Born on the Internet: We Analysed 4 of Australia’s Direct-to-Consumer Brands Growth Strategies

Born on the Internet: We Analysed 4 of Australia’s Direct-to-Consumer Brands Growth Strategies

A new generation of disruptive brands are shaking up retail in a massive way. D2C or direct-to-consumer brands are built on a business model that minimises the middleman and you guessed it – sells direct to the consumer.

Powered by the growing ease of global distribution, some of the DTC darlings that have set the precedent globally have been the likes of Warby Parker who turned the eyewear industry on its head; Casper who developed a bed-in-a-box concept; Hims that brought some vital men’s health and wellness conversations out of the closet, and Away who brought modern technology to a suitcase. Given the success of these brands, it is not surprising to see localised businesses appearing in other markets like Australia.

In an identical field are Digitally Native Vertical Brands (DNVB) in which brands are commercialised via ecommerce channels and are most commonly treated as online retailers that are vertical and niche in their focus on consumers.

Apart from their business model, these brands all have a few things in common.

  • They know their customers extremely well.
  • They invest in an engaging and aspirational brand.
  • They build their cultures, values, and ethos into the business from the ground-up.
  • They develop exceptional end-to-end customer service experiences and utilise the benefits of technology to deliver it.
  • This includes clever paid marketing strategies that aren’t just designed to sell, but tell powerful brand stories.

What’s exciting is that we’re now seeing Australian brands beginning to execute similar concepts

In this article, we take a look at four localised examples of these DTC and DNVB brands and examine how they’re building the future of brands that are born on the internet

Pilot

Pilot’s mission: Pilot is a technology platform that helps Australian men take command of their physical and mental health.

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How they do it

  • They are investing in the development of an engaging brand.
  • Delivery of fast, hassle-free and discreet service.
  • Investing in high-quality educational content.
  • Through providing an intuitive online customer service experience.
  • Combining clever storytelling with paid advertising.

Pilot’s brand encompasses some great qualities; it’s witty, straight-talking and sexy. But the best part is, it’s a brand that has successfully broken down the barriers on conversations that Australian men are finding difficult to confront.

A huge part of their brand offering is educational content. They’ve created a series of guides that forms a large part of their content marketing strategy.

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Pilot’s social presence, particularly their Instagram page, has been cleverly curated with custom designs and images made in-house by the team. It’s what takes their branding to the next level.

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They keep their user experience on the website simple with an online consultation process. Users select a health issue – whether it be mental health concerns, sleep issues, erectile dysfunction or hair loss – and complete a pre-screening application to be connected to a GP or pharmacist.

Within 24 hours, the partner doctors are able to provide Pilot customers with a recommended treatment plan. The whole process of the online consultation, including follow-ups, takes 1-3 days. If you’re happy to go ahead, your treatment is shipped from a partner pharmacy; in an outer bag that doesn’t feature any Pilot branding for privacy.

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Suddenly, Pilot has taken away the embarrassment often felt by men with these issues and the hassle of booking and attending appointments. And the positive feedback is already building.

They’ve incorporated reviews as a stand-out section in their website navigation which we expect is going to form a large part of their organic growth in the future.

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Pilot’s advertising technology stack includes Facebook Custom Audiences, DoubleClick and Google Remarketing. And they aren’t afraid to bid on high volume Google search keywords such as ‘viagra and’ ‘hair loss treatment’ with simple and straight-talking ads.

Koala

Koala’s Mission: We make furniture for the digital age. We’re a young company combining two of the best inventions in the last 100 years… furniture, and the internet. This lets us replace awful industry practices, like overpricing and showrooms, with a complete experience, from high-tech design through to instant delivery.

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How they do it

  • Fierce and edgy creative.
  • Smart content marketing strategy, executed by an in-house content team.
  • Digital-first mindset.
  • Lots of user-generated content and reviews.

Following in the footsteps of US-based mattress company Casper, Australian made and owned startup Koala originally became the talk of the town for its 4-hour delivery mattress-in-a-box service and 120 risk-free trial period. Now, in addition to that, they are gradually adding more furniture items to their offering. They’ve worked hard to perfect their products, but even harder to build the brand behind it.

Koala has always been a digital-first brand, but they make other channels work into their strategy.

Before the Australian startup started exploring outdoor advertising, Koala relied heavily on digital advertising, specifically retargeting. It’s always been about focusing on driving traffic to their website.

They take a very different approach to their offline marketing, which has given them notoriety in the marketing world.

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Ikea didn’t like it….

So Koala responded.

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Each cheeky billboard is created to be “shareable” and is turned into a Facebook ad and targeted at new consumers.

Their approach to TV is also very different from what you see on other brands. Their recent TV campaign aimed to destigmatize taking a sickie for your mental health. They focus on all of the prime time spots and use these quality placements to drive people to the site for the first time. Then, they retarget this audience across social networks and use display advertising.

Koala’s creative and performance team are so closely linked that it creates a strong feedback loop and allows the team to pivot quickly on digital tactics and strategy.

There are very few brands on Facebook that really nail the ecommerce Facebook Ads game. Unlike Google Search and Display Ads, people scrolling their news feed aren’t actively seeking a product sell.

Koala uses Facebook Ads to drive more people to visit their online store, and they do it well.

They take all things into consideration – the ad copy, design, offer, and button.

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For Koala, they’ve seen their biggest returns on edgier creative. This article is a great read, and written by Koala’s previous Creative Director, providing more detail about how Koala approaches creative marketing.

Bailey Nelson

Bailey Nelson’s Mission: Our focus is delivering the best value for money in the world, bar none. Our design vision is to create beautiful, modern and iconic products made with the best and most responsible materials that never go out of style. We oversee every single step of the process from start to finish to ensure that we only ever produce products that we’d be proud to show our friends and family.

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How they do it

  • Innovating the entire buying glasses experience.
  • Using social media not just as a marketing channel; rather – a way to interact with their customers.
  • A service delivery model that exceeds the incumbent retailers.
  • Transparency on how the product is made.
  • A seamless omnichannel experience.

Before Bailey Nelson came along in Australia, buying glasses was a stale, clinical and expensive experience. Now, this Aussie startup is using DTC commerce to reduce their overheads and pass on the savings to the customer without affecting the quality of the product. That is one of their biggest differentiators in the glasses market.

From browse to add-to-cart, Bailey Nelson’s user experience is simple, clean and effective.

Broken down into five stages:

  1. What prescription type?
  2. Add your Prescription
  3. Enter your prescription (if necessary)
  4. Lens options
  5. You may also like (the value-add)

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If the user does not need lenses with prescription and proceeds to select that option, the website skips them to the next relevant stage of the purchase. The process has been refined to make it as easy as possible to convert customers online and live up to the expectation of an uncomplicated optical purchase.

While Bailey Nelson is a DTC brand, like many DNVB’s they understand the strength and need of offline commerce through physical stores. Each store is designed to create the same ease of purchase that users get online with the added benefit of in-store optometrists that can provide eye tests that are bulk billed under the Medicare scheme.

They approach their social advertising with the same simple and clean design. They focus on the price point in their ad copy and have recently launched a campaign on how their frames are made.

We could assume this messaging approach is to solidify that although they are well-priced, they are high-quality.

July

July’s mission: We exist to bring better design and thinking around how we travel. To elevate your travel standard from product-buying to being augmented around the experience of considered design and service.

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How they do it

  • They seek explicit user feedback to design their product.
  • Delivery of a product that is longer lasting and stylish luggage at a fraction of the price of traditional luggage.
  • A simple and carefully considered product line with the option to personalise.
  • Easy online buying experience.

Melbourne-based startup brand July has disrupted an industry that has been stuck in its ways for over 30 years. As consumers, we’re traveling way more frequently than we ever did and technology is continuing to provide new ways of making our lives easier. In July’s case, it’s when we travel.

They read over 4,000 reviews of existing cases and began designing a product that would fix these issues. The result: sustainable longer-lasting luggage that is cheaper than traditional prices.

July has created product pages that focus hard on the features. Their best feature yet? A cleverly designed ejectable battery that charges both your phone and your laptop when you’re on the run. Okay, we also can’t forget the hidden laundry bag which keeps your worn items from making the rest of your clothes smelly.

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They also make it an easy path-to-purchase online. Select a colour, additional add-ons and upgrade your case with your own personalisation if you’re so inclined.

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Although July launched as an online-only store in December 2018, they recently opened their first physical store in August this year after they received feedback from customers that they wanted to touch and feel the luggage. With the in-store experience, buyers will still receive all the benefits of a direct-to-consumer model, such as a 100-day trial and a lifetime warranty.

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To ensure July’s branding and online experience seamlessly integrates with their offline experience, they incorporate the same colour palette from their website design and reflect the soft edges of the luggage with smooth, seamless walls and curving counters.

Although still a relatively new brand, they’ve already hit an Instagram following over 13k. A recent content marketing initiative was launched in line with their Melbourne store launch which is a curated series of talks from local travel experts.

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They’ve also partnered with Supreme Coffee, who was one of Melbourne’s earliest specialty coffee roasters, on a recent Father’s Day campaign. This is a surefire way to generate some buzz around a higher sales period and reach new audiences. Or, they might just really love Supreme coffee.

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If you’re familiar with Away suitcases, you may notice some similarities. And if you type in ‘away luggage’ in search, you can count on seeing a July ad. Away travel is one of July’s main paid competitors. Which is why they are bidding on ‘away luggage’ as a search term along with a number of other travel-related keywords such as ‘carry on suitcase’ and ‘best carry on luggage.’

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Currently, they aren’t running any image ads, just text ads which is interesting. But if we look at their advertising stack on BuiltWith, they are using LinkedIn Ads, Snap Pixel, Facebook Custom Audiences and, Google Remarketing to learn more about their audiences. As well as Skimlinks and Tapad to deliver better cross-device content experiences.

Final thoughts

These examples have demonstrated how powerful the direct-to-consumer model can be.

The nature of the online environment and technological innovations has enabled brands to scale and build brand awareness a lot quicker than if you were to build a physical shopfront.

To achieve this high growth you need to start with an exceptional product. Then, it’s about intimately understanding your audience and using their feedback to continually improve. That alone can be enough of an advantage to set up and serve your business well for many years.

However, what we’ve also seen in this article is the importance of building a solid brand, genuine relationships with your customers and creating an exceptional online and offline experience.

When you think about it, the brand examples in this article have only been around for a few years, yet they have been able to achieve considerable growth in very short time frames. That’s the power of the DTC and DNVB business model.

We look forward to seeing more startups set the precedent for Australian retail!

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