Blog Post - Alex Steer & Mark Bolitho, Nov 3 2020

The post-lockdown shopper: How D2C brands can thrive in a new environment

The post-lockdown shopper: How D2C brands can thrive in a new environment

At the risk of stating the obvious, this year has been a funny one. That’s not to say that life is ever easy, just look at the last three. We’ve had the introduction of the GDPR, swiftly followed by Brexit, topped off by the UK Government introducing a total shutdown of society in response to the coronavirus epidemic. From our business perspective the effect has been similar insomuch as we’ve seen people sitting on their hands and a ‘wait and see’ mentality on each occasion, with everyone playing catch-up in between.

This occasion has been different, however. There’s been a polarisation of winners and losers with virtually nobody in the middle. The effect has been the same though – little or no prospecting activity. The winners tended to be very big players, experiencing organic demand way higher than their usual Christmas peak with zero effort. The corollary saw the losers being hit hard, with demand hitting the floor. We saw a few brave ‘loser’ brands with campaigns already in the pipeline carry on regardless and do really well while letterboxes were quiet, but for the most part marketing was cut. Sadly, a couple haven’t made it and have ceased to trade. Others have made staff layoffs or cut hours of existing staff to reduce costs in a decimated market.

Those struggling with demand turned to their existing customers in order to strengthen the relationship, those with abnormally increased demand have necessarily scaled in order to meet it, and now want to both maintain higher levels of new customer acquisition and keep their new customers. CRM has rarely been more important.

Over the last few months, the COVID-19 lockdown in the UK has driven a lot of new buyers into the direct-to-consumer space. As the shops shut their doors, consumers' appetite for fresh inspiration didn't go away, but it was forced to shift from offline to online.

At Wunderman Thompson we manage one of the UK's largest D2C transactional data co-ops, iBehavior, helping some of the UK's best D2C brands navigate a fast-changing environment. This provided a unique view into the changing shopping behaviours of millions of people, giving us a front-row seat to witness a dramatic shift in consumer behaviour in real time.

Over lockdown, we saw a huge influx of new buyers into the D2C space, including into high-end verticals like fashion, homeware and jewellery. D2C is no longer a niche, and these buyers represent a modern mainstream audience with money to spend.

Many D2C brands will know this for themselves - they will have seen transaction volumes rising and new users spending with them for the first time. But for many of these brands, these new customers will be little more than a name, an address, an email and the contents of their first basket.

Unless D2C brands act fast to start building relationships, they risk losing the new customers they have just acquired over lockdown. There are five actions that D2C brands need to take in order to turn a lockdown trend into permanent gain.

Five actions for D2C brands for sustained gains

  1. Get to know your customers as people. Just because you've never seen them before, doesn't mean you can't get to know them. Identity resolution services can help you turn the few data points you have into a rich picture of your new customers - who they are, their lifestyles and interests, and what they spend on.
  2. Find the true sources of value. Not all your new customers are alike. Our transactional data co-op lets D2C brands create better lookalike and value prediction models by enriching their data with millions of data points from their customers' purchase histories with other brands. We have rich data on the customers that you are just seeing now for the first time.
  3. Find your next customers. The new customers you have acquired over lockdown are just a fraction of the new buyers who have come into D2C during that period. Our audience acquisition data and modelling services mean you can find high-value prospects who are exploring the category but haven't found your brand yet.
  4. Don't get lost in the digital noise. In the post-COVID rush to retain customers, every brand will be using email and social media to re-contact the people they have just acquired. There's a huge risk of your brand getting lost in a sea of digital sameness. Because co-op consumer data tells us about real people, including their home addresses, we can help you build winning direct marketing and advertising strategies (e.g. direct mail, addressable TV, outdoor advertising) that will reach and convert more new customers.
  5. Start building D2C consumer confidence. We've observed that for many D2C brands, the new customers they're attracting are just as affluent as their existing customers... but right now, they're spending less. For many lockdown shoppers, D2C is an unfamiliar environment and they may not know your brand. Now is the time to begin active CRM outreach to your new buyers, to build your brand image and give them confidence to spend more and increase their average order value.

Best of luck to everyone for the remainder of the year, brace yourselves for a big finish!


Alex Steer - Chief Data Officer, EMEA, Wunderman Thompson

Mark Bolitho - Business Development Director, Wunderman Thompson Data