If your 27-year-old colleague can’t stop raving about how cute those AYR dark-wash skinny jeans look with her suede M.Gemi flats as she tosses a 16-oz. bottle of Dirty Lemon’s ginseng drink into her Dagne Dover Dakota backpack—which she’s quick to point out is “dune” and not “dusty rose”—it’s because she’s part of the new breed of consumer who views consumption as the best way of telling the world who she is and what she’s about.
This so-called direct brand consumer is younger than people who prefer legacy brands (i.e., incumbent consumers) and takes home fatter paychecks, too, with 31 percent earning household income higher than $75,000 versus the 63 percent of incumbents making below $50,000, according to the Interactive Advertising Bureau’s (IAB) Disrupting Brand Preference report.
With a little more money at their disposal, direct brand consumers buy into the direct-to-consumer (DTC) brands like Combatant Gentleman, Away and Joybird. They’re looking to these brands either because they inspire passion, reflect their unique style (36 percent versus 25 percent) and offer a sense of discovery (34 percent versus 19 percent) and newness (33 percent versus 26 percent). That stands in direct contrast to incumbent shoppers who’re primarily interested in utilitarian brands and products that help them solve problems (42 percent versus 37 percent) or meet some ho-hum quotidian need.
IAB worked with millennial and Gen Z expert Cassandra in May to poll 3,000 consumers evenly split across the 13-34, 35-50 and 50-and-up age groups. What they found confirmed the well-trodden trope of younger consumers more engaged with brands at just about every stage of their purchase journey.
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It’s little surprise then that direct brand consumers show great enthusiasm for digging up what they can find on new brands before they decide to purchase. These younger smartphone addicts use every means at their disposal and are more likely to engage in any research activities relative to incumbent shoppers, IAB found in the report sponsored by Google, PebblePost, Pinterest and Spotify.
Forty-four percent apiece will dial up a YouTube video to see what other people have said about a brand and check out social media posts about the company. Shoppers in the direct brand consumer cohort are 83 percent more likely than incumbents to stop by a store or pop-up prior to purchasing. They’re also close to 2.5 times more likely to see what an influencer or celebrity has to say, and 61 percent more likely to watch a brand’s own video before they’re ready to spend on that business, the report indicated.
The truth about influencers
Influencers, it turns out, still wield the greatest sway with consumers during the exploration phase of the path to purchase.
In nearly equal numbers, direct brand consumers like to find out what a professional influencer has said about a brand (33 percent) and investigate which personalities and influencers a DTC has partnered with (32 percent), which offers additional clues into the company’s stance and values. Just 17 percent claim they’ve actually bought something as a direct result of what an influencer said, confirming a recent report documenting the waning influence of influencers.
However, it has become the de facto expectation that brands will forge some sort of tie-up with a celebrity or professional influencer, according to 42 percent of direct brand consumers. Not only do 38 percent of these shoppers say a famous personality affects how they perceive a brand, but 39 percent also cite people like Kylie Jenner and Selena Gomez as a “reliable way I find out about new brands.”
Direct brand consumers claim celebs and social influencers lend an air of authenticity to DTC brands—helpful in convincing prospective customers to take a calculated risk on an otherwise unknown business.
It turns out, however, that influencers can be anyone, in a sense, and the lucky few in your inner circle ultimately wield more power over what you decide to purchase than the polished people promoting products on your Instagram feed. Asked what compelled them to purchase from a DTC brand, more than 60 percent of direct brand consumers said suggestions from family and friends, and just less than 60 percent pointed to that tried-and-true staple of online commerce: the all-powerful (but sometimes disingenuous) customer review.
Endorsements from social media influencers came in fourth behind online community discussions, further signaling the outsize role of the “everyman” versus the paid shill.
Extra, extra—read all about it
Direct brand consumers don’t just shop—they want to yap your ear off about it, too.
The report said 71 percent like sharing their brand experiences online, more than twice the 31 percent of incumbent shoppers who expressed a similar sentiment. As DTC brands highlight their story and values and showcase what sets them apart, engaged consumers are clinging to that—and further spreading the word.
Their reasons for talking about a brand online differ somewhat but tend to be some variation on the themes of being seen as cool and connected. For starters, more than half (52 percent) like telling other social media denizens about the cool things they wear, buy and use, and more than 40 percent agreed that posting about a brand helps them “lead the conversation,” according to the report. It seems this is the new form of social credit and currency among younger “in the know” consumers.
Though the most common form of social sharing is reposting a brand’s original post (32 percent), 28 percent share user-generated content like a photo, and video is the preferred media (15 percent) for consumers who like the rich experience of filming something, like an unboxing moment or similar.
But where do consumers go when they want to talk about brands—good, bad and otherwise? Facebook reigns supreme for brand discussion; 66 percent of direct brand consumers and 77 percent of incumbent shoppers say the social media giant is their go-to. Instagram shows its clout in the No. 2 position (42 percent versus 33 percent) while Snapchat edged out Amazon for the No. 5 spot with 20 percent confidence from people who prefer disruptor brands.
In some ways, direct brand consumers are no different than their opposites: free shipping (49 percent) and low prices (46 percent) will inevitably entice them to purchase. But other motivators can pry open their wallets, too. These shoppers are drawn to the “entertainment” and “excitement” attributes of DTCs as 21 percent cite a product’s innovative qualities and the brand’s “great online content” as reasons that prompted them to buy.
And the cool factor crops up again. Seventeen percent are swayed by a product’s “cool packaging” and another 15 percent are motivated when something’s available for just a limited time. Slightly more (18 percent) cite the personalized nature of the product or content as a reason for purchasing.
Direct brand consumers’ views on loyalty contrast significantly with their incumbent elders, the IAB data showed.
Where 18 percent of incumbents agreed with the idea that you don’t have to purchase a brand to be considered brand loyal, you “only have to love it,” direct brand consumers were more likely to say they subscribed to a brand (35 percent), followed that business on a social platform and told their network about that company (36 percent apiece).
These, IAB deduced, are the meaningful hallmarks of the new brand loyalty among younger, connected consumers. Engagement is what matters—not passive affinity.
And though this passion and loyalty overindexes among younger direct brand consumers, they’re not exclusive to any age group. IAB identified what it calls the Super Influencer, or the individual who deeply identifies with the brand-related content they’re posting on every social platform and who sees sharing this brand-centric info as a way to develop her own personal brand. IAB classifies 30 percent of direct brand consumers, and 18.5 percent of the total polling base as fitting into the Super Influencer category.
So what makes them unique? Their relentless quest to discover the latest new thing knows no bounds, IAB said, and what’s more, “they are deliberate and strategic in how, where and what they share about brands.”
Community is central to the success of direct brands and “those disrupting the disruptors, said IAB CEO Randall Rothenberg. “Today’s consumer expects access and input into the companies they support,” he added. “This deeper relationship not only shows up in loyalty, but actually perpetuates two-way value for both consumer and brand—in the creation of self-as-a brand and building brand awareness through influence.”
And it’s tempting to assume that all the time millennials and Gen Z spend tapping away at their phones and sharing their thoughts online is “frivolous,” said Sue Hogan, who’s the SVP of research and measurement for IAB—but that would be a mistake.
“The differences between disruptor brand consumers and incumbent-only shoppers are stark,” she continued. “For disruptor brand consumers, social behaviors are calculated and deliberate, feeding their need for self-expression.”