The market is undergoing rapid changes as the pandemic continues to ebb away. Established companies, like Nike, have jumped on the direct-to-consumer (DTC) bandwagon—their sales shot up 30% to a staggering $16.5 billion in 2021.
Unfortunately, however, the stocks of some of the biggest DTC brands, like Warby Parker and Allbirds, have plummeted to 64% this year.
This has led to a mounting realization among companies that rely solely on DTC is no longer enough and that the new path forward lies in Connect To Consumer (CTC) models. This involves leveraging additional points of sale (POS), such as branded stores, third-party distributors, and strategic partnerships with other brands.
As the world continues to become more connected and digitally advanced, CTC will become the standard by which companies deliver and engage with their customers. CTC models are expected to become more prevalent in 2023.
This model creates a more holistic customer experience–brands will be able to understand customer preferences better, leveraging digital methods to interact with customers in-store and the ability to cross-sell and upsell products more seamlessly.
Brands like Lululemon have successfully implemented CTC models, which have adopted a multi-channel approach to reach their customers, offering physical and digital experiences like their online yoga classes.
CTC will soon become the go-to sales model in 2023 as companies realize the need to provide customers with different options on where and how they can shop. And as the demand for convenience continues to rise, CTC will be the only way for brands to stay competitive.
To adopt it, brands must be creative about telling their stories and growing their communities on these four platforms. Consider the example of fitness apparel brand Gymshark, which opened a pop-up barbershop staffed with mental-health-trained barbers in July to encourage men to open up about their problems while receiving a trim. On the other hand, men's make-up brand War Paint is turning abandoned stores into showrooms for online buyers.
The ability to foster relationships with customers through CTC models is critical. Though, for now, only a handful of companies have been able to make the switch successfully, it is inevitable that in 2023, CTC will become the norm for many businesses.
Much experimentation with the CTC model is also happening on social media platforms. Kylie Jenner, for instance, is using TikTok Shopping—a new feature launched in 2022 in partnership with Shopify that allows users to link their TikTok accounts to their online stores—enabling her followers to buy directly from Kylie Cosmetics on the platform. According to Shopify, orders made on social media channels quadrupled in the first quarter of 2022.
As we advance, companies must embrace CTC models to survive in the ever-evolving retail landscape. CTC is allowing brands to provide a more immersive and personal shopping experience for their customers—allowing them to compete better in the age of digital transformation.
Now that you understand the strategy, I've also written about the ecommerce marketing trends for 2023.
