Dive Brief:
- Almost half of consumers now purchase from disruptor brands, according to the IAB's Disrupting Brand Preference report which was shared with Marketing Dive. The study identified the shoppers of these brands skewing younger than those consumers that shop traditional brands. Eighty-four percent of these shoppers are under 54, and they are also likelier to have a household income of more than $75,000, the study revealed.
- Direct-to-consumer (DTC) shoppers are two-times as likely as people that shop at traditional brands to shop at DTC brands as part of their self-expression, the report revealed. One third of these DTC brand shoppers are identified by the IAB as an entirely new audience group called "Super Influencers." These "Super Influencers" are highly engaged in creating brand-centric content, as well as re-posting DTC brand posts in order to be influential.
- The report also identified a deeper connection between DTC brands and their buyers than traditional brands exhibit. For instance, DTC brand buyers said they see value in brands that listen to their feedback. While incumbent brands build loyalty through older shoppers on Facebook, DTC brands are building consumer loyalty and lifetime value through cross-channel interactions, the survey reported.
Dive Insight:
This new IAB study pinpoints the growing influence of disruptor and DTC brands on younger consumers, as well as the type of shoppers interested in these brands. The study suggests that such marketers must work to engage these younger consumers with advertising that connect the brand to consumers' self-expression in authentic ways.
The IAB report also highlights the importance of influencers, or "Super Influencers," in marketing DTC brands. While advertisers had been increasing influencer marketing spend, a recent report suggested that Instagram influencers have seen their engagement rates hover near all-time lows as the app becomes over-crowded with sponsored posts.
The IAB report suggests that consumers are willing to take a chance on emerging brands and that social influence is the way that DTC brands can gain ground against traditional brands that have a larger market share. DTC upstarts have been able to connect to consumers directly through digital channels, bypassing traditional retail and advertising models. Hubble Contacts, for instance, has gained market share in the daily disposable contact lens market, thanks to a DTC sales and marketing model that allowed the firm to offer lower price points than traditional competitors.
Still, traditional brands remain the gatekeepers, so DTCs must be agile and find their way in to increasing sales. As DTC brands gain ground, some traditional brands have been competing through acquisition. The Edgewell Personal Care Company, known for the Schick razor brand, revealed plans in May to acquire DTC razor startup Harry's for $1.37 billion. Similarly, Procter & Gamble recently acquired the DTC marketer Walker & Company, which promotes grooming lines for men and women with textured hair, as well as the purpose-driven feminine care products maker This Is L.
