Direct-to-consumer (DTC) brands are no longer the new kids on the block. In recent years, they have taken the commerce market by storm; 97% of the UK online population now recognise the biggest names, and almost four-in-ten shop with them. Barclays estimates that, within the next five years, the DTC market in the UK is set to be worth £13 billion.
As these former disruptors mature, however, they are beginning to encounter challenges to sustainable growth. Along with increased consumer interest, the rapid explosion of DTC has fuelled stiff competition; attracting more new players keen to take advantage of the low overheads and increased agility that come with operating exclusively online.
This means there is a need for brands to find fresh ways to outpace rivals and scale their business; and some of the best opportunities lie with adopting new advertising techniques.
Deploying cost-effective solutions powered by artificial intelligence (AI) will not only help ease their growing pains, but also innovate the digital experience; using immersive ads to capture customer attention, boost retention, and power continued success.
Increase sales with interactivity
The online media landscape is saturated with video, but innovative content is the hallmark of DTC advertising strategies. From how-to YouTube channels to influencer partnerships on social media, DTCs are specialists in generating highly relevant and valuable content for their audience; see Glossier’s vast portfolio of collaborative #GetReadyWithMe videos.
Now, brand marketers need to up their game by embedding interactivity into video content.
For instance, inserting ‘shoppable’ hotspots that appear as overlays on top of certain video elements can enhance the consumer experience even further. As well as enabling viewers to discover more about preferred products, introducing click-to-shop features will allow them to immediately make purchases without leaving the video through direct-in-cart integration.
For marketers, this approach brings the dual advantage of creating and seizing their own moments of interest. By using digital video to spark buying intent and providing a fast route path to purchase, they can significantly increase the likelihood and volume of sales.
Use automation to maximise budgets
As marketing teams face greater pressure to deliver returns, increasing the effectiveness of their biggest spending areas is increasingly vital, especially with digital advertising. According to Gartner, chief marketing officers (CMOs) across the globe will allocate 22% of their budgets to online ads this year — meaning it’s more essential than ever to streamline ad
Harnessing advanced, AI-assisted tools will give marketers the ability to bolster content production efficiency: reducing costly and labour-intensive tasks such as manual product tagging and expanding scale. Take, for example, computer vision. As a sub-set of AI that can instantly assess visual media in detail — including images, colours, and patterns within videos — it’s a perfect fit for automated product recognition. Marketers can upload their complete catalogue and use computer vision to identify and auto-tag merchandise in existing video ads, instantly creating interactive hotspots.
Moreover, it also has scope to considerably speed up personalisation. By inputting insights about past consumer browsing habits and purchases, marketers can tap computer vision to automatically pinpoint relevant items in product catalogues and serve bespoke suggestions via video hotspots. The final result is a mutual win: consumers receive useful recommendations while marketers maximise their resources and content impact on business outcomes.
Boost consumer loyalty and retention
Customer acquisition is notoriously expensive, typically requiring five times more investment than retention, but most businesses only focus 18% of their efforts on the latter. To avoid putting already tight budgets under extra strain, DTC marketers need to ensure their objectives align with both supporting growth and retaining the favour of existing customers.
This is another area where tailored, interactive, and machine-assisted video can be hugely beneficial. Consumers return to brands that know them, value them, and make them an integral part of the brand story. By leveraging interactive tools to put them in charge of their digital experience, marketers build closer relationships that inspire brand loyalty and sustain their customer base.
For example, techniques such as video branching allow viewers to select video components specific to their tastes, such as the music playing in an ad or the journey its content takes. Adding these individual aspects to the consumer experience helps marketers increase their performance and efficacy on multiple levels.
Videos are equally appealing for potential and current customers, making a positive impression on those who haven’t purchased from them before and reinforcing bonds with previous buyers. Additionally, the ability to place all ad variations in one video is also a bonus for production; eradicating the need to create a myriad of ads, each with a different targeting strategy.