There’s no question that growth in direct-to-consumer business has exploded over the last decade. Many digitally native brands have disrupted their industries, demonstrating the power that comes with owning your customers’ experience. DTC e-commerce sales have tripled in the past six years, and analysts predict sales will reach $150–$200 billion in the next several years. It’s clear the DTC trend has hit critical mass, and everyone wants a piece of the pie—including the supplement industry.
But we’ve reached a turning point. The early success of digitally native brands was duly noted by larger legacy brands. Although digitally native brands are still enjoying double-digit growth, the days of their domination of DTC e-commerce may be coming to an end.
What does this mean for supplement brands trying to succeed through the DTC channel? Like their counterparts in other industries, there are legacy supplement brands investing heavily in DTC, and there are digitally native supplement brands that have disrupted the older brick-and-mortar paradigm that grew the supplement industry. Pure Branding’s proprietary Supplement Consumer PureSegmentation™ Research quantifies that 7 percent of all supplement users buy directly from a brand online. The share of supplement sales driven by e-commerce has almost doubled since the start of COVID-19.
In the last five years, brands like Ritual, Persona, and Elysium have benefited greatly from being first disruptors. In fact, Persona Nutrition, whose brand strategy was spearheaded in 2018 by Pure Branding, was so successful in attracting the new DTC shopper that it was quickly acquired by the Swiss-based multinational Nestlé Health Science. In addition to Persona, the Pure Branding team has helped several emerging digital-first supplement brands as well as legacy brands that want to foray into DTC. With the ubiquity of Amazon, new privacy-driven restraints on advertising, and the explosion of competing DTC brands, it is increasingly challenging for new entrepreneurs to break through the noise and find cost-effective ways to launch their brands.
That said, we have synthesized and identified the six costs of entry for supplement brands that want to compete in the DTC channel.
1. Be the hero of one issue—have a singular mission.
A successful digitally native DTC brand focuses its attention and defines itself around one clear goal and mission. The examples outside the supplement industry are well-known (e.g., Warby Parker, Dollar Shave Club, Casper), especially for their initial laser focus on one issue. Early successes in the supplement DTC market include Ritual and Elysium, and both of these brands had clarity of purpose. Ritual was all about helping women of all ages build a healthy foundation for their nutrition. Elysium was about healthy aging. Although these topics—women’s health and healthy aging—are broad, both brands claimed expertise and took bold stands in their chosen arenas. It is also important to note these brands started with a single product offering, which, combined with a singular focus, made their value proposition indisputable.
One of our clients, NION Health, recently entered the electrolyte market, which is mature and crowded. Scientifically speaking, electrolytes can deliver positive and negative ions. Although both charges have health benefits, none of the existing electrolyte brands are able to safely deliver meaningful amounts of negative ions. But NION can. Our challenge was that most electrolyte shoppers aren’t aware of this negative deficit. This became NION’s singular mission: communicating the essential value of negative ions to its target audience of intermittent fasters as a way to improve vitality and healthy aging. This brand can fully own this niche positioning in the fast-growing electrolyte market.
2. Sell a lifestyle, not a product.
The promise of many successful DTC brands is inclusion in a community of like-minded people and rallying around a shared set of beliefs, common cause, or chosen lifestyle. One of the findings from our PureSegmentation research is that the two customer segments most likely to engage with DTC brands are also the most attracted to brands that inspire and empower them, brands that are passionate about health and well-being in the world.
We consulted in the early stages with De Lune, a supplement brand whose mission is to end menstrual suffering and de-catastrophize the period. It is what we call a “community brand” in that it not only offers products but also rallies people around a cause to create change, thereby nurturing and growing an aligned community. For example, the brand advocates for menstrual leave in the workplace, supporting the idea of a policy that adapts or reduces time spent at work for people who experience difficult menstrual periods. De Lune gained investor attention through its lifestyle approach and has grown a loyal customer base in a supplement category that offers a myriad of available options from more established brands.
3. Create a delightful and hassle-free shopping experience.
The cost of entry for any DTC brand is that the shopping experience has to be an easy and enjoyable process. Our PureSegmentation™ research validates this. We asked, “What is most important to you when you think about a personalized herbal and/or dietary supplement brand?” One of the top choices by those who actually engage in DTC supplement personalization was making the experience of nutritional health as much fun as possible. With 87 percent of US mobile devices used for shopping, that begins with an initial mobile introduction of the brand and continues to a seamless delivery of the product to the household.
Like it or not, Amazon is every DTC brand’s biggest competitor when it comes to ordering and delivery. People have come to expect free delivery and an easy, intuitive checkout experience. Therefore, recreating a frictionless experience is your cost of entry. Where you can outperform Amazon is in the final delivery, when they unbox the package. Seed, the synbiotic brand, has an elegant welcome kit complete with a refillable glass jar and glass travel vial housed in a custom-built box. You feel that every detail has been thought through. Delightful.
4. Boldness wins—break barriers, break the rules, reinvent the approach.
Successful DTC brands often take a new approach that offers a fresh perspective. Ritual simplified and made transparent the multivitamin process for women. Persona Nutrition brought personalized vitamin packs online.
Fatty15, the fatty acid supplement, challenges the conventional wisdom about consuming fats. It addresses head-on the fact that society has spent a generation avoiding fat. They promote the bold claim that the answer to better health and to slowing age-related breakdown in our cells has a lot to do with fatty acids like C15:0 (i.e., the pure, fatty acid powder in Fatty15). The brand also conducts groundbreaking research with the Navy’s pod of dolphins, which is linked to their discovery of C15:0. Fatty15 has a bold claim backed by a compelling and unusual story.
5. Be real—let your distinct personality show.
Brand voice is more important than ever. DTC brands need to search for conversations that will grab attention, find new ways to broadcast their values, and be quick to stand up for what’s important.
There is a common belief that people’s attention spans have become short, and so many brands opt for quick, simple methods to tell their story. Although short-form content can drive engagement, it does not create depth. We often tell our clients that people don’t read or watch what is irrelevant to them, but they will still take the time to consume what is of interest and importance to them. It is the job of the DTC brand to create meaningful content.
One example of a company that creates great content is Seed. Its content is a mix of beautiful, engaging visuals; short, focused copy; and easy access to longer-form content that goes into greater depth. The brand is not afraid to send a monthly email newsletter that spans the height of ten phone screens with compelling written content.
Brand voice was a critical part of the launch of NION Health. NION is competing with some heavyweights, so trying to be louder would be a losing tactic. We chose a voice that is grounded, calm, and evocative. The brand evokes a time when people were closely connected to the earth and makes the case for how our current separation from nature needs mending. Although the brand was founded by a scientist and validated by clinical research, it does not lead with the science. NION connects the power of their mineral formulation with the power of the natural world.
6. Build a meaningful, direct relationship with your customer.
Digitally native DTC brands need to lean into their greatest source for potential growth: their direct relationship with their customers. The sky should be the limit when it comes to leveraging and maximizing this relationship. From personalized offerings and relevant product samples to loyalty rewards programs, building a dialogue with customers through relevant touchpoints and informative content creates fertile ground for long-term brand loyalty.
The details really matter here. For example, designing a questionnaire is an opportunity for a brand to show thoughtfulness and comprehensiveness and to demonstrate the many factors considered while populating a customized recommendation.
PYM, a new brand of science-supported nutrients for mental well-being, offers a great personalization quiz. Throughout, as you offer personal details, it responds with engaging information—as though it is conversing with and listening to you in real time. The initial relationship is not purely transactional. It nurtures and educates beyond just selling the product.
It is also important to remember that long-term relationships are not built on telling the same simple story again and again.
One of our clients, Best Nest Wellness, competes in the competitive prenatal market—guiding families from fertility through pregnancy and postpartum. To create meaningful content for first-time families who wanted education, it built a collective of independent health care professionals who specialize in holistic perinatal care (e.g., nurse midwives, doulas, naturopathic doctors, chiropractors, and lactation consultants). These professionals regularly write articles and offer advice that demonstrate their expertise. As a result, Best Nest Wellness establishes trust and credibility by providing free, high-quality advice from credentialed experts.
These six branding costs of entry for DTC supplement brands are not easy to overcome and implement. But the pay-off is the opportunity to have an authentic, direct relationship with your customer. Access to first-party data lets you assess what is working and what is not, continuously measuring and optimizing your user experience, product offering, brand messaging, retention efforts, and campaign strategy.
This requires a comprehensive DTC brand and marketing strategy that, when done well, ensures enthusiasm, trust, and brand success.