Local DTC brands top Glossier, Harry’s & Casper, converting a quarter of consumers

  • SimplyCook, Made.com, Abel & Cole and Birchbox lead the UK ‘direct to consumer’ movement
  • A quarter of consumers who have heard of these brands are now paying customers
  • Social media drives awareness but not the sole point-of-sale for online shoppers

LONDON, UK, 22 May 2019 – Research into consumer awareness of ‘direct to consumer’ (DTC) brands by Rakuten Marketing reveals four of the top five names are local, UK businesses, putting them ahead of global brands Glossier, Harry’s and Casper.

Conducted among 2,000 UK consumers and a further 2,000 in France and Germany, the study proves that despite recent headlines, the top global DTC brands are lesser known than SimplyCook, Made.com, Abel & Cole and Birchbox. Global business, Dollar Shave Club – the DTC archetype – also makes the top five.

When it comes to sales, the research also confirms the efficacy of the DTC business model – for example 28% of UK respondents who recognise Birchbox have also bought from the company, 27% have bought from SimplyCook and 24% from Made.com.

Brand % of all UK consumers who have heard of the brand Of those consumers who have heard of the brand, % who have made a purchase
SimplyCook 50 27
Made.com 44 24
Dollar Shave Club 43 22
Birchbox 35 28
Abel & Cole 35 21
Harry’s 32 26
Tails.com 26 33
Casper 20 23
Glossier 16 26
Brushbox 15 21

High conversion channels

Looking at where consumers actually convert, the numbers are an almost even split. While 17% of consumers profess Facebook is their most likely point of sale, 12% still rely on the brand’s own website and 14% prefer cashback sites and voucher / discount code sites, highlighting the role of affiliate marketing in driving conversions.

Anthony Capano, managing director, EMEA at Rakuten Marketing explains, “DTC brands have historically relied on performance-based digital advertising strategies. Huel was started when founder, Julian Hearn, sold his affiliate marketing business to fund his successful business venture. Now, many leverage high return publishers to target audiences with direct response ads to drive conversions.”

Importantly, performance marketing should not be seen through the linear lens of social and discount sites. MoneySavingExpert is a great example of a consumer advice publisher where as many as one in ten consumers are most likely to click and buy from a DTC brand.

Fashion label Meli Melo is undertaking the move towards a DTC business model. CEO of Meli Melo, Doug Ker, comments, “Brands who can orientate campaigns through affiliate marketing with key business objectives stand to benefit the most. Focusing on what really matters, Meli Melo has been developing close relationships with regional publishers offering the most relevant and engaged audiences in different regions, for example in APAC, which puts our brand in front of our premium international buyer.”

Are DTC brands feeling social pressure?

Looking at the channels that have catalysed awareness for these brands it’s clear social media still plays a heavy role. 44% of UK consumers place Facebook as a platform that has raised their awareness of DTC brands. YouTube (31%) and Instagram (28%) are close behind.

Celebrity social media endorsements are one of the most familiar social media expenditures among brands. In fact, more respondents (11%) backed micro-influencers – those with up to 30,000 followers – as an effective means of raising their interest in DTC brands, supporting findings from a recent Rakuten Marketing study into influencer marketing.

Doug Ker explains, “The targeting available through social platforms is like nothing many retailers had encountered before. However, as these tools mature, they are also becoming more expensive, urging independent brands such as Lush, to consider whether there are more efficient solutions to reaching core segments of their audience.

“It’s ultimately an extremely high reward approach to sales, but the close relationship between awareness and purchasing doesn’t solely exist in the realm of social media.”

Methodology

Rakuten Marketing conducted research with Savanta in April 2019 amongst 2,000 UK consumers. A concurrent survey ran among 2,000 consumers in France and Germany.

About Rakuten Marketing

Rakuten Marketing uses innovative, data-driven technology to help brands reach consumers with timely and authentic digital advertising experiences. Pioneering AI and machine learning, paired with unique data and inventory from the Rakuten ecosystem, enable brands to identify new audiences and re-engage existing ones. This predictive technology allows Rakuten Marketing to deliver valuable experiences people love, resulting in cost-effective performance across its integrated marketing solutions: affiliate, display and search.

Rakuten Marketing is a division of Rakuten Inc. (4755: TOKYO), one of the world’s leading Internet service companies. The company is headquartered in San Mateo, California, with offices in Australia, Singapore, Brazil, Japan, France, Germany, the United Kingdom, and throughout the United States. Follow us on Twitter or learn more at https://rakutenmarketing.com/en-uk.

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Lila Tesfaye for Hotwire
020 7608 2500
rakutenmarketing@hotwirepr.com