The winning DTC playbook with the entrepreneur Julian Fuchs
from Adam | February 7, 2021
Top 3 Tips For Succeeding In The Crowded Ecommerce Direct To Consumer Market
Direct-To-Consumer (DTC or D2C) has always been the dream for online retailers. What’s not to like? You cut out the middle man, retain complete control of your brand and communicate directly with your customers. The rise of DTC giants like Dollar Shave Club and Casper Mattresses proved the model’s potential. Of course, this also led to a rush of new market participants. In the United States, for example, DTC sales nearly tripled from $ 6.85 billion in 2017 to $ 17.75 billion in 2020 as more companies embraced the model, according to eMarketer.
“There are great opportunities in the DTC sector, especially since the attitude towards online purchases has inevitably changed due to the pandemic,” says Berlin-born entrepreneur and venture investor Julian Fuchs. “But to be successful in the increasingly competitive DTC landscape, you need to differentiate yourself.”
For newcomers, sourcing a quality manufacturer and sorting out appropriate shipping times – once the main hurdles – are just the beginning of the DTC journey.
Julian, who has successfully invested in and built up a number of DTC brands like Everjump, Klaeny and Maniko, gave PUBLICATION NAME his top three tips for winning the DTC game.
“Of course, for a newcomer to DTC, you have to find a successful niche and start small. What is important, however, is that you have a vision and a roadmap with which you can turn to a broader topic, ”Fuchs quotes the example of the Dollar Shave Club. What began as a razor gradually evolved into a full line of men’s products, from deodorants to hand creams. One of Fuch’s most recent projects, Everfit, targets the high-end skipping rope niche, but has – as the brand name suggests – the vision of expanding into fitness products more generally.
With the unprecedented choices now available to online consumers, discerning shoppers are increasingly making purchasing decisions that largely depend on their values. That’s why it’s important for your brand to give people something they can identify with and leave behind. Here, Fuchs names sustainability as a profitable approach.
“Whether it’s fair trade, human rights or protecting the environment; When your brand stands for something important, you are taking a huge step towards loyalty and buy-in. But you have to be serious. People can see through half-hearted attempts at sustainability, and that will backfire. “
This leads us to Fuchs’ next tip:
As competition in the e-commerce space has intensified, the cost per click has increased dramatically for traditional advertising platforms such as paid search and social networks. And as consumers become inundated with advertising, paid influencers also become less effective.
“I’ve seen a number of DTC startups waste valuable runways on campaigns that never pay off. That is why it is so important to have customers who believe in your vision. ”
Fuchs speaks of User Generated Content (UGC), in which the buyers themselves advertise the brand. According to a study by TurnTo Networks, UGC has proven to be the most effective organic marketing strategy in recent years. 90% of consumers say they now have more control over their purchasing decisions than paid ads, promotional emails, and even search engine results.
“There are a number of strategies to get users to generate content that promotes your brand,” says Fuchs. “And the best strategies are almost entirely organic. GoPro is the best example here: Thousands of users upload their videos to Youtube. Most of the time, however, you need to provide some motivation. For example, offer a prize for the best UGC. “
Are you looking for tips on how to finance risk? Julian Fuchs venture company DigitalRain has a great educational blog.