Direct-to-Consumer Brands Are Winning at Personalized Messaging. Here’s Why.

Published on October 26, 2019

Direct-to-consumer brands are having a moment. Brands like Warby Parker, Glossier, Casper, and Dollar Shave Club are raising hundreds of millions of dollars, and they’re using that funding to compete head-to-head with more traditional brick-and-mortar retailers.

One of the ways that direct-to-consumer brands have been successful in their marketing is by developing highly targeted consumer messaging strategies. That style of brand communication has had a profound impact on the success of companies like Glossier, Harry’s, and Bonobos, to name just a few, as they utilize a combination of chatbots, social media, and email marketing to deepen their relationships with potential customers in coveted demographics.

Open rates are up

According to new research conducted by Braze, a company that specializes in growth marketing automation, direct-to-consumer brands beat non-direct-to-consumer brands with 58.6% higher messaging open rates across channels.

One reason for the higher open rates is because direct-to-consumer brands show greater willingness to use automation and iteration to personalize messages and speak to customers at a point in the journey when it makes sense for them.

Getting personalized

“DTC [direct to consumer] brands are well-positioned to offer more personal experiences to their customers. They are more willing to use technology to personalize messages with careful consideration to their customer’s consumption patterns—data—and as a result, their messaging makes sense and drives higher results,” says Will Crocker, senior director, customer and partner marketing at Braze.

The differences in how direct-to-consumer brands connect with customers go beyond automation. In analyzing more than 29 billion messages sent by 44 digital (direct-to-consumer) and physical-first (non-direct-to-consumer) customers, Braze found that digital-first and subscription-based companies greatly outperformed their competitors in open rates and drove higher engagement with contextualized, action-based messages.

Direct-to-consumer brands have more complete control over their entire data ecosystem than traditional retailers, which allows them to more easily leverage data to generate personal experiences, explains Crocker.

It’s a numbers game

Volume is also at play. Direct-to-consumer brands sent more messages than non-direct-to-consumer brands in Braze’s analysis. They were also more likely to experiment with message timing — overriding messaging frequency settings more often than physical-first companies.

Braze found that direct-to-consumer companies were more likely to send action-based emails, which were 59% more likely to be opened than time-based emails. Action-based push notifications were 480% more likely to be opened than time-based emails. Braze found that in-app messaging was the most effective messaging channel. The interaction rates of email, push, and in-app messaging clocked in at 13%, 4%, and 39%, respectively.

Knowing that direct-to-consumer brands were more likely to send action-based messages, and that action-based messages are more likely to be opened than time-based messages, the successes make more sense. Braze’s research shows that direct-to-consumer brands experiment more with message timing than traditional retailers, overriding messaging frequency settings more often than non-direct-to-consumer brands.

“I hope non-DTC brands recognize the importance that leveraging real-time data and insights about their customers’ behavior can have in building strong, meaningful relationships with customers,” says Crocker.

Traditional retail is paying attention

Crocker sees the retail industry continuing to be competitive for brands when it comes to cutting through the noise and garnering customers’ attention and building strong loyalty. But he’s hopeful that traditional retail brands will start being more proactive in how they use technology to aid in understanding, tracking, and responding to customers in contextual and meaningful ways.

“Looking forward, I hope more brands recognize that these marketing tactics are not just unique to DTC brands and that they are easily replicable,” he says. “In order for retail brands to stay resilient in an increasingly competitive market, it’s critical that brands adopt technologies that allow for more personalized customer engagement in any part of the customer’s journey.”

The article Direct-to-Consumer Brands Are Winning at Personalized Messaging. Here’s Why by Stephanie Miles first appeared on Street Fight.

Street Fight is a media, events, and research company focused on the business of hyperlocal content, commerce and technology. At Grit Daily, Street Fight covers the business of hyperlocal marketing, commerce and technology.

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