Friday, November 17

The 5 things in DTC you need to know today

November 17, 2023

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🚨 In today’s newsletter 🚨

  • Why DTC brands are back on Kickstarter

  • How Simple Modern hit 1 million Shopify orders

  • The top reasons for cart abandonment

Let’s get into it👇

#1 - 👥 DTC brands turn back to crowdfunding

📰 TL;DR - Venture capital has seriously dried up for DTC brands, so what’s a founder to do? Well, crowdfunding has come back in vogue. This piece looks at why DTC brands are going back to Kickstarter and such, including The Sill, Panic Panties, Reel Paper, SuperMush, and HoldOn. Crowdfunding is unique in that while you’re raising funds, you’re also attracting your first customers and building loyalty before even launching. Panic Panties, for example, was able to reach its goal of $10,000 within 24 hours, and then double that by the end. However, this piece also cautions that it’s a bad look to launch a crowdfunding campaign if you’ve taken VC funding in the past.

💡 Insight - I think there’s a very scrappy appeal to crowdfunding. Those who back you are giving you a major vote of confidence and may go on to become your biggest fans, customers, and ambassadors. To do this successfully, I think it’s important to make it personal. Really dig into sharing your brand and founders’ story to create that emotional connection with backers. Also, get creative with the perks! Sure, offer the product, but Panic Panties’ campaign also offered a dating profile consultation or a custom Spotify playlist. These perks are a chance to show off your brand’s ethos and unique voice. Some brands even offer equity as a perk. If you’re going to crowdfund, you can’t be shy — go all in.

#2 - 🥤 How Simple Modern tackled e-comm challenges

📰 TL;DR - Simple Modern is a brand that sells water tumblers and travel mugs and they just surpassed one million Shopify orders. To commemorate the achievement, co-founder Bryan Porter posted a long tweet about how they started on Amazon but found success in DTC — and without spending a ton on ads. The big challenge was that DTC needs high margins for ad spend, but Amazon is a low-margin environment. They worked through it with three breakthroughs: limited edition drops, bundling, and personalization. Read the whole tweet for details.

💡 Insight - Bryan offers some really great insights here, including why each of these strategies worked. And they all happen to be strategies that are often recommended to DTC brands, so it’s wonderful to see them in action and being used together. I also want to highlight some of Bryan’s final words — that DTC is a long game. “In the last 12 months we've sold as much as the previous 7 years combined. Momentum is a real thing as the customer base and subscribers grow. We're going to continue to run and improve this playbook.” Build for the future, try new strategies, and build the momentum that will carry you forward.

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#3 - 🎄 BFCM is just the start

📰 TL;DR - I know we’re all hyped up for Black Friday and Cyber Monday, but are you also thinking about what happens after? This article looks at the four Ds of shopper mindsets throughout the year, and December is all about Determination. Shoppers are determined to finish their holiday shopping. Like, did you know that 46% of US consumer holiday spending in 2022 took place between Cyber Monday and Christmas Eve? As well, US shoppers still had 50% of their holiday shopping left to do after BFCM. And 50% of shoppers enjoy shopping shortly after Christmas.

💡 Insight - I know — BFCM hasn’t even happened yet, but you’ve also got to be thinking of what comes after. BFCM is the traditional start to holiday shopping, but it’s nowhere near the end of it. It’s a great time to retarget BFCM shoppers now that you have their info and continue suggesting gift purchases as well as your loyalty program perks. It’s also a time when quick shipping becomes paramount, so if you can offer that, be loud about it! I always appreciate a banner that says something like “order by x date to receive your order by Christmas Eve.”

#4 - 🛠️ Things worth checking out

👶🏼 GENERATIONS - This piece looks at the unique approach required to appeal to Gen Z and Gen Alpha.

😎 SNAP - Amazon struck a deal with Snap to let users buy products straight from ads in the app, similar to a recent deal with Meta.

📊 GA4 - Here’s a handy guide about looking at user acquisition vs. sessions in Google Analytics.

👟 ON - Have a look at how On is making an absolutely killing with its DTC business.

🤖 META - Meta previewed some new AI video and image tools that could be very useful for brands.

#5 - 🛒 Why shoppers abandon carts

📰 TL;DR - This survey looked at the top reasons why shoppers abandon carts online and the top reason shouldn’t surprise you: shipping costs. That’s followed closely by wanting to find a better deal somewhere else. Other reasons include waiting for a sale, getting distracted, and deciding they want to see the product in person (although that was very low). Interestingly, men are more concerned about price comparison, while women are more concerned about shipping fees. Also, the vast majority don’t worry about privacy in this scenario.

💡 Insight - If you know why people abandon carts, you can take steps to mitigate it. Low shipping costs will always be a winning conversion strategy and should be a top priority always. I think this is especially true for cross-border commerce when shipping rates can be a nasty surprise. I’ll also note I’ve seen surveys like this before, and shipping costs is always the top reason.

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