What you can do to build a direct-to-consumer brand

Expert Advice

As more brands move towards the direct-to-consumer business model it can be difficult in the beginning to find your customers and there are added challenges of taking on the responsibility of marketing, selling and logistics. The bonus is the higher margin as well as increased control over your brand and storytelling.

Here are a few tips to help you develop a direct -to-consumer business model:

Create your brand story

You have to develop a reason for a customer to enter your store whether online or in person. Selling direct -to-consumer for start-up brands often involves trunk shows, parties and joint pop-up shops and you have to create an impact in order to drive the customer to look at your product. Your story will involve the experience you offer the customer, so develop your brand environment including displays, marketing and visual merchandising to create impact.

Grow strategically

If you are starting off on a direct-to-consumer model then you need to have enough stock to start making sales, but you don’t want to be sitting on high stock levels that wrap up all your cashflow. For many start-up brands they focus on a few key products and make small production orders of 5-10 pieces and use these to make initial contact with customers, gain their feedback and ensure they are making sales before they make more products. It is better to sell out than have to try and sell off under-performing products at a discount to try and release money.

Test the market

Before committing to a long-term property lease it is better to test the market with pop-up shops and short-term leases, to ensure that you that there will be an appropriate footfall of your type of customer. Or you could look for a short sub-let and partner with another retailer who has a similar customer target. You will need to consider the costs of setting up a shop with all the fixtures and fittings as well as the stock levels you will need over the length of the lease.

A pop-up or short lease will help you gather data and understanding of your customer and see if it matches your target.

Future wholesale strategy

A successful brand will usually try every sales channel to ensure they capture their market share, so many brands start-off direct-to-consumer initially and then when they can prove they have a customer base they stand a better chance of getting a good deal with wholesale accounts and department stores. Therefore, if you want to wholesale your brand in the future ensure your direct-to-consumer pricing strategy doesn’t limit your wholesale options in the future.