[source: iab]
Direct to source is a protocol of online etiquette that has spread from the late '90s forums / early '00s blogs to services, news, and products. Links turned out to be much more powerful that we thought. They upturned hierarchies, and transformed entire industries – first slowly, then overnight.
We're a demanding generation. Thanks to the immediacy of technology and the exposure to ever increasing sophisticated marketing, we expect direct-to-brand / person / entity (that is competent, ready, and willing to help) experiences.
Value is about fitness, specificity, ease, speed, and utility. Is the product good enough? Is the ordering simple? Is the service available? Does the relationship deliver?
Emerging business models
Subscriptions have been around a long time. They've become more common with the maturity of digital and social media. With the introduction of artificial intelligence (AI), subscription services will also become more efficient for the buyer and the seller, blurring the line with on-demand services.
Instead of getting a box every month, imagine getting one when you're about to run out – all you need to do is confirm. I'm seeing some examples of this idea, where you can provide input quickly and get immediate results. It's a different conversation with customers, one that extend “value” potentially to life-time.
Another service that crosses boundaries between subscription and on-demand is Rent the Runway. It has two plans, and many have figured out options to make the unlimited more flexible.
We're also starting to see a crossover between subscription services and second-hand products. Tulerie gives you the chance to rent from your friend's closet. The Real Real is leading the market in second-hand products. Thread Up is a second-hand e-commerce company that has been around since 20-09.
Direct-to-consumer eliminates the need to search for items in a big store. Once you know your philosophy on product design and service experience are aligned, you can just order online. Beautycounter, MZ Wallace, Away – I'm sure you have favorite brands and stories in this category.
Lean closets and sharable experiences are adding texture to personal curation, flash selling, and premium partnerships#.
The renting instead of buying mindset spread to products from the world of professional services. It's still early days, and the possibilities are many. Retained relationships and on-demand marketplaces are just the tip of the iceberg.
How to build a 21st century brand
Working with early stage and high growth startups within VC ecosystems has grown my appreciation for taking everything unnecessary out of the equation and focusing on the intersection of brand and customer.
Emerging brands are built with the customer experience at the center. iab found that customer acquisition cost (CAC)-to-lifetime value (LTV) is the new purchase funnel – because it starts with experiences, provides speed, service, and creates data. All pointing to the value of acquiring individual customers, given that mobile commerce is now 40% of all e-commerce.
Storytelling never went out of fashion, and is now more important than ever. Yes, even businesses that sell to other businesses need to appeal to people. Emotional connection opens the door to proof, not the other way around.
What's the mechanism that turns customer acquisition cost into an investment in life-time value? Community.
Glossier says 70% of online sales are through peer referrals. Plus, the company has turned what could have been just a blog into a lifestyle magazine. Away does the same with Here magazine, which is a brilliant take on the brand – away, but here in the moment with stories told through the eyes of locals.
Branding must perform. It's not just a bunch of logos and colors. It's the whole experience through every stack – production, attention, fulfillment, and data. This matters to all direct-to-people companies and the firms that service them.
Direct brands build strong presences through media – social media, mainstream media, and also owned media, often as a rolling combination. If you have the experience and skill-sets, it's valuable to provide strategic services in brand design and communication.
Omnichannel is no longer an afterthought. The blending of digital and in store is also impacting the in store experience. Casper, the mattress company, has “dreamery” stores. Shopify is helping digital retailers open stores.
With software as a service (SaaS) and cloud computing, brands can launch in as little as four months. Successful brands launch and iterate to build out the core product. Who needs a printer when you can have an editor to create your own photo books?
The photo merchandise industry is expected to grow from $10.5 billion in 2014 to more than $17 billion by 2018.
Improve the editor and you make your customer the hero. A focus on improving the experience works also if your customer is a service agent who needs access to information, fast.
Fast delivery is a cost-of-entry. Amazon got everyone focused on 2-day shipping. Finally, delivery is discovery, says iab.
Agility mindset within established companies
Big companies are adapting to this change in mindset and attitude.
Acquisitions, startup incubators and accelerators, digital relationships, in-sourcing competences (e.g., programmatic buying, design), and using internet of things for first party voluntary data are some examples of applications.
The idea is to add value for customers, not just speed up to keep up. A million years ago we were talking about the benefits of building brand newsrooms. Now we're adding shoppable magazines into the mix. Show your work, and showcase it.
Simplification should be a mantra for B2B brands as well. How you simplify your product taxonomy, migrate disparate lines of business or companies into one brand, or make the case for separate brands that serve separate customers makes a big difference in business performance.
It takes strategic insight from the views of employees, partners, customers, and the market and a close collaborations of trust and commitment to create a brand brief that works and evolves with your company.
The direct-to-customer mindset works both ways. As customers, we go direct to brands and companies.
Links have become a legitimate form of currency – belonging to networks and having access to a community help us gain entry to professional relationships. We're going back to the future, beyond online platforms to real life collaborations.