Source . . Analysys Analysys (46 invited authors)

When an industry has a lot of competitors, it can be difficult for nods to get into it and get a foothold. We are all racking our brains to find the Blue Sea, but there is no shortage of "real warriors" dare to face up to the fierce competition in the Red Sea market, open up territory to break out of their own world.

In recent years, the rise of the perfect diary, Hua Xizi, HFP and other beauty brands, has given a red sea counter-attack as a black horse a template answer -Go on the path of DTC.

DTC, full name Direct To Consumer, translates directly to consumers, and the DTC brand, also known as Digital Native Vertical Brand, is rooted in the Internet and interacts directly with consumers in production, marketing, sales, feedback, etc. through the development of online payment systems, e-commerce trading platforms, logistics warehouse allocation and data technology.

In the DTC mode, consumers can enjoy the heart-tinged price without middlemen earning the difference, the brand side also because of direct communication with consumers, can more timely and effective access to data feedback. In terms of operational processes, the DTC brand has changed dramatically compared to traditional brands:

IAB《How To Build a 21st Century Brand 2019-2020》

In the traditional model, brands need to reach consumers through media, agents, retailers and other intermediate links, while in the DTC model, brands directly target consumers for product production and delivery, marketing communication, user operation, directly collect data from the consumer side and analyze, the two sides jointly realize the creation of products and content.

DTC model in 2010 or so in Europe and the United States market, and then entered China to achieve localization, more in the product windfall serious, low technical threshold, consumer feedback link longer industries, such as glasses, household goods, personal protective products. The DTC model actually applies to highly commercialized, high gross margin cosmetics categories as well.

The biggest feature of the DTC brand is that it closes the distance with the consumer, which includes both the shortening of the reach channel and the psychological resonance achieved through product creation and social marketing, all of which are supported by digital technology.

Product can play, is the emerging DTC brand in an increasingly transparent information environment to break into the beauty products market first conditions.

In the extensive sharing of stickers, evaluation videos, sketches around, today's consumers more or less have mastered the beauty products related expertise, in the process of consumption is no longer the pursuit of high-priced symbol of the social status, but more rational, concerned about the real needs of individuals.

In the face of increasingly difficult to convince consumers, DTC beauty brands jumped out of the traditional thinking, no longer ponder how to improve their profit margins, how to expand publicity to seize the user's mind, but choose to actively embrace consumers with professional appeal and knowledge: want to have the right products? Then create it with me.

Hua Xizi launched the Experience Officer Program

DTC beauty brand pay attention to consumer co-creation, with the help of convenient online communication, invite consumers to provide advice for product development, in the product testing stage to fully listen to consumer feedback, and jointly promote packaging design, market pricing and other aspects of the process. Consumers work directly with brands to make output more in line with actual needs, the promotion of a sense of participation for consumers to bring a sense of accomplishment, brand and consumer growth and progress, to obtain more good feelings.

As a result of reducing the outsourcing of research and development, marketing, operations, terminals and other links, actively compress the premium space, DTC beauty brand can provide very favorable prices, production options and big-name cosmetics the same Yingtli, Cosmeth, Essien and other first-line foundries, can be comparable in quality or even beyond the industry's leading products, to achieve high-quality products cost-effective. Products that meet the rational needs of consumers promote the creation of user reputation, and then through social platform sharing publicity to attract more attention.

DTC beauty brand is difficult to compete with traditional brands in product richness, usually using a more focused play, pay attention to the creation of explosive products, although the number is small, but each product has a certain amount of sound, product line simplification is more convenient for consumers to make quick decisions.

As a new force in the market, DTC beauty brand from the beginning to face the challenge of rapidly establishing awareness, win the trust of consumers, even if the price setting, product development has fully taken into account the consumer, but the fragrance of wine is also afraid of the alley deep, for young consumers, friends and family recommendations, KOL / KOC grass proportion gold launched advertising more convincing, so social marketing has become an excellent way of dialogue.

On the one hand, DTC beauty brand through the public number, small red book, e-commerce live, micro-blog and other channels for high-frequency information display, to achieve the strengthening of consumer memory, the use of social media to reduce the cost of access;

On the other hand, the social network of the internet red people published product evaluation, exquisite images and other content can attract public attention and discussion, the user's willingness to share also driven them to use feedback po to the platform, in the process by the social content grass consumers rarely worry about quality and brand endorsement.

DTC beauty brands have spoken out, prompting consumers to be more vocal, to engage in close dialogue with users through social platforms, and to work with consumers to create content.

With Generation Z gradually becoming the main consumer force of beauty products, its behavior affects the brand's decision-making and future development direction, for their beauty products need to have young characteristics and strong personality, these characteristics that meet the psychological needs of consumers need to be passed through content creation.

HFP's brand proposition

DTC beauty brand in the information promotion, product packaging have carried out content creation. Its brand story to challenge traditional ideas, advocate a new way of life as the theme, the formation of a unique brand memory point and personality to win recognition;

Rich marketing content provides consumers with a social currency that enables them to self-exempede, socialize, and promote tap water sharing in the process of product consumption and content sharing.

In the private domain traffic operation, China's DTC beauty brand out of a unique road.

Because e-commerce platform, logistics system is relatively immature, foreign DTC beauty brand mainly through the official website for sales, on the website directly set up a brand community for consumers to discuss and cultivate their own KOL.

The brand community of Flesh's official website of DTC brand

And China's DTC beauty brand sales more rely on e-commerce platform, the official website visits relatively small, rarely in which to open a discussion area, more rely on WeChat ecology for private domain traffic pool construction. With WeChat small program, brands can obtain consumer information, create an online market mall to shorten the purchase path, due to the high frequency of use, WeChat messaging has become a more direct and effective way, with the introduction of enterprise WeChat, DTC beauty brand can also become WeChat friends with consumers, in the form of a circle of friends to display product information, interaction in the chat box, such as the perfect diary launched a small complete son, xiaomeizi virtual BA image, in WeChat to achieve direct communication with consumers.

Perfect Diary's WeChat and Circle of Friends

"Product development - marketing communication - delivery experience - feedback collection" has been around for a long time, but there are very few brands that can really do it to close and spiral up. Data as the basis for decision-making, guiding the optimization direction of other links, and the traditional layer distribution, business agent model of the data obtained in terms of quality and time-ability are still to be improved, naturally also affected the progress of other steps.

For DTC beauty brands rooted in the soil of the Internet, digitalization is ingenered in genes, and data provides a source of rapid growth. In addition to the production link to the foundry, the remaining steps are basically controlled by the DTC brand side, effectively solve the operation process caused by too many participants in the data fragmentation problem, completely channel data through the first-party database, to optimize the details from a more global perspective, at the same time, the independent control of the data more flexible, can support real-time dynamic data monitoring, greatly improving the optimization speed.

Data capability support and lightweight business architecture give DTC beauty brands the ability to react quickly. Consumer data support brand tracking user behavior, find specific problems, promote product development and marketing strategy adjustment, complete link data acquisition for DTC beauty brand constantly trial and error and optimization provides the conditions. HFP, for example, has made continuous adjustments based on data feedback in the release of WeChat Public articles.

HFP adjusts WeChat's public number based on data feedback

Data has become an indispensable infrastructure for the growth of the DTC brand and the digital transformation of traditional brands.

The success of several emerging DTC beauty brands has driven the popularity of this model, with more and more small and beautiful DTC brands entering the public eye through social media and e-commerce platforms, and traditional fast-food brands also synthing DTC businesses through acquisitions or incubators.

DTC brand development is a good picture, but with profitability, brand building, traffic acquisition-related issues should also be paid attention to.

DTC beauty brand by reducing the intermediate link, reduce profits to provide consumers with preferential prices, but also let the market changes caused by inventory, supply chain pressure added to their own body, now most DTC beauty brands are using price reduction discounts and other ways to inventory, but the long-term nature of this approach is still debatable. In addition, to do cost-effective products, need to ensure high frequency, high re-purchase rate, in order to have enough cash flow to support their own development, increasingly fierce competition in the environment, the difficulty of doing this is getting bigger, sales, capital and other aspects of the pressure is increasing.

Traditional brands have experienced a long period of brand building, in the hearts of consumers to form a unique image, even if the product is expensive, experience is insufficient, still have loyal users. In contrast, the rise of DTC beauty brand is extremely fast, but fancy marketing easy to earn gimmicks and ignore brand precipitation, the way to label large-name affordable alternatives is also difficult to form a unique brand awareness. In the long run, it is easy to lead to lack of momentum, therefore, how to make brand building to keep up with the pace of development is also a challenge for DTC beauty brands.

There are two main types of DTC beauty brands that are gaining momentum, one is based on the popularity of brands such as Rihanna's Fenty Beauty, Kylie Jenner's Kylie Cosmetic, junping of the King of Junping, etc.; In the course of DTC model practice, the Internet has undergone a transformation to the second half, and now the difficulty of obtaining traffic has increased dramatically, while, as brands pay more attention to social marketing, the price of advertising on social platforms has also been rising, creating a challenge for the new DTC beauty brand.

With the rapid growth of e-commerce platforms and social media, the DTC model may be waiting for the market to explore in an environment where technology continues to change.