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Why connect-to-consumer will take over direct-to-consumer

During the pandemic years (2020 – first half of 2022) retail has seen a surge in DTC, a new form of retail that stands for direct-to-consumer. Brands like meal-replacement Huel and men’s grooming company Harry’s built multibillion-dollar retail businesses by using social media and digital-first advertising to sell directly to consumers online, without the need for middlemen. The global pandemic only accelerated this trend due to many high-street stores being forced to close and to keep driving sales by going direct to shoppers online.

However, as we move away from this era and into another, connect-to-consumer (CTC) is a newer form of retail set to take over. In 2021, Apple introduced a new transparency feature, which allowed users to opt out of app tracking, making it harder and more expensive for these brands to acquire new customers via paid social media advertising. CTC is therefore taking many pathways to reach customers simultaneously: From social media to Web3, from online shopping to the high-street stores.

To adopt it, brands will need to be creative about how they tell their story and grow their communities on these four different platforms. Consider the example of fitness apparel brand Gymshark, which in July opened a pop-up barbershop staffed with mental-health trained barbers to encourage men to open up about their problems while receiving a trim. Men’s make-up brand War Paint, on the other hand, is turning abandoned stores into showrooms for online buyers.

Much experimentation with the CTC model is also happening on social media platforms. Kylie Jenner, for instance, is using TikTok Shopping—a new feature launched in 2022 in partnership with Shopify that allows users to link their TikTok accounts to their online stores—enabling her followers to buy directly from Kylie Cosmetics on the platform. According to Shopify, orders made on social media channels quadrupled in the first quarter of 2022. 

Web3 is also creating new opportunities for brands to connect with consumers. You might even have a token or NFT in your digital wallet to unlock an exclusive offer online or a VIP experience on the high street. This is already hitting the mainstream, with Starbucks rolling out a Web3-based rewards program to give customers exclusive perks. 

The retailers who will win in 2023 are those focused on building authentic connections to their customers through all of these avenues. These businesses will thrive by becoming channel-agnostic: The tools exist now to operate a store everywhere, reaching hundreds on the high street to billions on YouTube and TikTok, as well as niche communities in Web3.

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