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There's a Simple Reason DTC Brands are Missing the Mark

Maxwell Folley

A seismic shift from brands selling through various channels to going direct-to-consumer is in full effect, and it’s radically reshaping the retail landscape. However, the DTC revolution isn’t fully delivering on customer expectations, which is a big problem for those counting on its’ success.

Every year businesses lose $75 Billion in revenue from customers who switch to another brand due to inadequate customer assistance. Last year alone, 67% of customers turned away from brands because they didn’t get the service they required.

So, even as the internet and eCommerce sweep away the constraints of geographic access to consumers, direct-to-consumer brands are failing to hit escape velocity. The promise of a direct and personal connection with a specific group of consumers is undermined by the fact that consumers simply aren’t feeling a benefit from interacting directly with these brands. Indeed only 9% of Americans claim they’ve received superior assistance from a DTC brand.

Without delivering in this respect, it’s hard to believe DTC brands will be successful. Power has shifted to the consumer, and being customer-centric is therefore critical to satisfying them.

So what must they do to succeed?

The KPIs and how DTC stacks up

There are four attributes of a brand that customers value more than anything else in their experience. Any brand must address these to create positive, emotional experiences that earn customer loyalty. A successful solution must be:

  1. Instantly gratifying
  2. Convenient
  3. Helpful and kind
  4. Knowledgable and competent at answering any customer questions, quickly

Customers value these four things more than any loyalty program, easy payment process, personalized experience, and even human interaction. Additionally, when the quality of these attributes is high, customers are more willing to overlook other high-value areas, like product quality, and price.

So how does DTC measure up to these KPIs in the eye of the consumer? Well, in short, these are also the main reasons 67% of consumers cease to do business with DTC brands regularly.

For DTC brands, addressing this is an issue of scale. Their size limits their relationship-building capabilities. Empowering their support teams with Artificial Intelligence will help DTC achieve excellent assistance at scale. It will free teams from manual tasks, unlocking an ability to develop a strong customer strategy. So finally, DTC brands can compete with the earth’s most customer-centric company instead of giving in.

Now let’s take a look at the specific problem areas where AI can give DTC the most significant boost.

Solving the 9–5 👔

A vast majority of brand owners are currently striking out with most of their potential customers.

A surprisingly large number of people shop online in the evening. Primetime is 8–9 pm. The problem is that when customers are in the buying mood, and the brand is not there to lend a hand, they’ll decide to shop somewhere else.

Rather than being met with a helpful associate, customers commonly face away messages, contact forms, and queues. It’s as if brands are asking the customer to bend around their schedule or take a ticket and wait in line.

Today’s digitally native consumers have become more impatient than ever. So forcing them to wait has become akin to showing them the door.

Any routine established for solving customer problems should be made available to every customer, no matter the time of day or day of the week.

Additionally, customers are less willing than ever to stand for inefficiencies addressing their needs because of hickups on the brand side due to inadequate training, a bad hire, or sloppy processes. Expectations are such that customers demand the peace of mind that they will be taken care of, immediately.

AI-enabled brands can be confident that when resolving a problem for one customer, it will be solved for the rest and made available 24/7. DTC brands must turn their focus away from repeating processes to creating automated ones. In this way, process automation can set a high bar for DTC brands where away messages, forms, and queues become a thing of the past.

Bringing back conversation magic ✨

Texting and chatting are personal, two-way conversations. There are set expectations from customers because of how we use these channels for back and forth communication in our daily lives. If a business is making use of text or chat to communicate with customers, a response should not go unanswered.

Urgent to interrupt but not to help 🙉

While text and chat are performant channels for driving new revenue, running marketing campaigns on them increases the risk of labeling a brand as spam because of their highly-personal nature.

When a business is reaching out to a customer on these channels, it’s incredibly important that they’re ready to interact. Moreover, add value to the conversation that is comparable to what customers expect from back-and-forth interactions with an in-store associate.

Brands should not only use these channels wisely but be ready to guide the customer through the interaction when they do. Sending the customer a back to school promotional message only gets the tap. The magic happens when the brand is at the ready to guide the customer into finding their pair of shoes, matches them to the perfect fit, and answers any questions they have.

Evolving from just support to full-coverage assistance 🚀

Customers who chat before making a purchase convert three times more often. Current chat solutions have failed to give brands the tools to enable this type of sales assistance at scale.

Sales assistance has a glaring absence in the DTC shopping journey as eCommerce now suffers from double and sometimes 3x and 4x the return rates of brick&mortar. The reason for these high rates: customers are more unsure than ever of which item will be right for them. So much so that they often buy multiple variations of the same product with the intention to return.

In brick&mortar, you can touch and feel, and try on. However, with 87% of customers starting their journey online, and 83% remaining on a single channel throughout, the best answer is not the physical store.

Moreover, while purely algorithm-driven recommendations may show short-term gains, they’re too impersonal. They’ll fail to build a meaningful brand to customer relationship and lead to diminishing long-term returns.

The critical blend involves data science applied to product and customer data paired with conversational AI to scale guided selling. Armed with these tools, a brand can boost their eCommerce performance by assisting customers through big friction points in the shopping journey. They’ll position customers to purchase confidently and frequently while buying additional products, generating hefty long-term gains that are closer to 5x.

The BOTtom line 🤖

Brands should lean on their team’s superpowers to delight customers, build relationships, and create processes. Also, lean on data and algorithms for process automation, instant answers, organized knowledge, and consistent performance.

This combination creates the best dynamic for DTC brands to become customer-centric. Customers get their needs met no matter the time of day, and brands free their team to focus on the higher value duties.

We’d all rather interact with a human than a bot, or would we? What if that bot was fast and knowledgable and that human was rude and couldn’t answer your question, or wasn’t even there?

At the end of the day, what the customer cares the most about is the speed, usefulness, and quality of the assistance they receive.

Bot or human, nothing beats stellar customer assistance.

With a thoughtful approach and the right combo of data, algorithms, and people backing brands, DTC can achieve assistance that amazes customers and scales quickly.

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