Study reveals that one in five consumers familiar with DTCs believe they are more customer-centric than traditional retailers
LOS ANGELES – February 28, 2020 – Scalefast, a Los Angeles based digital commerce solution that is changing the way modern brands do direct-to-consumer (DTC) eCommerce, released its “2020 DTC Hype Report,” revealing that while roughly one in five (19%) consumers familiar with DTCs believe that those brands are more likely to be ahead-of or on-trend, and one in seven (14%) believe that DTC companies are more technologically forward, almost one in six (15.49%) still believe that it’s riskier to buy from a DTC brand than a traditional retailer.
The study, conducted online with the third-party research firm YouGov, uncovered not only consumer sentiment when it comes to DTC brands, but also what these brands can do to successfully grow, scale and remain competitive in the space.
“The retail landscape is rebuilding after a tumultuous decade of declining sales and store closures. As a result, DTC companies have emerged as a new category of eCommerce that’s changing the way brands and consumers interact,” says Olivier Schott, founder and CMO of Scalefast. “However, our research showed that while some consumers know of and buy from DTCs, this new retail category is a blurred line in the minds of most consumers. If DTC brands want to become the new normal in retail, they need to learn from traditional retail mistakes, decide if Amazon is worth the risk and adapt to a changing customer that is more sensitive to concerns like their payment security to where a product is made than ever before.”
DTC vs. Traditional Retail vs. Amazon
Despite the hype surrounding DTCs from an industry perspective – and the fact that almost 15 percent of consumers familiar with at least one DTC brand believe that they have a better user experience (12.56%) and higher quality products (13.2%) than traditional retailers – the consumer still wants what they have always wanted – time and convenience while making a purchase. DTC companies at their core must be able to deliver on those needs despite any other gimmicks or missions driving the brand. That is where Amazon, in particular, is outshining everyone.
- 43 percent of consumers would choose Amazon over a DTC simply because of the cheaper and/or free shipping options that are available
- 36 percent of consumers would choose Amazon because the shipping is faster
- One third of consumers (33%) would choose to shop on Amazon because of Amazon Prime perks like shipping options, auto-fulfillment and coupons
- 30 percent of consumers would choose Amazon over a DTC because it’s easier to make a purchase
- 28 percent would choose Amazon because it’s easier to make a return
How to Win Over the Consumer
That being said, once time and convenience factors have been addressed, DTCs have significant opportunity to attract customers by appealing to their human side. These consumers are coming to DTC brands not just for product, but for purpose. For example,
- 38 percent of consumers familiar with a DTC brand would be more likely to purchase from a DTC if the product was made in the USA
- 30 percent of these consumers would be more likely to purchase from a DTC if the product was sustainably made
- Almost two in 10 (18.24%) of these consumers would be more likely to purchase from a DTC if the company had a cause-oriented mission
Customers are also sensitive to the overall purchase experience and DTCs brands must be managing and fine-tuning key parts of the process at all times, which is difficult as they look to scale and evolve. Specifically, a DTC brand must find a way to assure the consumer that security, delivery and mobile experience are top notch.
- Security: 26 percent of consumers say that stronger payment security and efforts would improve the DTC shopping experience
- Delivery: Over two in 10 (21.86%) consumers say that they would like to see same-day delivery options incorporated into the DTC companies they choose to use
- Mobile Experience: 16 percent of consumers want DTC companies to adopt a seamless experience across devices to improve experience
Scalefast commissioned YouGov Plc to poll the views of a representative sample of 1,352 US adults. Fieldwork was undertaken between January 24-27, 2020. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+).
Scalefast has vast global eCommerce knowledge and its enterprise platform is equipped with all the elements needed for leading brands looking to expand and scale their direct-to-consumer sales channel. Recently, Scalefast was recognized in the Inc. 5000 list as one of the fastest growing companies and won Red Herring’s 2019 Top 100 North America award.
Scalefast is the modern way for brands to sell online, empowering them to regain the control and simplicity they need to create an exceptional shopping experience directly from their own digital storefront. Its full-stack enterprise solution brings together a cloud-based eCommerce platform and global business services in an ecosystem where brands can join forces to leverage volume and data.
As a partner to L’Oréal, Sega and FLIR, among others, Scalefast is the fastest-growing eCommerce platform in the U.S. and holds multiple awards for client success and results. Brands benefit from its modern approach to direct-to-consumer eCommerce combining an enterprise eCommerce cloud with a global footprint of logistics, payment and business partners, which allows them to rapidly deliver localized and personalized shopping experiences. For more information, visit www.scalefast.com.
Diffusion PR for Scalefast