2024 DTC Ecommerce Trends: What Brands Are Adopting

Retail shopping experience needs to be tailored to what makes it comfortable and easy for the buyer, instead of focusing on just the retailer. DTC, or Direct-To-Consumer movement began with easy-to-ship products, usually fashion, cosmetics, skincare, etc. However, today more sophisticated items like smart home equipment are also being processed using DTC.  

D2C e-commerce sales strategy enables manufacturers and brands to sell products directly to consumers rather than involve middlemen. This is useful for businesses to gain valuable customer feedback, understand their requirements, and personalize the products according to the changing needs. 

A D2C consumer model can seem different based on the customers, brand, and the market they wish to work with. Some include marketplaces like eBay and Amazon in their channel mix, while some incorporate brick-and-mortar stores. Some depend on brand partnerships to attract mutual audiences with like-minded retailers. 

Ecommerce retail sales are expected to reach 9.4 trillion U.S. dollars by 2026 on a global scale. Many physical retailers like BestBuy and Target have adopted measures for a major shift towards DTC models. 

As shoppers become more concerned and expectations grow, brands should find ways to meet the demands, offer value, and build exceptional customer experiences. This blog discusses the significant direct-to-consumer trends that shape the e-commerce sector and gives insights into how retailers should adopt these trends.

COVID-19 ignited the fire of e-commerce sales, and by October 2020, it reached 14.7% of total retail sales. Raising steadily, it is expected to reach 20.6% by 2027. 

More and more businesses are moving online, and it became a clear necessity after the outbreak of the COVID-19 pandemic. As the usual ‘go-to’ retailers weren’t what the customers wanted then due to the disruptions in the supply chain and the pandemic’s challenges, they turned creative with online direct selling models. Isn’t it exciting that even the idea of what one should purchase online is changing? You even buy indoor plants and motor vehicle parts online, part of a great transition.  

According to the June 2023 Global Consumer Insights Pulse Survey, about 63% of shoppers have purchased products from a brand’s website directly. In the highly competitive market, consumers wish for faster delivery of products, active customer support, personalized products, and a reliable source of information – this is where DTC e-commerce trends prove amazing.

Almost half of the respondents cite factors like greater choice of products, competitive pricing, and best stock availability as the core purchase drivers, persuading them to get drawn to D2C websites, states the survey.

Customer engagement is the key for any brand that helps them keep welcoming new trends and innovations they bring to retain attention. Adidas DTC QR codes make an excellent example to quote in this context. In partnership with Spotify, the brand has put a QR code on their Pulsebeat HD shoes that directly links to a custom playlist based on the customer’s location, ensuring every runner is set to move. Scanning the QR code lets the customers launch Spotify and enjoy the exclusive playlists. Let’s see more brand examples that use the direct-to-consumer approach in their business. 

LOLA:
LOLA, a feminine hygiene brand, wanted to improve choice and transparency in the feminine care segment. Driven by a strong desire for accessibility, they made the DTC model a core part of their business strategy. However, to expand its reach through partnerships, they have signed with retailers like Walmart to offer a strong foundation for brand authenticity, customer engagement, and innovation.  

Tesla: 
Tesla, the electric automaker has made a smaller hit than the other auto manufacturers during the COVID-19 pandemic due to their DTC model adoption. Tesla demonstrates that DTC can work well for the automobile industry. 

1. Personalization & Customer Experience:

Brands that provide customer-centric yet personalized experiences are more likely to develop long-lasting relationships, drive repeat businesses, and ensure customer loyalty, which sets them apart from the competition.

Here are some ways to take this to the next level:

• Using AI and machine learning tools ensures the delivery of personalized product recommendations that consider customer requirements.
• DTC businesses can go for personalized subscription services in which the models analyze customer preferences, previous purchases, and social media activity to choose items that suit individual needs.
• Personalized campaigns and website customization based on the customers’ interaction history.
• AI-driven analytics that map and identify various buyer journey paths, which can be optimized to improve conversion rates.
• Design loyalty programs using personalized rewards and experiences based on customer preferences.
• Predictive reordering, where you use purchasing patterns to predict when customers might need replenishment and persuade them to timely product reordering.
• As per the customers’ geographic data, product suggestions, and location-specific content are added.
• Dynamic pricing strategies provide special deals based on the purchasing history and customer loyalty.
• Showcase and recommend products according to the user-generated content such as photos and customer reviews of users with similar profiles.
• Customize the user experience in mobile applications based on user preferences and behavioral patterns.

2. Mobile Commerce & Social Selling

The widespread adoption of mobile phones and smart devices has given birth to m-commerce or mobile commerce. This transition has urged brands to sharpen their mobile strategies, ensuring they capture and engage consumers effectively.

Here are some trends to incorporate m-commerce and social selling in your business:

• Mobile-first buying experience through crafting streamlined navigation, real-time inventory and delivery information, localized shopping options, and personalized interfaces.
• Collaborating with social media influencers can amplify the brand’s presence and reliability on mobile platforms. Influencers can develop relatable content that resonates with their followers, driving more engagement and traffic to mobile shopping platforms.
• Multiple brands develop exclusive features and offers for mobile users to improve engagement. This could be app-only discounts, promotions, early access to sales, new products, special content, etc.
• Voice commerce is another breakthrough in which voice-assisted devices such as Alexa, Siri, and Google Assistant have become common in homes too. From an e-commerce perspective, consumers use these devices to enquire about the products, make price comparisons, and buy directly through voice commands.
• Voice-activated shopping, where voice recognition technology can be used to let consumers search for products, add to a cart, and purchase hands-free, offers an innovative and comfortable shopping experience.
• Voice search optimization is where the brands can optimize mobile platforms to implement voice search and leverage NLP (Natural Language Processing) and context-specific search queries to align with the unique requirements of voice-activated shopping.

3. Flexible & User-friendly Payment Options

Adopting Buy Now Pay Later (BNPL) and digital wallets shift toward secure, flexible, and user-friendly payment options. DTC brands should ensure that the technology infrastructure supports different payment options and enables easy modification or addition of payment strategies as market demands vary.

Buy Now, Pay Later: BNPL has transformed the online shopping experience with the flexible model, enabling consumers to buy products immediately and pay them interest-free, over time.

Consumer Appeal: BNPL options help you have a manageable method to spread the purchase costs. This improves the cart size and results in high conversions for DTC brands.

Store & OMS (Order Management System) Integration: For DTC retailers, integrating BNPL to checkout is direct, with multiple payment providers that offer easy-to-deploy solutions to improve customer experience.

Influence on Purchasing Decisions: BNPL influences the buyer’s purchasing decisions, encouraging shoppers to buy expensive items or add more products to their cart, knowing they can avoid financial strain by paying in installments.

Digital Wallets: With advanced encryption measures, digital wallets like Google Wallet and Apple Pay help consumers store payment details and quickly complete transactions. Consumers also appreciate the convenience of multiple payment options – for example, applying for gift cards and covering the pending balance with a different pay type.

4. Food & Beverage DTC Taking Dominance

The global food and beverage market for e-commerce is expected to hit $903465.5 million by 2026. Due to many new players evolving in the space, the DTC segment is also growing. For instance, Magic Spoon is a breakfast cereal on low carb, and ideal for a keto diet.

Choosing to implement the DTC model or not, depends heavily on the target audience, product, current sales, and marketing ecosystem. For instance, consider a brand’s target demographics that focus on buying online frequently. Here, the brand is only concerned about bottom-line results, not logistical complications, and doesn't also rely on retail partnerships.

Food and beverage brands that leverage DTC trends can gain the following benefits:

• Customize and brand the buying experience. 
• Maintain customer relationship, and ownership and allow access to crucial first-party data to fuel future growth. 
• Build, manage, and grow individual DTC sales channels. 
• Great control over fees, pricing, and profit margins with DTC.

5. Product Diversification

Product diversification is the most common method in which DTC brands achieve a high success rate after launch. Diversification eliminates the risk in a downturn and paves the way for an additional barrier against competition.

Let’s learn the two diversification techniques DTC brands use:

• The brand expands color, personalization, and sizing options for the existing products; 
• The brand expands to entirely different and complementary products.

Burrow is an example of product diversification. They began with modular couches but now sell additional home items such as rugs, shelving, coffee tables, throw pillows, etc.

6. Subscription Models & Loyalty Programs

DTC brands combine loyalty programs and subscription models to build excellent customer value propositions. This will eventually lead to higher customer lifetime value, improved brand loyalty, and a competitive position in the marketplace.

Here’s how these programs evolve:

• Subscription models deliver curated experiences that resonate best with the customer's values and lifestyle.  
• With subscriptions, brands can let customers pause, skip, or customize the intervals and contents, enabling them to exercise high control over expenditure. 
• Loyalty programs like tiered reward systems, personalized rewards, and community and brand advocacy help to improve engagement, and deepen the emotional connection with the brand.

7. Omnichannel & Flexible Fulfillment

Omnichannel retailing and the growing demand for flexible fulfillment features craft how DTC brands align with customers’ requirements flexibly and conveniently. An Order Management System (OMS) is essential to enabling fulfillment models, which support the effortless integration of sales and distribution channels.

• BOPIS: A consumer-preferred technique that blends online shopping convenience with prompt in-store pickup. OMS syncs online orders with the inventory and ensures the products are ready for quick customer pickup.
• Ship from Store: Brick-and-mortar stores ship orders directly to consumers, offering flexible fulfillment. An Order Management System (OMS) manages this by determining which stores can efficiently fulfill orders, transforming assets into e-commerce resources.
• Curbside Pickup: Curbside pickup helps customers collect purchases without entering the store. OMS manages the order preparation and customer notifications to ensure a swift pickup process.
• Same Day & Next Day Delivery: Speed is crucial in driving customer satisfaction. OMS offers real-time inventory visibility, logistics coordination, and quick order processing to meet customer expectations for faster service.
• Buy Online Return In-Store (BORIS): BORIS lets customers who made online purchases return the items in-store. It improves customer convenience, offering a direct return process and prompt resolution.

8. Composable Commerce-Driven Tech Stacks  

Composable commerce involves building a scalable and flexible tech stack that enables brands to choose and integrate the best-suited technologies for their specific requirements.

Emphasizing customization and scalability lets brands custom-tailor the tech stack to align with the business model and ensure technology follows great pace with the business. With the right tech stack, brands can adapt to the changing trends and adopt new technologies.

Role of OMS in Composable Commerce

• An Order Management System offers the required infrastructure to make flawless operations and improve customer experiences. 
• OMS is a cornerstone of commerce architecture, inventory management, and order fulfillment across multiple touchpoints and channels, maintaining high efficiency. 
• The capability to integrate seamlessly into other systems marks the key strength of OMS. This interoperability helps build a unified tech stack that drives operational excellence. 
• A composable commerce approach enables DTC brands to quickly integrate new functionalities and move ahead of the buyers’ trends.

9. Chatbots for Improved Customer Experience

Chatbots have been increasingly used by e-commerce platforms these days. Chatbots will be the primary customer support channel for almost a quarter of all businesses by 2027, predicts Gartner.  

As AI technology takes new phases in the DTC space, customers have become highly comfortable with chatbots, and more automated tools are used to answer product queries, order concerns, manage product returns, and provide general information.

Casper, an online sleep products retailer, launched AI-driven chatbots to improve customer service experience. This has let the brand provide 24*7 support, promptly and address customers’ queries and issues.

10. Wholesale Expansion

Being a good D2C strategy for brands to reach a larger audience, enhance revenue, and improve visibility, the wholesale expansion also contributes to a highly predictable income source compared to the unpredictable DTC sales.    
Many DTC brand examples have expanded to wholesale and also have their retail business operations. One such example is Warby Parker, which has store locations across the United States of America. Casper, again is another example, where customers can purchase mattresses from stores like Target, Rooms To Go, etc.  

Customer relationships are significant regardless of what method you adopt to sell the products. Considering the DTC sales, you should be aware of the latest trends. A brand should always be careful of the increased competition, advertising expenses, and Customer Acquisition Costs (CAC), and be ready to capitalize on the opportunities revolving around data management, customer experience, and wholesale. As the conventional retail business has been eventually taken over by D2C e-commerce, we can expect more customer-focused initiatives that can take e-commerce business to newer heights. 

As the e-commerce trends have been taking new shapes, and witnessing fast-paced growth, it is important to stay aligned with the current competitive market. With the support of the best e-commerce website development company, you can stay ahead and adopt the latest DTC e-commerce trends to your business. 

WAC has a knack for knowing your business, analyzing the DTC e-commerce possibilities, and proposing the right route to take your business along. With the right team to support you, WAC takes your e-commerce business along the right path with e-commerce development services including the best e-commerce app development, e-commerce website development service, and custom e-commerce development. Let’s get started!