Amazon poses a major threat to these brands
Direct-to-consumer (DTC) brands must overcome a familiar foe to thrive with consumers.
According to the 2020 DTC Hype Report from digital commerce platform Scalefast and research firm YouGov, 43% of respondents would choose Amazon over a DTC because of the cheaper and/or free shipping options that are available. Another 36% would choose Amazon because the shipping is faster, while one-third (33%) would choose to shop on Amazon because of Amazon Prime perks like shipping options, auto-fulfillment, and coupons.
In addition, 30% of respondents would choose Amazon over a DTC because it’s easier to make a purchase, and 28% would select Amazon because it’s easier to make a return.
When asked to compare DTC brands to traditional retailers, roughly one in five (19%) respondents familiar with DTCs believe that they are more likely to be ahead-of or on-trend, and one in seven (14%) believe that DTC companies are more technologically forward.
Furthermore, almost 15% of respondents familiar with DTC brands believe that they have a better user experience (12.56%) and higher quality products (13.2%) than traditional retailers. However, almost one in six (15.49%) still believe that it’s riskier to buy from a DTC brand than a traditional retailer.
In good news for DTCs, the survey indicates opportunities to attract customers with merchandising, branding, and customer experience:
• 38% of respondents familiar with a DTC brand would be more likely to purchase from a DTC if the product was made in the U.S.
• 30% of these respondents would be more likely to purchase from a DTC if the product was sustainably made.
• Almost two in 10 (18.24%) of these respondents would be more likely to purchase from a DTC if the company had a cause-oriented mission.
• 26% say that stronger payment security and efforts would improve the DTC shopping experience.
• Over two in 10 (21.86%) say that they would like to see same-day delivery options incorporated into the DTC companies they choose to use.
• 16% want DTC companies to adopt a seamless experience across devices to improve experience.
“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,” said Olivier Schott, founder of Scalefast. “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.”
Scalefast commissioned YouGov Plc to conduct an online poll of a representative sample of 1,352 U.S. adults.