Just shy of 70% of UK consumers say that they would happily move to a subscription based model for day-to-day high street purchases including cosmetics, cleaning products and health supplements.
New research by Rakuten Marketing into ‘direct to consumer’ (DTC) brands reveals that price (71%) and product quality (50%) continue to play by far the most important role in driving a purchase. However, a brand being ethical (17%) and sustainable (16%) also now rank among the top demands among consumers looking to buy from one of these younger, aspiring brands.
Already, DTC businesses such as SimplyCook, Birchbox and Dollar Shave Club, which established a new subscription-based model around men’s shaving products, enjoy a conversion rate of over one in every five customers in the UK who have heard of the brand.
Anthony Capano, Managing Director EMEA at Rakuten Marketing, explains: “Now these DTC brands have become successful international businesses, they will encounter rising pressure to act as ‘good global citizens’. Legacy brands like Waitrose have very effectively leveraged consumer interest in sustainability across the media with attempts to minimise packaging. This is certainly an area that could put DTC brands – many of whom rely on packaging and transporting each product individually – on the back foot.”
Across Europe, consumers express significantly greater interest in brand values including sustainability and the eco-friendliness of products. In France, over a quarter (26%) of consumers express they would be motivated to buy from a DTC brand because of its focus on sustainable working practices. This rises to 34% in Germany.
One example is mymuesli – the German online start up that prides itself on organic, ethically sourced produce. mymuesli is among the most well-known DTC brands in the market (67%) with as many as 49% of consumers who have heard of the brand going on to make a purchase.
Similarly, in France, Le Slip has enjoyed a meteoric success and is now known to almost three quarters of consumers in France (74%). The brand prides itself on having ‘a positive impact, both socially and environmentally’ by sourcing all materials and centring all production in France rather than overseas.
Only 47% of consumers in the UK currently feel the advertising from DTC brands they see online and across social media closely follows their interests. As sustainability becomes an increasingly important consumer demand globally, identifying audiences by values will play a more vital role in their success.
Anthony Capano adds: “One of the key ways brands will distinguish themselves amongst eco-friendly consumers, will be partnering with the right publishers in order to target the most relevant and engaged audiences. Working with the right eco-affiliates will ensure they hit the right tone with their eco-messaging and avoid any sustainability or ethics-based faux pas, especially when marketing to regions further afield.”
Fortunately, roughly a third of consumers state social media campaigns (34%) and affiliate sites such as voucher and coupon websites (30%) are among the most effective in raising their interest in DTC brands. Importantly, performance marketing should not be seen through the linear lens of social and discount sites. MoneySavingExpert is a great example of a consumer advice publisher where as many as one in ten consumers are most likely to click and buy from a DTC brand. This opens up the potential for DTC brand marketers to launch highly targeted campaigns to promote the environmental work they are doing.
Exploring how technology is making it possible to identify such campaign opportunities, Capano adds, “Advancements in AI and machine learning are catalysing affiliate marketing’s ability to achieve scale, and to improve personalisation and contextualisation. Armed with a new automated toolset, inspired by the success programmatic has enjoyed in the display arena, we now have the power to transform affiliate marketing and supercharge the growth these industry leaders are currently enjoying.”