LONDON, United Kingdom — Going into 2020, direct-to-consumer upstarts needed to play by a new kind of rulebook. Gone are the days of aggressive customer acquisition, returns on paid marketing investment and single hero products as surefire ways to capture the imagination of the coveted Millennial and Gen-Z consumer.
Now, the spread of Covid-19 has upended the DTC sector even further. While established brands with retail locations and impressive top-line figures are taking a hit, companies that were set to debut during a time of lockdowns, social distancing and shuttered warehouses face a painful dilemma and in some cases, pressure to meet growth projections off the back of recent funding.
Dianna Cohen, founder and chief executive of haircare brand Crown Affair, is one entrepreneur who has had to navigate the unprecedented fallout of the coronavirus, just under two months into her newly launched business. Speaking in conversation with BoF Tech Correspondent Chavie Lieber and Executive Editor Lauren Sherman in a digital live event exclusive to BoF Professional members, she shared her insight on how to steer a business through this black swan event, as well as thoughts on wider shifts in the DTC market.
Topics covered in the webinar included retail and marketing strategies, what investors are looking for coming out of this crisis and the problems of relying on a hero product, an old favourite of DTC models which Lieber said was “a good way to build business and brand recognition, but there are dangers,” such as key silhouettes falling out of favour with customers and being prone to rip-offs.
For fledgling and established brands alike, one of the biggest immediate challenges is how to position themselves and communicate with customers in the midst of a global pandemic.
As Cohen pointed out, “The only really powerful thing [about direct to consumer today] is the ‘direct’ part.” In light of dampened consumer sentiment, content that is more human, less edited and not centred around pushing product is one of the best ways to build and maintain ties with the people you are reaching.
"Doing what’s authentic to you as a brand is going to be what resonates the most with your audience, whether they’re customers or not," she added.
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