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Why DTCs Need a Diverse Marketing Strategy this Holiday

Attention DTC brands: For sellers that want to win the holiday season, let it be known that two-day shipping is the norm—not a perk.

Q4 can be a grueling period for any seller as inventory demands ramp up and the marketing stakes get higher. For direct-to-consumer brands, however, things can get a little dicey as a DTC’s ability to connect with consumers—typically its secret sauce—can be filtered out by all that holiday noise.

Extremely targeted inventory management is crucial, said Pete Killian, a partner at consultancy firm Vivaldi Group. “With the vast shopper data now available to them, DTC brands have no excuse for not being laser-focused in their offers. Effectively targeting offers means more accurate inventory projections—not to mention happier customers,” he told Sourcing Journal.

Beyond targeting different buyer personas and product categories, DTCs with limited SKUs can also use their narrow product selection in their favor by offering personalization during the holidays, said Elizabeth Shobert, VP of marketing and digital strategy at StyleSage, a provider of retail analytics and automation.

“They also have a leg up because, unlike most other retailers, DTC brands generally don’t have an overly promotional marketing strategy,” she added, “so they really get the consumer’s attention if and when they do offer up a promotional discount or another type of offer during the holiday season.”

DTCs should capitalize on what makes them successful to begin with: forging that consumer connection. “DTC brands exist because they have a unique identity,” noted Killian, “and they can’t compromise on this just to attract more holiday traffic.”

Furthermore, consumers who make purchases on their phones aren’t differentiating between direct-to-consumer and traditional retail, and the way to connect with them is to create a unique perspective and amplify it, said Eric Fisch, national sector head of retail and apparel for HSBC Corporate Banking.

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They should also monitor how today’s consumers are purchasing their goods, especially given the rise in pay-as-you-go systems like Klarna and Afterpay. Nikki Baird, VP of retail innovation at retail analytics and technology firm Aptos, said these types of options are on the rise.

“We are seeing more and more retailers who are interested in offering payment options that are sort of a modern-day version of layaway,” she told Sourcing Journal, “and these are all kinds of retailers, including—surprisingly—luxury.”

When it comes to marketing, diversity means stability, said Fisch. DTCs must be mindful that they’re not returning to the same well too often lest they hit a saturation point where they’re “spending more dollars and just basically reaching the same customer that is already buying from you,” he said. “I’ve seen a lot of brands in our portfolio switch back to more [print] catalogue spend, which is a way of differentiating.”

DTC brands relying heavily upon social media advertising should also take note that costs of social ads and paid search have been rising thanks to the election cycle, and we can expect that to only become more acute heading into the holiday season, according to Fisch.

“We’ve been hearing brands trying to restructure their marketing efforts away from social,” he said. “I have a couple DTC brands that have actually sat out [the holiday season] in terms of posting ads because customer acquisition costs rise to a level that doesn’t make sense for incremental revenue.”

Fisch said he’s also seeing DTC founders spending more boots-on-the-ground time to generate earned media coverage. “It’s easy for me to say, but the best thing do is generate earned media, and we have a couple of brands where the founders/owners are spending a lot more time than they would like doing conferences and generating sort of natural coverage, where previously they wouldn’t have done quite as much.”

One of these brands’ biggest challenges remains securing a spot on “the list” of places for shoppers to browse, said Killian. “One way to win is to create critical mass online by partnering with other brands, for example in a digital mall [such as Yoox or Wish.com], or driving awareness in real life with groups of pop-up locations.”