DTC gold rush: hidden opportunities & juicy brand news!

Everyone wants to be a DTC brand these days… and in this edition, we explain why. We also cover ignored industries in the DTC field, Snapchat’s latest ad tools and the latest news on your favorite DTC brands. 

Quickfire DTC brand news!

1. Brightland's viral Pizza Oil, which sparked controversy over its packaging resembling rival Graza's squeeze bottle design, will be available at Whole Foods stores nationwide starting in September.

2. Flamingo Estate, an upscale DTC home goods brand, has a pop-up called "The Suite Shop" at JW Marriott Essex House in New York until June 16, featuring travel-friendly products.

3. Peloton, the once-booming fitness company, announced plans to refinance its debt amid ongoing financial woes, following recent staff layoffs and the CEO's departure.

4. Influencer Emma Chamberlain's DTC coffee brand Chamberlain Coffee raised $4.6 million in new funding and plans to raise a total of $7 million.

^{A special note from our sponsor Mediaocean}

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Even leading labels prioritize DTC Sales

Levi’s, like many major brands, is increasingly focusing on DTC sales to improve profitability and control. In 2023, Levi’s direct sales grew 8% and now represent 48% of its business, and they’re not alone with brands like Ralph Lauren and Calvin Klein doing the same to enhance their DTC channels due to challenges in multi-brand retail.

Multi-brand retailers and department stores are facing significant difficulties, leading brands to reduce their presence in these channels. Ralph Lauren has exited 20 department stores, and Macy’s plans to close 150 stores due to declining sales and profitability pressures - and that’s just the tip of the iceberg!

Despite the benefits of DTC, brands still value wholesale partnerships. Nike’s retail partnerships today are constructed to connect its wholesale and DTC businesses. When the company partnered with Zalando last October, for example, it let shoppers link their Nike accounts to the multi-brand e-tailer to access a wider range of exclusive goods.

Effective DTC strategies require strong marketing, product differentiation, and meeting customer demand to succeed.

An overview of Snapchat’s evolving ad tools

Snapchat has redesigned its ad formats with the intention to unify promotions and maximize intentionality behind user actions. 

This evolution includes enhanced full-screen displays and AR ad options, such as the expanded "Total Takeover" product suite and a new high-impact AR Lens Carousel takeover.

The evolution also sees a heavy focus on small and medium businesses (SMBs) which led to an 85% increase in SMB advertisers year-over-year. 

They also introduced new bidding capabilities for mobile gaming advertisers, a Value Optimization offering, and the “7/0 delivery optimization” for click-through conversions, resulting in lower costs and higher return on ad spend (ROAS).

Enhanced data integration and performance tracking also plays  an important role in the evolution. Snap has partnered with CRM and data integration partners like Snowflake and LiveRamp to better track ad performance and optimize lead generation. They also introduced a new Landing Page View optimization goal and improved machine learning models, achieving over 60% lower costs for some advertisers compared to traditional models.

The DTC industry forgotten by the internet: Home heating & AC

Quilt and other HVAC companies are adopting a DTC approach to modernize the home heating and AC industry. This model allows companies to bypass traditional retail and distributor channels, offering more direct customer interaction, personalized service, and increased profit margins.

The HVAC industry faces competition from established brands and the challenge of generating consumer enthusiasm for practical products. However, DTC brands like Quilt aim to attract customers by offering sleek, customizable designs and leveraging user data to adapt products to consumer preferences.

Despite initial supply chain issues, DTC HVAC companies like Windmill and July have seen significant growth. Quilt is starting in the Bay Area and plans to expand based on pre-orders, aiming to set industry standards for quality and consumer satisfaction.

There’s also an economic incentive for HVAC brands to be DTC, as it allows them to hold onto a greater portion of profits because they don’t have to pay a middleman. And, by being DTC, HVAC brands get access to a trove of user data, which allows them to adapt products in line with users’ interests.

TikTok of the week…

“The Girls in Marketing Podcast” 

“Do you want to know the most I’ve ever paid an influencer to do one post?” Lauren Stretch asks “I paid one influencer to do a YouTube video for £60,000 and we sold £21.99… that was painful”. 

She then goes on, ‘I have paid one influencer $190,000 as well…”

I came across this incredibly refreshing TikTok yesterday morning. It was so unusual to see the other side of the marketing game on TikTok - usually its the creators themselves on there explaining how and what they got paid for a campaign. This time around, its the female marketers booking them and authentically exposing whether or not these investments are worth it? 

@girlsinmarketingpodcast

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