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.

The Future of Retail: Four Essential Takeaways for B2C and DTC Brands

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!

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