Friday, November 3

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🚨 In today’s newsletter 🚨

• 2023 VC funding for DTC brands is pretty dismal

• A new Etsy competitor has emerged

• Why these DTC brands love direct mail

Let’s get into it👇

#1 - 📉 E-commerce VC funding is bleak

📰 TL;DR - In 2012, venture capital was all over DTC brands, with more than $5 billion going to companies at the intersection of e-commerce and consumer products. However, 2023 has been pretty rough. So far, U.S. investors put just over $130 million into this category. That’s a 97% decline from 2021. The chart in this article paints a pretty stark image. Why though? Well, the first thing to note is that the 2021 investments largely went to e-commerce aggregators. Consumer products have also simply fallen out of favor. It didn’t help that brands like Allbirds and Rent the Runway had a poor showing in public markets.

💡 Insight - If you tried to get funding this year, this probably isn’t news to you. The year kicked off with speculation that funding would be down as investors sought companies that had a clear and quick path to profitability amid an uncertain economy. The brands that are getting funding tend to be those that aren’t pure DTC and have expanded to some sort of retail. So if you’re looking for funding, you may get more attention if retail is part of your strategy.

➡️ You can read the article here...

#2 - 🎨 Michaels launches Etsy competitor

📰 TL;DR - Michaels has officially launched MakerPlace, an e-commerce marketplace that is setting itself up to be a direct competitor with Etsy. Like Etsy, independent artisans can sell their goods, but what’s different is they can also host online crafting classes. Also different is there are no product listing fees, unlike Etsy. Artisans can also earn affiliate commissions by sharing how-tos with product listings from Michaels. There are two membership plans available, with the basic one being free. A paid tier will earn you a higher commission and unlimited classes.

💡 Insight - You can see the full breakdown of the membership fees here. They clearly want to be more attractive to artisans than Etsy. MakerPlace’s transaction fee is 3% plus $0.02, whereas Etsy’s fee is 6.5% plus the listing fee. That’s enticing! The option to host classes and earn commissions is also brilliant. Given how many Etsy sellers have been rebelling, I can easily see a lot of them making the switch. The issue of course is that MakerPlace is going to have to earn its status as a place where people go to shop — Etsy has brand recognition going for it. I also hope MakerPlace will be able to address the inevitable dropshippers and AliExpress resellers.

➡️ You can read the article here...

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#3 - 💌 DTC brands turn to direct mail

📰 TL;DR - This piece looks at DTC brands that are experimenting beyond digital-only advertising, in this case with direct mail marketing. According to one survey, 44% of DTC marketers said they increased their direct mail budget in 2022, mainly to “escape the rising [customer acquisition] costs of digital channels.” Which of course is all related to the pesky Apple update. The brands mentioned here include ThirdLove, Chomps, and Apothékary. They say direct mail is. way to stand out in DTC and, additionally, is pretty cost-effective.

💡 Insight - There was another recent story showing that DTC brands have also been increasingly investing in OOH ads like mobile billboards. Basically, as digital advertising gets costly, old-school methods seem to be coming back into vogue. One person quoted that consumers see IRL mail as more valuable and thoughtful and cuts through the very crowded digital marketing space. Might be worth a try if you’re sick of the digital marketing game.

➡️ You can read the article here...

#4 - 🛠️ Things worth checking out

🇪🇺 EU - These charts show some e-commerce trends in Europe.

🧶 ETSY - Etsy is pushing sellers to offer discounts earlier this year.

😎 INFLUENCERS - There’s a new term in influencer marketing you should know: allowlisting.

💸 AMAZON - Amazon is introducing a BNPL option for Business shoppers.

👕 IRL - DTC menswear brand True Classic is going to open three new stores.

#5 - 🍾 Consumers want DTC booze

📰 TL;DR - Sovos Shipcompliant and the American Craft Spirits Association have released a DTC spirits report for 2023, and it has some interesting stats. First of all, 87% of regular craft spirit drinkers said they want to be able to purchase products via DTC shipping — up from 80% in 2022. As well, 81% of those who said they were likely to purchase said they’d do it once a month or more, up from 79% last year. The problem is that many states simply don’t allow this. Eight states and Washington DC allow for interstate spirits shipping, while 47 states and DC allow the same for wine.

💡 Insight - The report found that 82% of craft spirit drinkers want US laws to change, and I’m sure many in DTC businesses would like that, too. Spirits have largely been absent as DTC businesses due to these rules, though this group speculates that if a large state like Texas or California changed the laws then others would follow.

➡️ You can read the article here...