Over the past two years, we’ve seen an unprecedented acceleration of online commerce. The region’s online retail sector alone is forecasted to reach $2.8 trillion by 2025. From research to purchase, digital interactions have become an indispensable part of people’s shopping journeys and their digital usage continues to deepen, with no fewer than 90% of consumers in APAC expecting retailers to sell their products online.1
Brands are exploring diverse omnichannel ecosystems in response. Legacy brand Nike targets to achieve 40% owned digital business by 2025, and traditional offline retailer Coles is making innovative strides online. Digital-first beauty brand Nykaa is opening up physical stores, and small- and medium-sized businesses are reaching global consumers at scale through partners like Shopify.
Such savvy brands, with an eye on sustainable bottom lines, share an important thing in common: they recognize that a direct-to-consumer (DTC) strategy helps to future-proof their business in an increasingly competitive e-commerce landscape.
Here’s how a DTC strategy can help your brand supercharge sustainable business growth by building brand trust and love, unlocking first-party data and marketing automation, and delivering unique customer experiences.
DTC helps earn brand trust and paves the way for brand love
While brand love has long been a goal of marketers, brand trust has increasingly become a must-have too; highly trusted brands are seven times more likely to be purchased. Crucially, one without the other doesn’t cut it anymore. Four in 10 consumers say they have given up brands they love because they do not trust the company, according to Edelman’s Trust Barometer Special Report in 2021.
“Trust is now your brand’s most important asset.”
In times of uncertainty, people crave authenticity and transparency. Today’s consumers are worried about being misled, with search interest in “legit” rising 140% across APAC.2 However, shoppers are happy to reward brands that have earned their trust and will readily advocate for brands they love. Here, brand websites have an important role to assume as a trustworthy source.
Brand-owned channels provide a unique opportunity to show what your business authentically stands for, and to nurture customer affinity and engagement.
Research across Southeast Asia shows that the key reasons people buy directly online from brands are product authenticity and a secured website.3 They rate these as their top considerations when making purchase decisions across retail channels.
Additionally, people are looking for brands whose values align with their own and have a greater purpose; 63% of consumers across APAC demand that brands stand up for a cause. As people reexamine the brands they support, we’re seeing up to 75% of consumers buying from newly discovered brands rather than familiar ones.4 In this instance, owned engagement channels provide brands with a unique opportunity to connect with shoppers over shared beliefs.
For example, India’s leading food delivery and restaurant discovery service, Zomato, champions sustainability and makes it an integral part of its marketing and business strategies. One way it does this, and connects with people who believe in conscious consumption, is to make “no cutlery required” the default option for all orders on its app to reduce plastic waste.
DTC enables resilient business growth in a privacy-centric world through first-party data and marketing automation
DTC channels also make it possible for brands to gather meaningful first-party data in real time, and to have a data-driven, value-centric e-commerce strategy, powered by marketing automation. This enables brands to not only connect with high value customers at scale but to also supercharge business growth and profitability. And as privacy concerns deepen, it’s critical that brands gather data responsibly and transparently to support user and regulatory demands regarding online privacy, and to protect brand trust.
“The future of measurement is combining consented first-party data with insights from new, privacy-safe technology.”
Consumer electronics brand OnePlus established a new DTC business via its own
e-commerce store to directly manage customer data and user experience end-to-end. This enabled it to reduce dependency on marketplaces and boost sales. It further partnered with Google to scale the DTC business to maximize profitability. The result was a 130% increase in revenue with 3X return on ad spend.
Indeed, marketing has always been about showing up at the right time, with the right message, and in the right place, but doing so at scale while protecting bottom lines is challenging. Brands, however, are tapping into the power of marketing automation to grow their e-commerce business. And as they shift from volume- to value-centric measurement and bidding strategies, their advertising spends are no longer a marketing cost but rather a business growth contributor.
Traveloka Indonesia, for example, combined its first-party data with automated,
value-based bidding solutions to optimize its Search Ads campaign performance and drive higher booking values. This strategic approach resulted in an 11% increase in return on ad spend by automatically identifying every growth opportunity — ensuring that none is missed — and providing the right bid each time without any overspend.
DTC is not just a channel but a critical strategy to build experiences that differentiate your brand
Marketers who regard DTC as just another sales channel underestimate its power as a vital strategy to meet consumer needs. After all, digital convenience is not only about making products and services easily available when consumers want them; it’s also about providing relevant and meaningful shopping experiences, which can help your brand stand out.
For instance, when online shoppers express frustrations about long delivery times and shipping fees, a DTC strategy enables brands to be agile and make adjustments accordingly to meet people’s needs. In China, Sephora launched a one-hour delivery service through its online retail platform to mirror the instant fulfillment shoppers would get from an in-store shopping experience.
Owned e-commerce channels enable your brand to be agile and stand out with meaningful shopping experiences, informed by first-party data insights.
Brands can also use owned platforms to implement new technologies and innovate the way people shop in the mid- to long-term. One such opportunity is in virtual shopping experiences. Search interest in “virtual try on” has grown by 520% year over year across APAC, with the majority of related breakout queries being branded searches such as “virtual try on [XYZ].”5 This suggests that people are seeking out immersive online experiences from brands they are familiar with, and brands that deliver on this consumer need with memorable and helpful virtual shopper experiences can win over customers.
Japanese beauty giant Shiseido, for example, launched an AI-powered makeup advisor on its website to provide personalized recommendations based on analysis of users’ selfies and their beauty goals. The makeup advisor then offers a comprehensive list of recommended products from the brand’s full makeup range and lets online shoppers virtually try on the products before purchase.
In an increasingly competitive e-commerce landscape, it’s critical that brands approach their DTC strategy as an opportunity to build trust and establish a relevant, reliable customer engagement and sales channel. By doing so with consented first-party data, brands can learn of consumer needs in real time and adopt value-centric measurements to drive sustained business growth.
