It’s no secret that direct-to-consumer (or DTC) brands have been at the forefront of changing the way consumers shop. So it’s no surprise that many of them not only survived the pandemic, but actually thrived. With agile business models and digital strategies, they were well positioned to navigate a world of closed brick-and-mortar retail.
This was the theme of the “New Frontier for Growth" session at the 2021 Retail Innovation Summit hosted by the Wharton School’s Baker Retailing Center and XRC Labs.
Moderated by Barbara Kahn, Professor of Marketing at the Wharton School, the panel featured Travis Boyce, Head of Global Retail Operations at sustainable footwear brand Allbirds and Coral Chung, Founder and CEO of luxury leather handbag company Senreve. Joining them was Tony Shan, Head of Alibaba’s Tmall Global for the Americas.
Like most DTC brands, Allbirds and Senreve have resisted selling on well-known e-commerce sites. Yet both chose to access the China consumer market with Alibaba’s B2C platforms Tmall and Tmall Global. The reason comes down to what Alibaba’s Shan noted: “We are a marketplace, not a retailer. We only do well if brands do well.” The best way to think of Tmall and Tmall Global, Shan said, is a digital mall where consumers can “go” to engage with brands directly.
Chung of Senreve noted that Tmall Global provides exactly the kind of consumer she is looking for – those looking for premium and luxury products, in contrast to those looking for mass-market items on online shopping platforms in the West.
Through Tmall Global, Senreve was also able to access consumer demographics and analytics, which allowed her to learn more about Senreve’s consumers in China and to do product localization. Chung learned her average Chinese customer is 10 years younger than her US counterpart. And since customer engagement and satisfaction is very important in the China market, Senreve found the ratings and reviews particularly useful, prompting her to upgrade her brand’s packaging.
“Having data is important for DTC decision making,” said Shan of Tmall Global. “We share sales info, traffic, CRM management system and macro trends for brands who have flagship stores on our platforms.” Chung said that being able to have that data as well as transparency on competitive benchmarking has been useful for growing her brand.
For Allbirds, the journey to China began when they noticed strong upticks of Chinese consumers looking at their website, as well as Chinese tourists buying significant amounts of product from their brick-and-mortar stores to bring home to their families. Realizing that there was a demand for sustainable yet stylish and comfortable shoes on the other side of the world, they moved to enter the China market right away.
Boyce noted that not only did they invest in physical retail and establish four owned-and-operated stores, they also partnered with Tmall to help build its visibility, engage with consumers and amplify its storytelling around its brand’s mission of sustainability.