Perspectives

2021 Outlook: Three Questions on DTC & CPG

Ed.’s note: Our agency leaders recently took a beat to ponder their beats. The following is a look back on the year that was in CPG and DTC, and thoughts on what lies ahead for these industries in 2021.

What has this past, unprecedented year taught you as a communications professional most about the CPG/DTC space? 

“Unprecedented,” while fitting, might not do 2020 justice. The global health crisis continues to inundate our front lines and everyday lives, but we can’t forget about the most catastrophic wildfire season to-date; the weeks of marching and protests opposing systemic racism and police brutality; a historic presidential election; a stock market crash; a dramatic Royal family exit; and did someone say “murder hornets?” It’s no wonder brands of all shapes and sizes are questioning the role they will play in consumer’s lives moving forward.

Over the past decade, retail has witnessed a significant transfer of power – the shopping experience more and more tailored to consumers’ conveniences rather than those of the retailers. The biggest takeaway from 2020, specifically, is a further shift towards e-commerce — consumers have embraced online shopping and vendors have responded through the launch of new tech, apps and ways of meeting ever-changing needs. The words “contactless” and “frictionless” have become a part of our everyday vocabulary and companies must continue to adapt.  

The nature of DTC brands, however, meant they were already quite agile and able to adjust to changing circumstances — a winning combo when no one quite knows what will come next (but we really hope it’s better than 2020).

What do you believe has separated the struggling brands from the more resilient ones during this past year and why?

Three things: 

  • Authenticity: Brands that articulated and lived their values out loud in 2020 came out on top, and consumers will remain loyal to them because they have confirmed an alignment of beliefs. Millennial and Gen-Z shoppers, in particular, have a keen eye for inauthenticity and these audiences are (naturally) crucial to win over.
  • Trust: Perhaps for the first time, consumers have seen organizations and brands put the well-being of their customers and employees before profit.
  • Transparency: Because DTC brands in particular often operate without third parties, they must get everything perfect: marketing, shipping, customer experience, website functionality. Customers won’t hesitate to go elsewhere if they experience even the slightest issue, so it was incredibly important this year for customer communication to be clear, transparent and solution-oriented.

What will be the biggest communication opportunities for CPG/DTC brands in 2021 and why?

As a result of COVID-19, we’ve already seen (some drastic) changes in consumer behavior: a shift from public to private ways of living; adjustments in spending due to an exacerbated wealth gap; and a greater emphasis on equality, inclusion and diversity. It’s critical that CPG and DTC brands develop omni-channel strategies rooted in the needs of tomorrow’s consumer, meeting them how, where and when they are most open to forming engaging brand relationships. For leadership, that means paying attention to these changing trends, values, attitudes and behaviors and adjusting accordingly (made all the more difficult in a potential cookie-less 2022).

Brands that will win in 2021 will of course have a great product, but also a clear mission — providing value above and beyond what they sell.

Connect with Lauren on LinkedIn.

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