These Are the Top 5 Takeaways from Our Direct-to-Consumer Summit

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.

For more insights on the DTC approach, download our whitepaper: 4 Secrets to the DTC Experience Every Brand Can Master.

We Just Raised $26M. Here’s Why That’s Great News for Your Customers

Kustomer has raised a $26M Series B round led by Redpoint Ventures and has added Cisco Investments as a new strategic investor to continue to disrupt the customer experience industry.

Brad Birnbaum, Co-Founder and CEO, Kustomer

At Kustomer, we’ve set out to make customer experiences better. We know what it’s like to call customer service, wait on hold, read off our order number, explain the issue, and wait some more—only to be told we should have been speaking with someone else the entire time. It’s bad for customers, and bad for business.

That is why we’re working tirelessly to revolutionize customer experience.

We built Kustomer to be the modern CRM platform for customer support and experience. It’s always been an alternative to outdated and disconnected ticketing systems. Our clients have access to a full timeline of every customer, giving every agent and customer-facing rep the ability to pull in all the relevant data from their customers and across the business to serve them with speed and efficiency. As companies and brands become more customer-centric, we believe all of them will need to transform their businesses into a modern service and support engine to meet rising expectations.

We have made great progress since launching, welcoming clients and fellow industry disruptors such as Ring, Glossier, and Rent the Runway. With this latest round of funding, we’re excited to invest even more in making customer experiences better for our clients, and the world at large.

Making our platform work smarter and harder:

We love our platform, and so do our customers. Now, we want them to love it even more. That’s why we’re investing in improving and expanding our integrations, as well as making our platform even more intelligent and intuitive.

By broadening the depth and breadth of our integrations, we will enable every company to provide a full view of every customer, whether they’re small or large, B2B or B2C, and anywhere in between. By integrating with more e-commerce platforms, data sources, workforce management solutions, third-party voice providers, and industry-specific solutions, we will continue to enable customer-centric companies to have every last piece of customer data in their Kustomer timeline. We know that the ways customers reach your business are always evolving, which is why we’ll continue to add new channels to our platform so they’ll always be engaged.

Our workflows are incredibly powerful, and many of our clients are already using them to do some amazing things. That’s why we’re going to make them simpler and easier to use—so that everyone has the power to deliver incredible automated experiences, no complex technical knowledge required.

We will also continue to make our platform even more intelligent. By continuing our investment in Machine Learning, Sentiment Analysis, Natural Language Processing, and other new advancements, we will continue to ensure that our clients can understand their customers even better so that they can deliver experiences that are truly cutting-edge.

Equipping enterprises for incredible experiences:

Large contact centers shouldn’t deliver experiences that feel like they’re from huge, disconnected enterprises—they should be as personal and meaningful as the most hands-on boutique. That’s why we’re going to offer Enterprise-level routing and queuing, ensuring that clients of all sizes can deliver experiences that feel immediate and valuable.

Keeping customer information safe is crucial—which is why internal security is our top concern and a core part of our ethos from when we were founded. We’re building out advanced new security features throughout our platform accordingly. We’ll never take a chance with your customer’s safety, and will keep working to find new ways to make them safer.

The best part? All of these advancements will give our clients of all sizes access to Enterprise-level functionality. No matter how many customers you have, we’re going to make sure you’re giving them an unparalleled experience.

Realizing our vision for the Kustomer platform:

Not to brag, but we know the customer service and experience space inside and out. Jeremy and I have over 20 years of experience in the industry, and we always planned to create an amazing platform for service and support. However, our ambitions don’t stop there. We built the Kustomer platform to be versatile, and already our customers have been using it for more than just service—they’ve been using it for engagement, marketing, and more. Now we’re going to be investing heavily in this functionality. We always knew our platform could do so much more for you and your customers, which is why we’re making it more powerful than ever. We recognize the power behind the rich customer datasets that are stored within Kustomer. Rest assured, we intend to help you leverage them to the fullest so that more teams within your organization can deliver experiences that will wow your customers.

Growing to serve you better:

In order to maintain the incredibly high level of customer focus we demand from ourselves, we will be tripling our Customer Experience team in the next 6 months to make sure we are always there for you; whatever you need. Also, to continue working towards our vision of the richest customer-centric platform available we will be more than doubling our engineering and product teams in the next 12 months to continue to be the most innovative product in the market. We will also continue to expand beyond our New York City headquarters by placing customer-centric roles across the US and eventually Europe.

And finally, thanks:

Kustomer customers, we see you, and we want to thank you for all of your support up to now. It’s been an incredible journey, not without a few bumps, and we have so much further to go. So thanks—we’ve got a lot to show you, and we hope you’re as excited for what’s to come as we are.

Learn more in our Press Release.

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.

Deliver effortless, personalized customer service.

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