, UNTUCKit’s Customer Service Director, at the Glossy Forum: the Direct-to-Consumer Era, and wanted to share some of his awesome insights into how he was able to increase efficiency by 25%. We’ve picked a few choice ones below, but make sure to watch the entire video for all of that great CX knowledge.
The Faster You Scale, The More You Need a Plan: When Mike started at UNTUCKit, they only had 4 stores. They’ve since grown to 40, with that total set to reach 50 by the end of the year, and a goal to hit 100 in the next five. However, scaling quickly can lead to the proliferation of multiple, disconnected platforms that agents have to toggle between to do their jobs. Rapid growth can make it hard to take a breath, and even harder to take a uniform, platform approach. It’s best to use a flexible support system that can accommodate the integrations you’re going to need.
Custom Objects Can Keep Customers Engaged: If your service and CX solution can easily display information from other platforms, instead of forcing agents to switch tabs between them, then it’s easier for them to remain in a single view and engage with customers in real time. With the ability to snooze relevant reminders and provide real-time updates, your agents can be more proactive as well.
Omnichannel is Omni-Crucial: As a retailer that’s scaling quickly across both brick-and-mortar and digital, an omnichannel experience is critical for UNTUCKit. Lack of a true omnichannel experience was a pain point in their old platform. Their in-store inventory and experience couldn’t communicate with their ecommerce system. That means customers couldn’t easily see what was available in the nearest retail store, or return online orders there. With Kustomer, they have true visibility into the customer journey across channels, and can finally identify their lifetime value.
Increasing Efficiency Helps You Scale: During UNTUCKit’s rapid growth, they knew they needed a new service platform, but they had to focus on responding to the daily asks that keep customers happy. However, Mike has been able to take a breath and look at the bigger picture since making the switch—and wishes he could have done it sooner. Since switching, they’ve increased efficiency by 25%, and reduced average handle times for calls by 30 seconds. More efficiency means you can focus on long-term strategy and experience design, and not on the day-to-day tasks. That way, you can grow with confidence.
The Direct-to-Consumer (DTC) revolution is shaking the foundation of retail business. As digital advancements make it even easier to cut out middlemen and deliver totally new kinds of experiences, customers have come to demand DTC brands provide them with the same kind of convenient, personalized and memorable experiences they get from traditional stores. Those that can innovate, adapt, and bring a higher caliber of experience and smarter ways to buy using the vast amount of consumer and product data available will be the ones that succeed. Those that don’t will lag, unable to bring a truly modern experience to their customers.
The time has come to reconnect with your customers and focus on a lifetime of experiences, rather than on optimizing a single, specific journey. Here’s how your brand can communicate and sell directly to your audience today:
Curate collections of essential products for customers
Focus on a few good items done right at a fair price point. This approach is key to tapping into modern shopping trends, encouraging brand loyalty and repeat business by making products that become an essential part of customers’ lives. Huge selections and hundreds of locations are no longer likely to breed success.
Pioneer new models like subscription and shared ownership
Harness the power of digital tech to connect everyone and everything, putting surplus or unused goods to use, and creating experiences that effortlessly sync with our everyday lives. As customers, especially millennials, are willing to buy used or share ownership if it means great savings, consider using tech to implement shared ownership models in your brand practices.
Make delivery and returns easier
As more customers buy online, delivery and returns are becoming even more crucial to the customer experience. Focus on fast delivery and low-friction returns to make up for any hesitation customers might have about buying online. All the more so for large, traditionally hard to ship items.
Deliver personalized, 1-1 service
Adjust every aspect of the online shopping experience to meet customers’ needs, using the latest CRM, machine learning, audience segmentation, and personalization technology to create an immersive digital journey.
By integrating orders, shipments, and conversations, with internal and external customer data, Kustomer helps brands get a comprehensive and actionable view of all customers, driving informed service decisions.
It’s not easy being a new brand in an industry with a lot of established players. However, if you can use your incumbent status to take a fresh look at the marketplace, you can end up turning the entire category on its head.
LOLA has done just that. The forward-thinking feminine care brand has overturned the status quo with their totally new approach. By highlighting what actually goes into their products, providing a convenient subscription experience, and openly talking about women’s health issues that were previously taboo, they’ve created the first lifelong brand for a woman’s body.
While they started with tampons, the brand has quickly expanded their range, now offering pads, wipes, condoms, and other reproductive wellness products. Despite their rapid growth, they’ve kept their focus firmly on delivering great, personal experiences to every customer.
On our latest webinar (hosted by Glossy), LOLA’s Senior Manager of Customer Strategy and Operations Caroline Dell spoke with Kustomer’s Senior Manager of Marketing Programs Stacey Dolchin about their strategy and approach to delivering a highly personal DTC experience. For more information on delivering a great DTC experience, check out our whitepaper.
Jordana Kier and Alex Friedman founded LOLA in 2015 with a simple idea—women shouldn’t have to compromise when it comes to their reproductive health. It all started when the two women realized that the tampon brands they had been loyal to for over a decade weren’t don’t disclose what they’re made out of. What was actually in those tampons? This desire for straightforward transparency and frank discussion about a topic that we’ve traditionally shied away from has animated the brand ever since.
This unique perspective, coupled with high-quality products and a smart business model, has helped them shaped the broader conversation around women’s health since launch. By empowering women with information, they’re helping their customers have more control over what they put in their bodies. By focusing on questions asked by real women, they’re dismantling the stigma that surrounds female reproductive wellness by creating a two-way dialogue with an engaged community. Every communication channels is an opportunity for a conversation—-website, social media, email newsletters, and their blog, The Broadcast.
By answering questions that their competitors aren’t with a relatable and no-nonsense brand voice, LOLA has both become a resource for their customers and started a national conversation about reproductive health.
LOLA’s goal is to create relationships that last a lifetime. They receive 1000+ emails per week from customers about personal topics, often asking questions to LOLA’s agents before consulting with a doctor. To return the trust their customers have in them, LOLA’s team goes above and beyond to make sure their products are rushed to women wherever they need them. From sending tampons to a customer’s hotel via Uber, to overnighting condoms so that they arrive in time for a honeymoon, LOLA works overtime to create a memorable experience.
For many younger customers and their parents, their ongoing relationship with the brand starts with LOLA’s First Period Kit. After posting a video where LOLA founders told their first period stories, they were inundated with moms reaching out to ask if they offered products for teen—a great example of their ongoing dialogue with customers driving product development.
For their most recent launch of Sex by LOLA, they sent 100 loyal customers mailers of their new products. It was an easy way to get feedback while rewarding loyalty, and one customer even emailed to say that she loved the products and, as a single mom, they inspired her to start dating again.
A Single View in a Single Platform
All of this wouldn’t be possible without a platform to manage their relationships and provide incredible experiences. Their previous platform wasn’t linked to their back-end system, so they had little context on the customer’s order history or subscription details. The same was true for incoming messages on social. With Kustomer, it’s now easy for their agents to switch between social and support channels, helping their customers on their preferred channel at a moment’s notice.
Context Cards with buttons enable the team to take direct action such as modifying, cancelling, or scheduling a subscription, and checking on shipping status for an order. Clicking on the “Modify” button, for example, takes them directly to the customer’s subscription, where they can edit the frequency, products, etc. This makes it easier for the team to spot orders that have been placed but may need modifications. LOLA has a search for customers who have emailed AND placed an order in the past day, so that agents can make modifications to the order before it actually ships.
Features like Workflows and Bulk Messaging have helped LOLA handle larger issues proactively. When their subscription management page experienced a brief outage, LOLA created a workflow based on keywords that automatically identified and then proactively bulk messaged thousands of impacted customers to notify them of the issue. As a result, LOLA was able to handle over 5x their normal volume at a highly-sensitive time.
Since combining all their order, subscription, and customer data into the Kustomer platform, LOLA’s reply time has decreased by 15%, while their agent efficiency has increased by 15%. Watch the webinar recording.
A Brand for Life
LOLA’s mission is one-of-a-kind, and with Kustomer, they’re able to scale while living up to the values that inspired them in the first place. For a brand that empowers and informs women, LOLA’s team needs to be just as empowered and informed to deliver great service. Building meaningful, ongoing relationships is a major part of what LOLA stands for. With Kustomer, their agents are able to get a holistic view of every subscriber and see their entire history with the brand. With more streamlined support, they can focus on what matters—a groundbreaking, personal experience. Delivering service with a purpose requires a robust and flexible platform, and with Kustomer, LOLA is building relationships that will last a lifetime.
For more information about building a great DTC experience, check out our whitepaper.
The Direct-to-Consumer approach has changed the way we discover, shop and buy. To take stock of this monumental shift, Kustomer hosted some of the most influential and innovative DTC brands to discuss their approach to loyalty, relationship-building, and experience.
A common thread is that this shift in the consumer ecosystem has put a greater emphasis on the relationship brands have with their customers. Every brand, not just DTC companies and startups, have to value customer experience, loyalty, and lifetime value above all in order to reach modern consumers.
1) Personalization with Purpose
Your customers expect more than a one-size-fits-all experience. They’re all different, and they know that their data should be put to use to make their experience better.
If there’s one brand that knows one size doesn’t fit all, it’s custom shirt manufacturer Proper Cloth. “We have smart sizes—we ask the customer ten questions around height, weight, fit, tuck-in preference, and from that we predict what set of custom size dimensions would be most optimal,” said Founder Seph Skerritt. “This was a big data problem, but as we grew we had a rich data set to build a bigger advantage upon. We used that to improve the customer experience and streamline the onboarding experience.”
Jewelry and watch marketplace TrueFacet makes sure that they’re using a granular segmentation process to send the right messages to the right customers, as CEO Tirath Kamdar describes: “Our customer segmentation is behavior-driven—and then we use demographic information on top of that. We’ve created curated programs to help with our customer segmentation. We target each of our consumers in different ways to build loyalty.”
Personalization isn’t limited to product features, it’s also valuable to personalize content, marketing messages, and other touchpoints. As Alison Lichtenstein, Director of Customer Experience Design at Dow Jones summarized: “Personalization is important—knowing the exact content each person is reading, focusing on serving up the next best article, section, newsletter—we want to anticipate what the customer needs and putting that in front of the person, to make sure they continue to be engaged.”
The push to personalize is even built into Dow Jones’ strategy at the highest level. “We’re evangelists of customer service, we’re constantly thinking about how we can resolve customer issues. But we also focus on the agent experience, helping them help the customers. It’s a huge piece in helping us differentiate. We want to be able to help personalize.”
2) Communication is Crucial
New DTC brands are doing more to connect with customers. Digital channels create more opportunities for conversations, as chat and social multiply the amount of places customers can ask questions and engage.
“When things go wrong, you need to be constantly talking to your customer service team to find patterns, identify the issue, and then make the fix.” Said Britta Fleck, President and Managing Director of Glossybox North America, “Constant communication with your customers provides a better end experience.”
For DTC sofa startup Burrow, they’ve also found that more communication is better. “In the past we’ve tried two approaches. The approach of constantly updating the customer and keeping them in the loop was more successful than giving them a code—communicating with your customers is very important.” Says Co-Founder Kabeer Chopra.
To keep the conversations going, loyalty programs are a natural fit. They ensure that customers stay engaged and reward them for their enthusiasm. Glossybox is pursuing this strategy in earnest, “We’re doing a lot around loyalty, we like to reward our customers. We’re looking into pausing subscriptions over vacations etc, but we don’t want to make it difficult for users to unsubscribe. Either.” More communication can lead to a better experience, but that experience still has to take precedence. “We can only personalize our offering to a certain extent, but what really increases lifetime value for us is listening. And it’s easier sometimes than answering.”
3) Brands, Not Channels
While communicating over every channel that your customers use is important, this communication has to be held together by a strong strategy for the brand. As Mike Vroom, Customer Service Manager at UNTUCKit put it: “Customers interact with brands, not channels.”
Glossier has a similar view, as their Director of CX Erin Miller described, treating every interaction with customers as it’s own channel—they’re not thinking about where they’re interacting with you, but about how they’re going to solve their issue or get the information they want.
This also means that your brand has to communicate with customers in a way that feels warm, natural, and human. Mark Chou, VP of Growth Marketing and E-Commerce at Away, is changing up the way his brand communicates by switching from a reactive to a proactive service model. “When you make mistakes, you don’t hide them from your friends. The same should true for your customers. You can turn a screw-up to a shining moment for your team—being proactive as a customer service team can turn a mistake into a moment for your company that you are proud of.
4) Create Connections with Culture
Above all else, your customer experience should strive to create stronger connections. Interacting with customers one-on-one is highly personal, and doing so in a genuine, meaningful way can have a lasting impact. To do this more effectively, you need to know what your company stands. Daryl Unger, VP of Customer Experience at meal delivery brand Plated, has a strong perspective on the importance of building relationships for his brand. “Food is extremely personal, we aren’t in the business of fixing issues and solving problems, we are in the business of building strong emotional relationships with our customers.” Building relationships based on emotion has some key benefits as a strategy as well. “We remember emotions much longer than transactions. We spend a lot of time studying customer behavior and patterns, which helps us learn when we should proactively reach out—which is very important in a subscription ecommerce business.”
Similarly, Rent the Runway has built their company culture into their customer experience, which helps them build strong relationships with millennial shoppers. “Culture is in the fabric of our brand,” said Tyler Nicoll, Product Manager at RTR, “We have to be woman-first, and we’re changing the landscape by doing something that’s not common in tech companies.” RTR has a full female finance team as well, and are an inclusive company that invests heavily in sustainability initiatives. “Millennials choose brands based on social consciousness,” concluded Nicoll, which is why creating a strong brand built on solid principles makes it easier to form relationships with them. To make it easier for their agents to connect with renters, Rent the Runway’s Integration with Kustomer allows them to automate certain workflows that used to be manual, so they can spend more time working with customers and less time inputting data.
BarkShop and BarkBox understand dogs and dog owners. By getting a rich picture of their customers and their pets by using data analysis—and by using their insight as pet owners themselves—they’re able to deliver exactly what their customers need. “We’re understanding what the needs of our customers are, and figuring out what they need to meet them.” Said Melissa Seligmann, BarkShop’s General Manager.
As the conversations at our event have shown, the Direct-to-Consumer revolution is shaking the foundation of how we do business. As digital advancements make it even easier to cut out middlemen and deliver totally new kinds of experiences, customers will come to demand the same kind of convenient experiences they get from DTC brands from traditional ones. Those that can innovate, adapt, and bring a higher caliber of experience and smarter ways to buy will be the ones that succeed.
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.
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.
Kustomer’s Future of Retail event brought together business leaders from leading modern B2C and direct-to-consumer (DTC) brands, featuring a majority of female founders and executives across the agenda. Together, they discussed the trends that are shaping the retail and DTC landscape today, and what it takes to compete and thrive in this world.
We covered a range of topics, from understanding the customer to creating a consistent experience in-store and online and growing a business. However, four main threads emerged from all the conversations at the event:
1) Experience is the differentiator for modern brands
Now every retail brand, digital-first or established legacy, is in competition with Amazon. It’s unlikely that most will be able to compete on choice, ease of use, or connectivity of their product ecosystem. The only sure way to win is on experience—curation, community, and content is where you’ll be able to stand out.
A simple, clear business model means you can set yourself apart with your experience and service. Lola does more than deliver all-natural feminine hygiene products, their intuitive subscription service and direct-to-consumer prices, plus their commitment to a personal and engaging experience, makes them much more appealing than mass-market brands.
Fast delivery and a good website is not enough, instead customers crave a community and a genuine experience. Women’s workwear brand Argent even calls their pop-up stores “Community Centers”, where they host events themselves and from members of the community—with the end-goal of adding value to customers’ lives. You can learn more about using pop-ups as part of your retail strategy in our report here: Digital First, Store Next.
Similarly, cycling brand Rapha received a shout out for their innovative Club Houses. Instead of traditional brick-and-mortar retail, they’re a hub for Rapha customers, where they host events, local artists, athletes, and speakers, plus organize daily rides.
As Aniza Lall, Chief Merchandising Officer at Bluefly, summarized: “Commerce, content, and community: the brands that can monetize those channels are going to succeed.”
2) You need an omnichannel approach to connect every touchpoint
From first touch and acquisition to the post-purchase experience, you need to be able to trace a solid line following your customer along each.
More brands are getting their start on Instagram like AYR, or as a source of content like Glossier, and scaling from their with a handful of products. It’s crucial to be able to capture all the information about those early fans that you can, because they will form the core of your audience and define your brand experience.
Eleanor Turner, Co-Founder and Chief Creative Officer of Argent, described the importance of connecting these dots: “Experience is such a buzzword today, but it’s really all about creating an experience that’s unique to your brand, personal, and streamlined end-to-end.”
3) Subscription is the future of customer loyalty
New, digital-first brands are shifting their business model to become part of life and rhythm of the customer. For these businesses, profit comes from retention and lifetime value, and you need to know whether or not customers are happy based on their actions, not their words. Doing so can drastically raise their lifetime value.
Men’s subscription box Sprezzabox uses a loyalty program to reward customers based on how long they’ve been a subscriber, giving them access to higher-quality items and delighting them with special offers.
Feminine hygiene brand Lola partners with other brands like Cuyana, Warby Parker, Equinox, and Harry’s to extend their value proposition and reach new audiences.
Material World has shifted their focus from being a marketplace for secondhand luxury items, to building an ongoing relationship by having customers exchange their old clothing and other items for a new pre-owned set each month. As Rie Yano, the company’s Co-Founder and CEO described, “People used to use the brands they shop for as their identity, but now identity is about how you spend your money, not what you spend it on.”
Brands like Rent the Runway and Material World provide more value for customers with a service that replaces ownership with an ongoing relationship with a brand.
4) Stay laser-focused on what your customers love.
Even as you grow, you need to keep the core facets of your brand and experience that your customers love at the forefront.
Women’s clothing brand AYR launched on Instagram and social 3 months before their product lineup fully launched, just to communicate with their customer and get feedback. It’s remained a huge driver for their business: “Our biggest win has been having a direct line to the customer. We launched our t-shirts, plus-size jeans, and eco-friendly products based solely on customer feedback.” Co-Founder Max Bonbrest also gave a big shout out to Glossier for the same reason, “Having an engaged community before you start selling a product is a huge benefit. The best example of this is Glossier, obviously.”
Similarly, Lola’s brand is built on what real women have to say about feminine hygiene. After having a number of conversations while coming up with Lola’s brand direction, founder Alex Friedman had an epiphany: “I realized that there are all these moments where stigma leads to a lack of discussion. I see our job as contributing to the conversation in those areas and extending the brand in those directions.”
Whether your brand is just getting started or has established itself over decades, the discussions at Future of Retail reiterated that success in the modern retail landscape is grounded firmly in gaining better customer understanding, and delivering a powerful, connected experience.
Thanks to everyone who helped make this event possible, we’ll have even more awesome events and informative conversations like this one coming soon!