How can direct to consumer brands stay competitive online?
Over the last few years, we’ve seen a shift in attitude towards ecommerce. Brands that work with wholesalers or resellers are now also reevaluating their own direct to consumer strategies, no doubt prompted by Covid-19 and the global consumer move towards online.
Sport and lifestyle brands have led the way in this field. The likes of Nike and Adidas have showcased clear statements of intent – they’re focused on gaining market share using their direct to consumer proposition (as opposed to taking products to market via resellers), and ecommerce is a focal point.
With the mass shift to online, DTC brands are reviewing their wholesale policies, whereby they restrict the amount of suppliers both within ecommerce and in-store, but also control how those brands promote them. The main aim is to increase sales directly and control more of the user journey. However, it can still be a challenge for brands to stand out against resellers and wholesalers, and also their competitors online.
So, how can brands leverage the affiliate and partner channel in order to increase DTC sales and support wider marketing activity?
Build the right foundations for success
When a brand launches an affiliate program, internal managers often have little experience within the sector, and tend to launch with a basic technical set up for ease.
However, due to new iOS changes, brands are now being pushed to review their affiliate tracking. This is the perfect opportunity to improve what is tracked within the affiliate channel at point of sale. The ability to bring more data into the tracking partner gives the account manager better ways to analyse and optimise partner performance, thereby improving revenue. As more data comes into the affiliate channel, brands can use that data to inform and optimise commission structure in order to maximise budget.
First on any brand’s to-do list is to ensure you are paying commission on the right sale amount. Of 30 brands’ conversion pixels recently audited by Silverbean, a staggering 60% were not paying the right sale amount. This included the likes of John Lewis & Partners, Stone Island, Barker and Stonehouse, New Balance. Want to take advantage of our free audit? Get in touch with Silverbean Performance Account Director, Nic Yates.
Why is this such a must for brands? Due to the competition for affiliate links, a publisher will have the option to send traffic direct to the brand or to a wholesale partner. It might come down to the relationship you offer or the CPA. If it comes down to the CPA, and you’re currently paying out on the wrong sale amount, your CPA is simply not being compared like for like, and you run the risk of losing that direct traffic.
For example, in the case of New Balance, the brand’s default CPA was 8%. A wholesale partner offered 9%. On the face of it, the wholesale partner was offering more CPA to a publisher – but in truth, New Balance was paying an effective 9.6% as it was paying on VAT, whereas the other brand was not.
Use a range of partner channels to increase new customer acquisition
Silverbean works across six key partner channels. These are:
- Traditional affiliate management
- Brand to brand partnerships
- Media partners
- Search domination
- Influencer marketing
- App campaigns
Traditional affiliate management
Utilising traditional affiliates can help you tap into new areas and offer a competitive edge. When we review brand campaigns, there’s always a lot of opportunity within recruitment and affiliate optimisation. Often, we find there are publishers missing from the affiliate mix – especially for brands operating in multiple countries. We also find that there’s a lot more a brand can do to optimise the performance of publishers already on the program.
For example, a brand that leverages strong content partnerships will have an advantage over competitors not using this resource. The brand can openly communicate how the product was made, send exclusive imagery and content pre-launch, and control the narrative through the content partner.
It’s also important to adapt to the season. For example, when a brand is in full price, mid season sale, and end of season sale, there should be bespoke campaigns running – and tailor to that season – to better drive performance, rather than simply leaving the channel to tick over.
Brand to brand partnerships
For many verticals, brand to brand partnerships are a key opportunity. Where brands have worked with partners to drive awareness in-store, brand to brand partnerships can be leveraged to replicate these campaigns online; often with a broad choice of complementary partners whose audiences are highly relevant.
Brands can also take advantage of working with media partners such as The Telegraph, Daily Mail, Mirror etc. It’s often possible to form exclusive agreements with select media partners, so that any brand mention is exclusively linked to the ecommerce website over a reseller.
A lot of brands can also reclaim important market share. Here, a search domination strategy is key. At Silverbean, we look at non-brand keywords that will drive volume in sales. For retailers, this might be a product type or even a range name. It is important that you align content partners and support them with SEO (i.e keyword-rich product and brand content) to rank for these terms. Once the brand has PPC search/shopping campaigns live, site pages ranking and content partners ranking, you’ll own more of the search term – which will increase sales DTC.
By working with influencers, brands can encourage customers to convert directly by showcasing the real, lived experience of the product ‘in a live environment’ rather than professionally modelled or perfectly polished brand communications. Silverbean often partner with influencers to launch product sales or new season collections to demonstrate clients’ products in legitimate, ‘real-world’ scenarios.
Brands can leverage the affiliate and partner mix to increase app downloads via app install campaigns, and drive affiliate activation or conversions within the app setting with app activation campaigns. As well as driving DTC sales, success can also be measured based on other soft/hard KPIs including app installs, cost of sale, lifetime value and ongoing new customer/existing customer split.
Offer the best publisher experience
Lastly, a differentiator between a brand and wholesale or competitors is the ability to offer the best publisher experience in the market.
Brands can often drive loyalty from long-tail publishers by developing deeper relationships with them. A few tips here: ensure you proactively arrange meetings, are available across several forms of communication (WhatsApp, Slack etc.) and also offer real value in return. Look to run exclusive events for product launches, tours of productions, or explain how a release was made. For example, HelloFresh ran a live cooking workshop and invited partners, influencers and publishers to attend.
The affiliate and partner marketing channel can offer a lot of opportunities for brands strengthening their DTC offering. Once they recruit the right publishers, brands should offer them the best experience to harness loyalty. Make sure the foundations of your program are strong, then take advantage of the partner channels on offer to grow your program – and revenue – further. To check your foundations are preparing your brand for success, contact firstname.lastname@example.org or request a free affiliate audit.