GfK US Study Reveals Direct-To-Consumer Brands Are Big Winners From Past 6 Months, Challenging Traditional Models
62% of consumers have tried DTC brands since March; 40% expect to buy more DTC as lockdowns end
In the last six months, even as lockdowns and restrictions eased, US consumers continued to flock to direct-to-consumer (DTC) brands putting added pressure on traditional brands to innovate and build stronger consumer bonds.
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GfK is What’s Next 4 Consumers study reveals that the DTC model – which bypasses traditional online and in-person retail outlets –went mainstream in the last six months. Initially, most DTC brands engage a younger demographic; but over the last six months, more and more older consumers have tried DTC as online shopping grew in popularity.
The new GfK study found that
• in the last six months, six in ten (62%) US consumers tried a DTC brand
• roughly 9 in 10 (88%) DTC “try-ers” said they were satisfied with their purchases, while just 10% were dissatisfied
• 70% of consumers switched from traditional brands to DTC offerings in at least one category
GfK’s research also shows that DTC brands will likely accelerate in the coming year, with 40% of US consumers stating that they will buy more DTC products and services after lockdowns and restrictions have passed – while just 13% said they will buy less.
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GfK found that DTC and traditional brands now compete on a level playing field, with 70% of consumers stating they “like them both equally.” And 65% of consumers who have noticed traditional brands selling direct to consumer said they purchased those brands via social media or a website.
When asked what attracts them to DTC brands, consumers most often cite
• convenience (48%)
• better value (37%)
• higher quality (36%), and
• ‘tailored to me’ – customization (31%)
According to GfK’s study, the most popular D2C categories tried in the past year are
• clothing/fashion (mentioned by 30%)
• skincare products (28%), and
• packaged food & beverages (26%).
When asked to name a DTC brand, consumers most often cited Dollar Save Club, Blue Apron and Harry’s.
“We seem to have come full circle now that the pandemic has brought DTC brands mainstream,” said Joe Beier, EVP of Consumer Insights at GfK. “The DTC players are building a physical retail footprint, seeing it as essential to their next level of growth. And traditional brands, concerned about the potential erosion of share – particularly among the youngest shoppers – are getting into the DTC game, either buying up brands, or building DTC platforms for their existing brands.”
