How to Create a Direct to Consumer Strategy and Surpass Your Sales Goals

While at Texworld USA and Apparelsourcing last month, I interviewed Syama Meagher, the founder and CEO of Scaling Retail about How to Create a Direct to Consumer Strategy and Surpass Your Sales Goals.

Syama shared some awesome info and – if you weren’t able to attend the show this season – here are some of the highlights that I think you’ll find incredibly helpful:

Opening Thoughts on D2C

• We tend to think of D2C as a linear thing. But many of the most successful D2C brands are taking a multi-channel approach. They launch a D2C brand and then strategically decide on a few wholesale partners. 
• The stronger your business and brand are, the easier it will be for you to create wholesale partnerships. 
• Start with a small, local clientele. Diversify your online assortment, to make sure that you grow in tandem alongside your wholesale partnerships.
• Make sure that your margins are set for wholesale expansion.
• Some brands are scared of diluting brand vision by heading into wholesale, but consider switching that on its head. What are your criteria for a wholesale partner? Stop being at the mercy of the stores, and realize that if you have a solid business, you can be choosy. What are the brand values you want your partners to possess?

Benefits of D2C 

• D2C tends to have higher margins.
• You’re essentially building a media company, and therefore have you have control of content, vision, timelines/frequency of product and content, special events, etc.
• Your audience loves you because you know them. You own their data and can use to it give them exactly what they want.
• You can pivot faster and have a more flexible business plan.
• You can choose to make investments in your business that directly benefit your customer.

Misconceptions About D2C

• It ain’t cheap. You need way more than a website to make this work.
• Content production is expensive.
• Product development (if you’re dropping new styles regularly) takes planning and foresight
• You still need money (just like if you are starting a wholesale company)- the allocation of funds is just different.

Budgeting

• Marketing becomes a bigger player in the budget than if you’re focused solely on wholesale.
• Remember, you’re a media company. You need to produce photo shoots regularly. These don’t need to be big, expensive undertakings all the time, but you do need consistently updated photos of product to keep things fresh. Editor’s Note: this could simply mean spending money learning how to create wonderful photos on your phones via lighting and editing techniques. The main point is that visual content is really important and it needs to look good.
• Outbound marketing costs can be high.

Inventory

• Perceived value is important. So if everything has the “sold out’ or “sale” button, it looks like you’re going out of business. On the other hand, if everything is on a “wait list” it looks like you never launched.
• So, with this in mind, if you are an item -driven brand (with one or two signature styles) and your marketing campaigns are all around those one or two products, this is fine and you limit your inventory by just having one or two styles. There won’t be an expectation to see anything more. However, if you’re a collection-driven brand, you need more product available, even if it’s just a few pieces of each style.
• This means you need to take an honest look at your budget to determine if you can afford to launch a collection. If money is tight, it could make more sense to start as an item-driven brand and then expand.

Marketing Strategies

• Content creation is necessary for digital marketing.
• What are the different touchpoints that your customer is experiencing during their day-to-day life? It should be your goal to have a presence there, i.e. subways.
• Participate in markets and other offline events.
• Though variable based on the brand, 30% of your budget going to marketing is a fair assessment.

Advertising Strategies

• Catalogs are still an important way to reach some customers: Away, Cuyana, Warby Parker, and Lunya all have catalog mailers.
• FB and Instagram advertising are musts. Digital marketing is not enough- you have to have paid ads too. And you need to have a budget for this.
• You have to be willing and able to test, experiment, and adjust your ads.
• Copy, images, CTA, audience segments, etc. . . there is a lot of collateral needed to create a diverse campaign with a handful of ads. This is not a “one ad” and fingers crossed situation.
• You need to be split testing many different ads.
• When you’re ready to do digital advertising, start by reviewing your website and whether or not it will convert. The average conversion on websites is 1.84%.
• A custom website is not necessary for conversion. But customization is. Meaning, Shopify and Squarespace are good options, but you can’t stick with the cookie cutter templates. Customize them and hire an expert if this is not something you know how to do well.
• Photography is incredibly important. Invest.

Do not put an amplification of your brand into the world if you do not have a website that will convert into sales. – Syama Meagher, Scaling Retail

Offline Marketing

• You need to get out from behind the computer.
• With a D2C brand, you need to do things like markets, or a partnership with a retailer for a trunk show or pop-up.
• You need to talk to people to understand what they like and don’t like about your product and brand and be willing to adjust accordingly.
• Imagine this: you do a trunk show or a pop-up in a city and it goes well. Now you can get back online and target people in that city with your content. Maybe you think about getting a wholesale partner in that city. Layer your efforts!
• There are tons of great opportunities to get more newsletter subscribers and Instagram followers that you can then create relationships with and eventually sell to.
• Do a digital advertising campaign prior to the offline event.
• Do a recap blog post and email. Snap photos on Instagram of yourself with your customers. Make the most of every offline marketing effort.

For everything that you do, think of 6 different touch points. How can you rework it, re-market it and get in front of as many people as possible.- Syama Meagher, Scaling Retail

Mistakes to Avoid

• Not using a budget.
• Launch advertising or marketing without proper planning. Example: you do a giveaway and then don’t re-target the people who enrolled.
• Off-brand partnerships of any kind.
• Not having systems in place.  Ask yourself, “What are the tools and the systems that I need to use to make the D2C work?” For example, tools for planning and managing social media.
• Not looking at and using your Google Analytics and tracking.