With many retailers having concerns about selling on marketplaces – ranging from having to share a cut of revenues to potential customer relationship issues – some are choosing to cut out the middle-man and sell to customers directly. Clearly, this makes customer acquisition a critical area for D2C brands, and more than half (54%) of those surveyed for a report by Yotpo identify new customers as one of their top marketing KPIs.
Perhaps in an effort to stave off competition from D2C disruptors – or as a relatively seamless way to make entry into the D2C market – some large CPG companies that represent some of the top e-commerce CPG categories have recently made highly-publicized and high-dollar acquisitions, such as Unilever’s acquisition of Dollar Shave Club for $1 billion and Edgewell Personal Care Company purchase of Harry’s for $1.4 billion.
So how are brands going direct? First and foremost by using social media, according to the survey results. Three in 5 survey respondents (61%) consider social media to be one of their top 3 acquisition channels (from a list of 11).
Social media as a customer acquisition channel makes sense for brands that may not have the same exposure as other B2C brands selling on marketplaces like Amazon. Findings from a report by Criteo show that Facebook beats out websites and email among channels where customers discover new brands.
Beyond brand awareness, Facebook IQ reports that consumers have positive perceptions of brands they see on Instagram and are likely to take actions beyond discovery, such as searching for more information or visiting the brand’s website.
D2C Brands Increasing Investment In Digital Channels
While respondents listed social media, in a broad sense, as one of their top customer acquisition channels, far fewer (16%) listed paid ads (excluding paid search) as a top channel. However, D2C brands are increasing their investment in social advertising.
More than half (52%) of respondents say they are increasing their investment in Facebook Ads compared to last year, while 49% say they are increasing their spend on Instagram Ads. This corresponds with other findings that show that many businesses, in general, plan on using Facebook Ads and Instagram Ads more in 2019.
D2Cs are also increasing their spend on Google Ads (47%) and Google Shopping Ads (32%), likely due to search engine marketing being among the higher tier of customer acquisition channels (though not on the same level as social media).
More than one-third (36%) say they will increase their investment in influencers. While influencers do have some pull with younger shoppers and tend to go hand-in-hand with social media, marketers are still challenged as to how to demonstrate ROI from these activities.
UGC Employed By Majority of D2C Brands
Research has shown that customer reviews are considered important by both consumers and retailers. Recognizing the importance of this form of user-generated content (UGC), almost three-quarters (73%) of D2C brands have implemented customer reviews on their e-commerce websites, with another one-fifth (20%) planning to implement them in the future. To a lesser extent, respondents also have implemented customer photos (36%) and customer videos (15%).
As social media is the D2C customer acquisition channel of choice, it is not too surprising that two-thirds (66%) of respondents leverage UGC in social media. Another 41% use UGC in email.
For more details on D2C marketing, download the report here.
About the Data: 512 e-commerce and marketing decision makers were surveyed for the report. Respondents were from North America, EMEA and APAC and represented various vertical markets.