The direct-to-consumer (DTC) trend is shaping the face of retail, leading to significant acquisitions such as Dollar Shave Club and Harry’s by Edgewell Personal Care and Unilever, respectively. Bonobos, a DTC brand, was also sold for over $310 million, showcasing the potential profitability of such online brands.
Yet, DTC businesses face several challenges, including soaring advertising costs, overcrowded platforms, and disruptions in consumer behavior due to the COVID-19 pandemic. A push towards sustainable practices and regulatory scrutiny over user data privacy also add to their growing list of challenges.
Small lifestyle brand ‘August’ found success through the video-centric social media platform, TikTok, gaining 2 million followers in just six months since its launch in 2021. Their curated content, covering various niches, from fitness to sustainable living, has since attacted a total of 4.1 million followers.
TikTok provides a beneficial platform for businesses, thanks to its impressive video editing capabilities and its ‘For You’ page. This offering is especially attractive for small-to-mid sized businesses who struggle with high advertising costs. Unlike Instagram, which primarily caters to existing followers, TikTok algorithm allows businesses to reach new and wider audiences with ease.
Meanwhile, TikTok’s high engagement rates increase brand visibility and its young, global user base presents a valuable demographic for companies. This makes TikTok a powerful marketing tool that businesses, particularly small-and-medium-sized ones, can’t ignore.
August’s transition from a DTC to a nationwide retail approach underscores this point. TikTok’s platform boosted the brand’s visibility, translating to increased web traffic and organic search interest, making it an attractive venture for investors. In an era of sky-high advertising costs and a landscape dominated by Facebook and Instagram, TikTok’s importance for smaller businesses is undeniably crucial.
