Editorial
The Gist
- Cut content costs. Remix, reuse and lean on AI to stretch your content budget further.
- Expand your reach. Syndicate ecommerce listings to maximize visibility across multiple channels.
- Team up to survive. Collaborate with D2C peers to expand your audience and reduce marketing costs.
Since 2022, the direct-to-consumer (D2C) ecommerce model has been under severe stress. Top brands like Peloton, Casper and BlueApron have seen their stock prices and valuations oscillate.
With interest rates high, they and their peers have struggled to raise more capital. “VCs No Longer Do DTC,” wrote Crunchbase News in November 2023, noting that funding for this category in the US had fallen from a high of $5 billion in 2021 to a mere $130 million as of their writing.
The premise of D2C was to cut out distributors and retailers. That way, D2C brands could price under established competitors, own the relationship with consumers and control the buying experience. This model seems to be struggling because of intense competition and rising costs in marketing.
D2C brands have tried their best to adapt. Some have gone from online-only to multichannel, offering their goods through retailers or online marketplaces like Amazon’s and Walmart’s. Some in Europe are cutting free and fast delivery, a significant cost.
Nevertheless, data from eMarketer suggests that established brands are beating upstarts at their own game, significantly growing their share of D2C sales while native online brands plateau.
I won’t pretend the challenges facing D2C brands can be solved easily. That said, if marketing costs are a top source of pain, these thrifty tactics might help:
1. Reduce Content and Marketing Operations Costs
Corporate marketing budgets have reached a post-pandemic low at 7.7% of annual company revenues according to the 2024 Gartner CMO Spend Survey. At the same time, marketers are getting less for more ad spend. Search advertising costs grew while conversion rates fell yet again in 2024 after doing the same in 2023, says Search Engine Land. Social advertising appears to be following the same trend. A potential solution, then, is to tackle costs a brand can control: content and operations.
D2C brands regularly spend resources on photography, video, social content, influencer content, design and blog posts. Most brands try to analyze which assets perform best according to social shares, downloads, click-throughs or whatever they track.
Why not remix and reuse that top-performing content to reduce costs? Identify the best photos and reuse them with new copy, new ad formats and new audience segments. Turn the winning blog post into shorter, punchier social posts or sections of an infographic. Turn one-off TikTok successes into series that revisit the same, proven themes.
D2C brands can lean on AI to help. Generative AI is arguably better at remixing than original content creation. If you give it text from a successful ad and ask it to generate 10 more versions, chances are one of them will be useful. If you first tell ChatGPT it’s a professional ad copywriter with 20 years of experience and three Cannes Lion Awards to its name, it’ll do even better. Seriously. And if you add details on the creative constraints, audience, use case, value prop, etc., the upfront effort will ultimately save time and lead to higher quality results.
Related Article: 11 Content Marketing Trends That Will Transform CX in 2024
2. Go Wide With Ecommerce Syndication
D2C brands have reluctantly started to work with retailers and online marketplaces. However, adding these channels can be time-consuming and tedious. Each channel has different requirements for images, text and product information in listings. That is a major reason brands commit to relatively few channels. Just the thought of updating 100 channels as new products and styles arrive is exhausting.
Here’s the thing: a listing is a form of advertising, whether or not you pay for “sponsored” product placements. Listing a product means that it will show up more often in searches and that shoppers will stumble upon your brand more often. Why not share some margin with marketplaces and compare the ROI to pure ad spending?
If you have to find and reassemble product listings manually for each channel, don’t bother with this tactic. But, if you have your product information and content assembled — perhaps in a digital asset management (DAM) and product information management (PIM) system — you can syndicate listings to dozens if not hundreds of channels automatically. You can even syndicate a limited collection of goods and reserve more premium, high-margin offerings for your own website.
3. Team up With D2C Peers
Bloggers, thought leaders and social influencers were among the earliest web denizens to build their businesses collaboratively. They still promote each other’s content, knowing that their peer’s stamp of approval (and reach) is more effective than any ad money can buy. Given that most D2C brands are pretty niche — they do bedding or eyeglasses or meals, but usually not all three — why are we not seeing more cross-promotion?
I suspect part of the issue is control. There’s a fear that partner brands won’t use the voice, tone, imagery or verbiage one’s own brand would use. Sure, but that’s a risk every time a customer or journalist writes a review. There might be concerns, too, about allocating precious moments of awareness and attention to other brands. Well, the point is that they will do the same in return, and odds are, it’ll reach a new audience and stand out because it’s not the same repetitive message.
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You can help partner brands share your story (and vice versa) by giving them access to curated photos, images, logos, copy and other assets. Just don’t stifle their creativity in a fruitless effort to micromanage your brand image. Only a brand that no one talks about can control the entire conversation about itself.
Start Somewhere in D2C Ecommerce
I won’t pretend to have “solved” the cost challenges in D2C ecommerce. What I’ve tried to do is encourage D2C brands to act on what they can control: content costs, distribution methods and opportunities to reach more customers through cross-promotion and collaboration.
However, none of these options will work if they overload a marketing team that already has too much to do. Let AI help. Let martech systems help. And let others help you tell the brand story.
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