Is the DTC marketing model an effective way for traditional brands to transform into digital marketing?

This article focuses on the difficulties in the digital marketing transformation of traditional brands, analyzes the effectiveness of DTC marketing by traditional enterprises, and provides relatively successful cases of transformation to the DTC model as a reference. It is recommended for those who want to learn more about the DTC model.

1. What challenges do traditional enterprises face in transforming to digital marketing?

The purpose of digital transformation for traditional enterprises is to reach end users, understand their essential needs, conduct refined operations, and thus discover greater value for users.

However, more than 90% of traditional enterprises have to pay tuition fees in the process of digital transformation and will encounter similar problems: they will be obstructed and strongly opposed by channel dealers and distributors. The digital marketing department of the enterprise has no ability to directly reach end consumers. The data obtained is not only one-sided, but also untrue and inaccurate. Even if various algorithms are used, it is of no help.

Without data from sales terminals, it is impossible to form a data closed loop, and the purpose of digital marketing cannot be achieved.

Yang Jianyun said that the difficulty of digital transformation of traditional enterprises is not a technical problem, but a problem of interest distribution and management. In traditional enterprises, many small channel dealers and terminal stores are controlled by channel dealers. If you want to bypass channel dealers and directly let stores promote apps and directly control user data, you will naturally be obstructed by channel dealers; it is also unrealistic for you to rebuild channels. On the one hand, the cost is huge, both in terms of time and money; on the other hand, at this time, choosing to build traditional channels is itself contrary to the trend and digital marketing.

2. Why do we need to conduct DTC marketing?

Traffic is getting more and more expensive, and the cost of acquiring customers is getting higher and higher. Various platforms hold traffic firmly in their hands, and the platforms have formulated various rules. Merchants must strictly follow the rules of the platforms to do business, and it is difficult for brands to directly control customers. Although the orders belong to the merchants, the users belong to the platforms. Therefore, starting from the second half of 2016, especially after 2019, many brands and merchants finally understood and began to intentionally guide customers to their own private domains and began to focus on the operation of private domain traffic.

3. Examples of Brand Transformation to DTC Model

In the early days of DTC, brand merchants opened stores on e-commerce platforms. As traffic costs became increasingly high, they intentionally guided users to transfer to their own traffic pools. When users repurchased, they could bypass the platform and make transactions directly with them, effectively reducing operating costs. They gradually built their own ecological system to serve users well, and at the same time, they could combine offline stores to further strengthen their sticky relationship with users.

For today's DTC, traffic acquisition no longer relies solely on platform e-commerce, but instead uses content platforms and e-commerce platforms as public domain traffic to divert traffic , such as Xiaohongshu, Douyin and Kuaishou platforms, Video Accounts, Tmall, etc.

They regard Douyin, Kuaishou, Tmall and other platforms as their own public domain traffic, and use various means to divert traffic to private domains, conduct private domain operations, interact with fans, and improve user retention, repurchase rate, and user stickiness. At the same time, they use offline stores to enhance user experience, trust and brand identity, further enriching the consumer experience and strengthening user connections.

Yang Jianyun said that content platforms and e-commerce platforms are not only sources of traffic, but also dialogue platforms.

At the same time, while conducting matrix marketing and traffic diversion on major content platforms, we can frequently control and perceive changes in consumer demand based on users' attitudes towards content (push, click, browse, comment, forward, etc.), select products in a targeted manner, and continue to create popular products.

Yang Jianyun reminded that DTC can also help brands provide effective data in multiple dimensions such as user relationships, connection methods, scenario characteristics, interests and preferences, reduce unfavorable variables, strengthen the influence and control over the consumer decision-making process , thereby improving operational efficiency and achieving the goals of digital marketing.