What began in 1946 as a small startup in the Duncan family’s garage is today a thriving international business with the same close-knit, family-owned vibes the company was originally founded on. That’s 72 years of success.
How have they done it? By remaining committed to adaptability and evolving with the changes happening within the industry.
Beginning as a manufacturer of ceramics, the company later expanded to various creative lifestyle products. More recently, they also expanded to direct-to-consumer (DTC) brands. Duncan Enterprises now owns 10 brands including two DTC businesses, SummerHawk Ranch and Tattoo Junkee Cosmetics—both of which are digital partners of GYK Antler.
SummerHawk Ranch is an urban farming lifestyle brand that produces everything from chicken coops to beehives and Tattoo Junkee is an edgy line of lip paints and beauty products. Although both of these brands and their audiences are seemingly polar opposites, they have more in common than one might think. As part of its innovative business approach, Duncan was one of the early companies to take note of consumer behavior shifting to the digital realm with the rise of online shopping. As such, the company has been exploring the DTC model for the past 10-15 years.
While this is an increasingly desirable approach, it has proven challenging for many brands. So, we connected with Hawk Duncan (New Channel Development Manager) and Lance Christensen (Associate Brand Manager) at Duncan Enterprises to talk about their experiences in the DTC space.
Here are four key insights from our discussion with them:
One of the main attractions of going the DTC route is that it alleviates concentration risk. If a bulk of your sales are made through a retail partner, and that retail partner decides to make a change, it could be catastrophic for your business. By having a viable DTC program running, you will be better positioned to handle any unexpected or immediate moves by outside partners.
One of the temptations with DTC is the idea of retaining the margin you lose to the middle man. Theoretically, this makes sense, but in practice, it’s less so the case. The reality is that if you go all in on DTC, ad dollars still need to be allocated to drive website traffic. The potential savings of removing the middle man are lost. Furthermore, having the physical product in a retail space can serve as a billboard for your brand. In fact, Hawk noted that one of their brands experienced a decline in web traffic after a product was removed from a major retail partner.
For example, consider SummerHawk chicken coops. A chicken coop is a significant lifestyle purchase for anyone getting into urban or backyard farming. As a consumer it’s nice to be able to view the product in person at a retail store. Additionally, coops are packaged in large, heavy boxes. So, it can be difficult for the majority of consumers to transport home. Therefore, by showcasing the product in stores while having the option to purchase online with direct-to-your-door delivery, the customer is provided with both benefits.
By having a DTC program in place, the brand is provided the significant advantage of hearing from its consumer base directly—the successes and the frustrations. This is an invaluable benefit to help inform product improvements. When a customer returns an item from a retail location, it’s near-impossible to know why the customer was dissatisfied with the product. On the contrary, DTC brands have the opportunity to gather real-time data and have a direct line of communication with the customer.
This benefit allows a brand to gather information on who the customer truly is. Hawk and Lance referenced that while most DTC brands create a predisposed idea of who their consumer is before going to market, it’s not always accurate. For example, after gathering learnings from early ad placements for Tattoo Junkee, they learned that the customers who engaged most with the brand were much different from the consumer originally expected. From there, they were able to adjust creative accordingly to better connect with their consumer base and current target audience.
Sure, this sounds a bit self-serving coming from an advertising agency, but Hawk and Lance cited their partnership with our digital team as an invaluable source of guidance. DTC can be a complicated game, and it’s vital to know all the mechanisms available and to be constantly pulling all the levers to make it work. It’s a full team activity that cannot be treated passively. Additionally, when dealing with all the other aspects of running a brand, it can be easy to get lost in the weeds. Partnering with an external agency that brings strategic and creative resources to the table can help to find areas of improvement. Ultimately, a solid agency partner will be able to arm a brand marketing team with the necessary data and information to show return on the investment.