Direct-to-consumer (D2C) brands thrive on their abilities to build strong customer relationships, optimize data and identify the unmet needs of modern customers. More and more, brands see these digital natives as a threat.
According to a February 2019 survey from customer acquisition company CommerceNext, 52% of digital retailers in North America were dissatisfied with their ability to achieve a single view of the customer last year, noting “unified customer data” performed below their expectations. For this reason, respondents planned to increase their investments most in customer data platforms and personalization technology, with hopes of making the customer experience more relevant.
To stay ahead of the game, some legacy brands are investing in D2C strategies—like merged companies Samsonite and Tumi, who are taking data optimization and personalization tactics straight from the D2C playbook. Samsonite, the world’s largest luggage company, acquired luxe-luggage brand Tumi in 2016. This union solidified Samsonite’s place in the upscale market and allowed Tumi to expand internationally. Now the brands have their sights set on transforming the digital travel space.
We spoke with the Charlie Cole, chief digital officer at Samsonite, about replicating a D2C model, prioritizing personalization and the benefits of being channel-agnostic.
What is the most appealing aspect of a D2C model, and how are you attempting to replicate that?
The ultimate benefit of having a direct-to-consumer model is the pure, unvarnished relationship you have with the consumer. That brings with it a number of benefits: data, real-time feedback and, more importantly, trust with the brand. When selling through other folks, you have some dilution in data, but you also have a level of dilution with the relationship itself.
We’re attempting to replicate that model by understanding customer needs in a way we could never achieve if we worked exclusively through third parties. This becomes a combination of conversations directly with consumers and the use of predictive data to optimize on a grand scale.
What is the benefit of a customer data platform for Samsonite and Tumi, and how does it help with bettering your personalization efforts?
We have more data on consumers purchasing travel products than probably anyone on Earth. If we’ve learned anything from the success of Amazon, Netflix, Uber (although their success is not our kind of success because of the cash burn needed), having data that you can use as the fabric for your predictive marketing and personalization is a massive advantage—if it's done well and done in a way that respects user privacy.
In what ways might being a traditional brand benefit the adoption of a D2C strategy?
For traditional brands taking on some of the characteristics of a D2C company, the greatest benefit is that they have been investing in a unified customer view since day one. They don't have data silos. They also have a more holistic view of the many marketing channels. And they have a big-picture view of everything, from brand marketing to performance marketing—they're channel-agnostic.
In what ways might it hinder D2C adoption?
We shouldn’t forget that digitally native brands are typically private companies with venture capital backers. They face a different set of realities compared with mature companies, traditional retailers, wholesalers or brick-and-mortar-first brands (who often must first please shareholders with profits). They have a different set of growth goals and internal stakeholders to please—and to not mince any words: D2Cs get to burn a lot of money. For some traditional brands, it’s not feasible to do a total overhaul of their marketing stack to unify customer data, at least not all at once. They aren’t able to respond as nimbly as D2C brands because of the profit expectations their shareholders have.
What advice would you give other brands who are thinking of investing in a D2C strategy?
You can’t fake it. You are competing against brands that have carte blanche to burn tens of millions—if not hundreds of millions of dollars. If you want to compete, you may have to change your definitions of near-term success to allow for long-term viability.
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