Performance-based D2C marketing enabled brands to thrive in a pandemic-affected economy. Admitad India’s Neha Kulwal deep dives into the trend to gauge the impact.
The year 2020 has been exacting for businesses — big and small — across the world. While e-commerce giants struggled with their supply chains, local offline businesses wondered if they would even survive the lockdowns caused by the pandemic. Across industries, though, one trend has emerged as key: embracing digitization. For direct-to-customer (D2C) brands, the challenge called for finding more efficient and impactful ways to reach out to their customers.
While some have struggled, many others have succeeded in tapping into the inherent synergies between the growing digital shift and their business models through new-age marketing channels. Here is a look at how leading D2C brands are marketing themselves through the pandemic, and the resultant impact on their business:
Performance-based affiliate marketing
Affiliate marketing is emerging as an increasingly potent and effective strategy for all kinds of business. In the US, 16% of all e-commerce sales are generated by affiliates, who advertise products using trackable weblinks and earn a commission for every click that successfully converts into a sale. These affiliates could range from bloggers and social media influencers to email lists and major media websites.
Affiliate marketing offers different types of customizable solutions to advertisers for their marketing and promotional activities. There is a wide range of inventory types to choose from and multiple media buying models to explore (e.g. CPA, CPS, CPC). Advertisers have the option to experiment within the affiliate channel in a fair risk-averse manner to ultimately arrive at the right mix. As a result of its scalable and customizable affiliate marketing has emerged as a key driver towards the success of D2C brands.
During the COVID-19 lockdowns, for example, The Man Company, a leading men’s grooming products manufacturer in India, focused heavily on promoting products on their own website using the affiliate channel as a key driver. With physical retail out of the question, it aimed to form a more direct relationship with their consumers and gain greater control over customer experience and communication. The move also provided The Man Company with detailed and personalized data such as buying patterns, trending products on the basis of demographics, and even heat maps that show where visitors interact with the brand’s website and for how long. This enabled them to take further steps towards optimizing their overall marketing activities.
The Man Company analyzed the data to amplify its digital marketing efforts in real-time, with a dedicated focus on driving sales through affiliates. As a result of this development, a whopping 24% of the brand’s sales between June and August 2020 came from affiliate channels.
For brands who have successfully established a strong base on social media, a more hybrid approach — combining their platforms and those of their affiliates — has proven to be a winner. Take the case of Mamaearth, a toxins-free skin and hair care brand for infants and adults. The brand managed to grow sales throughout lockdowns, even as many other brands with comparably bigger budgets struggled.
Not only did the brand quickly identify the need to shift focus from offline retail to customers online, but it also leveraged its digital assets along with those of affiliates to drive more sales. Mamaearth used data on demand cycles and trends that it had already collected from personalized interactions with customers to identify the digital strategies that would yield the best results. It finalized a multichannel approach, involving marketing with affiliates and on its channels on Facebook, Instagram, and YouTube. The impact was instantaneous and impressive, with affiliate channels contributing around 20% to the brand’s monthly sales throughout the lockdown.
Affiliate and owned marketing channels have provided D2C businesses with a powerful strategy to overcome the challenges presented by the pandemic. The efficacy and impact of leveraging these new-age marketing channels are obvious. As these brands continue to employ digital resources, even in the post-COVID world, we can expect them to drive ever-greater growth and scale – paving the way for their long-term success.
The article has been authored by Neha Kulwal, Country Manager, Admitad India.