How To Launch and Scale a DTC Brand

16 Jul 2020

Direct to consumer (DTC) brands are rewriting the playbook to meet a new landscape and customer. While the pandemic has delayed launches and halted supply chains, it has also opened up new opportunities. In light of this, our latest panel event explored how to launch and scale a DTC brand today.

Hosted by our Global Head of Partnerships, Josh Yentob, we spoke to Paul Munford, Founder of LeanLuxe; Alexa Buckley, Founder of Margaux; Melanie Masarin, Founder of Ghia; and Jenny Gyllander, Founder of ThingTesting and former VC to learn the new rules of DTC:

Transparency is paramount.

The pandemic has been an introspective time for consumers and their shopping habits. Now, there is a new demand for transparency that all brands are held to. Paul has been documenting this at his luxury industry publication. “If you’re a brand centred around a purpose that you’ve been talking about for years, but as soon as it turns out that purpose isn’t as sincere, it’s perfectly fine to criticise those companies and take them to task for that. Having said that, it’s really tough to run a business that doesn’t have a mission.” Alexa agreed: “Every brand has a reason for being, but you have to walk the walk before you talk the talk,” she noted, “The quest for profit should never supersede a brand’s values.”

Build your brand around emotion.

In a saturated market, all our panellists agreed it’s not enough for a DTC business to have a pretty product: it needs to have a very strong brand to cut through the noise. With Margaux still going strong after five years, Alexa had advice to impart: “The solution [that your business offers] will be the emotional thing that keeps people coming back. After that, it’s your brand. Your brand is all the emotional unquantifiable things that resonate with your customer. Think about how you can weave it into every single customer experience - through your packaging, website, product, in store experience - that’s what will set you apart.”

Profit will supersede fast growth.

With traditional business on pause, many businesses are stepping back to reevaluate their goals. This has moved the emphasis from growth to self-sustaining profit. As an ex-VC and an entrepreneur, Jenny had noticed this trend. “I no longer sit on the VC side of the table,” she remarked, “But I am definitely hearing more about brands going for a more bootstrap financial route before putting the gas on the fire. I’m excited to see brands really taking their time before they launch.” This particularly resonated with Alexa, who told us how she also focuses on profit to sustain her brand. “We’ve never been at the mindset of ‘growth at all costs’: building a brand takes time. We’re trying to build something that lasts.” Paul echoed this: “I’ve never understood growth for growth’s sake, that’s just not sustainable.”

There will be new ways to build brand awareness.

A new industry landscape brings new opportunities to reach your customer. In particular, all panellists remarked on the importance of building intimacy in the digital world. “You have a very captive audience,” Melanie told us, “People are glued to their phones. Without real-world retail, how can you create digital word-of-mouth? We’re seeing some interesting marketing trends, I think ambassador programmes are the new multi-level marketing.” Alexa agreed, recommending a software called SocialLadder to make the most of this trend.

“You can also build brand awareness on a low budget,” continued Melanie, “It cost us $20 to set up a Ghia phone and we get thousands of messages. Before that, we had 300 followers on a Spotify playlist. Starting a conversation with your customers doesn’t have to be expensive.” Alexa had also seen how important it had been to engage with Margaux’s community in a new way during the crisis. “A new omnichannel strategy is important because you can get in front of a different audience. When we are collectively experiencing a new world together, the power of community is more compelling than ever before.”