For small, medium, and large direct to consumer (D2C) brands, social media is the most effective channel for acquiring new customers, lowering the cost of customer acquisition, and achieving eCommerce sales, according to The State of D2C Marketing in 2019 by Yotpo, an integrated commerce marketing solutions provider.
“The report is based on an online survey conducted March-April 2019, in partnership with Magento, an Adobe company,” said Cristina Dinozo, Senior Director of Marketing Communication at Yotpo, in a blog post announcing the study. “It includes the responses of 512 eCommerce and marketing decision-makers, 41% of them [are] brand founders.”
According to the report, D2C brands acquire the majority of their customers through social media, followed by organic search, and then direct traffic. Physical stores as an acquisition channel perform slightly better than paid ads and influencers in attracting new customers.
“With social media and search registering as the top acquisition channels for D2C brands, marketers are increasing their investment in Facebook, Instagram, and Google ads, accordingly,” said the report. “The increase in digital spend is offset by a decrease in traditional media channels.”
Respondents from small and medium D2C brands shared that they would decrease spending on print, TV, radio, and outdoor mediums by 27%, 26%, 25%, and 24% respectively. In contrast, respondents from large D2C brands claimed to be increasing media budgets across all mediums, including offline channels.
According to Yotpo, user-generated content (UGC) in the form of customer reviews, photos, and videos provides social proof that drives purchase confidence, enhances brand perception and creates a sense of community.
Respondents shared that they employ UGC throughout the buyer journey to bolster engagement and sales. While the fashion and food vertical employ UGC extensively, the report found that the travel & hospitality sector has yet to catch up.