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Permanent · London

Eco values to supercharge growth of direct-to-consumer brands - report

Published
Jun 27, 2019
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Direct-to-consumer brands, also known as internet-born brands, are encouraged to embrace sustainability as more and more consumers begin to make purchasing decisions that reflect their environmental and ethical values.



According to Rakuten Marketing, 69% of UK consumers would use a subscription model for day-to-day high street purchases, including cosmetics and health supplements.

Direct-to-consumer brands, particularly those offering subscription-based models, are thriving in the UK, with businesses such as SimplyCook, Birchbox and Dollar Shave Club showing a conversion rate of over one in every five customers who have heard of the brand.

Price (71%) and product quality (50%) continue to play an important role in driving a purchase, but UK consumers are now also considering if a brand is ethical (17%) and sustainable (16%).

Anthony Capano, managing director EMEA at Rakuten Marketing, comments: “Now these DTC brands have become successful international businesses, they will encounter rising pressure to act as ‘good global citizens’. Legacy brands like Waitrose have very effectively leveraged consumer interest in sustainability across the media with attempts to minimise packaging. This is certainly an area that could put DTC brands – many of whom rely on packaging and transporting each product individually - on the back foot.”

EUROPEAN ENGAGEMENT

Compared to UK consumers, their European counterparts express significantly greater interest in brand values including sustainability and the eco-friendliness of products. In France, 26% of those surveyed would be motivated to buy from a sustainable DTC brand and this rises to 34% in Germany.

But having sustainable values is not enough; direct-to-consumer brands must also learn to effectively promote them, the report said. Only 47% of UK consumers currently feel the advertising from DTC brands they see online and across social media closely follows their interests.

Anthony Capano comments: “One of the key ways brands will distinguish themselves amongst eco-friendly consumers, will be partnering with the right publishers in order to target the most relevant and engaged audiences. Working with the right eco-affiliates will ensure they hit the right tone with their eco-messaging and avoid any sustainability or ethics-based faux pas, especially when marketing to regions further afield.”

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