DTC Briefing: Brands rethink their marketing as customer acquisition costs soar & shoppers get pickier

This is due to a number of factors, ranging from inflation to rising competition. In turn, the big focus for some of the DTC founders I’ve recently spoken with has been rethinking how they speak to and acquire new customers. The purchase consideration cycle has gotten longer, while the novelty of simply being a DTC brand has worn off.

Some brands have invested more in traditional brand marketing over the past year, while others have focused on finding more creative ways to reach new customers. There has also been an increased focus on communicating to customers more frequently and in more ways why they should buy from a particular brand.

The changes being made are subtle ones. These customer acquisition challenges aren’t talked about loudly in the industry, but rather are nodded to periodically in earnings calls (and show up when reading between the lines of publicly traded companies’ quarterly performance). While some companies can continue growing their business through wholesale and retail channels, these challenges become more evident in the e-commerce channel. 

“We’ve seen consumers show a bit more discretion in regards to their purchases,” Solo Brands CEO Christopher Metz said during his company’s first-quarter earnings call, in which the brand reported that its DTC revenue was down 6.8% year-over-year, while its overall revenue was down 3.3%.

Even Warby Parker, which reported 16.3% revenue growth year over year during its first-quarter earnings, has struggled to grow its e-commerce channel over the past year and is only projecting low single-digit e-commerce growth this year. 

“Direct-to-consumer is having a really tough time right now,” Salguero said. ButcherBox, for its part, had its first-ever down year in 2023, but “we are feeling pretty good about our ability to grow this year,” he said. 

Refocusing the marketing message
For ButcherBox, a big focus has been on “trying to reinforce our mission of transforming meat,” and “just talking more about why buying from us really matters,” Salguero said. This means communicating that the company is a certified B Corp, as well as how its high-quality meat meets various third-party animal welfare certifications. The idea is that, as sustained inflation leads people to be picker about their purchases, it’s more critical than ever to make sure that people feel good about buying from ButcherBox. 

“It is important to note that we are not just competing against other meat companies, we are truly competing against all other companies out there,” Salguero said. 

Brian Berger, founder and CEO of men’s apparel brand Mack Weldon, similarly told me that “it’s just harder to get people to take action on something,” and “that’s just a reality for [every startup]. A big focus for Mack Weldon is getting back to growth in its e-commerce business this year, after having a close-to-flat year in 2023, Berger said. 

As a result, he said that it’s more critical that startups set more context about their brands. That means educating customers more on “what you stand for, and what the consumer is buying into, beyond just the products you sell.” That way, when a customer is ready to buy something new, the brand is top of mind. 

At Mack Weldon, one way that the marketing team has tried to do this is by deploying more marketing around its proprietary fabrics that Mack Weldon has invested in. Berger said that, historically, “we would think about campaigns that were much more oriented towards a traditional lifestyle campaign — you know, it’s summertime, take a bunch of people to California and show them having fun by the pool.” 

Now, there’s much more focus on campaigns that talk about what makes Mack Weldon different. For example, Mack Weldon has a silver line, in which silver is woven into t-shirts, underwear and denim. Mack Weldon has begun marketing about the benefits of this. The silver is supposed to help fight bacteria and inhibit odors, while also making the fabric more durable.

Finding new ways to get customers’ attention
There’s also more of a focus on brand marketing and finding creative ways to introduce the brand to new customers. Last November, Mack Weldon introduced a bomber jacket, that “was never meant to really be a huge volume driver for us,” Berger said, but rather, to begin cementing Mack Weldon as more of a player in outerwear. To promote the new piece, Mack Weldon partnered with Blade, the helicopter company, and did profiles on some of its pilots. 

“We got a whole bunch of content out of that, that enabled us to speak to our consumers…outside of just like trying to tell them, you know, what’s so great about this product and why they need it,” Berger said. 

Indeed, in this new customer acquisition landscape, much of the focus is on finding more creative ways to introduce a brand to customers before they are ready to buy. 

ButcherBox’s Salguero said there seems to be more of a push in the industry for “ the founder or CEO to be more of an influencer.” That is, shoppers are more likely to buy from a startup they have never heard of before if they have encountered the founder before on TV or on social media. As such, Salguero said he has also been focused on doing more podcast appearances over the past two years, explaining the origin story of ButcherBox.

Keeping customers engaged
Lastly, there’s also a big focus on finding more ways to keep customers engaged in a challenging acquisition environment. ButcherBox recently did that through the acquisition of TruffleShuffle, a startup that produces virtual cooking classes.

A big part of TruffleShuffle’s business comes from corporate clients, Salguero said, which presents one way for ButcherBox to reach new customers. But, it also can keep existing ButcherBox employees engaged; the company hopes subscribers will use TruffleShuffle classes to find new ways to cook meat. ButcherBox customers will get access to TruffleShuffle’s cooking content library.

TruffleShuffle, Salguero said, is about “enabling people to cook amazing things in communities… [which] I think is just a really fun experience for people.”

Ultimately, these new tactics and tests demonstrate that DTC brands can no longer rest on their laurels when it comes to acquiring new customers.

“For consumers, the novelty of discovering a new brand online, the novelty of somebody positioning a product as a better mousetrap, or something better than what they’re traditionally used to — all of that is, like, priced in now,” Berger said. “Consumers have been hearing those kinds of messages for a long, long time.”

What I’m reading 

• Figs has signed a multi-year agreement with the U.S. Olympic and Paralympic Committee and will be outfitting hundreds of health care professionals at various events, starting with this year’s Summer Olympics. 
• Beauty brand Glossier encountered a lot of Reddit hate when it switched up the formula for its signature Balm Dotcom product. So, when Glossier decided to return to the old formula, it incorporated some of these Reddit comments into its marketing campaign tied to the announcement. 
• Wayfair is opening its first large-format physical store, which will stand at 150,000 square feet.

What we’ve covered 

• Padel has become the new go-to sport for brand collaborations, and luxury brands like Prada, Versace and Valentino are getting in on the action. 
• A group of people are trying to bring modern convenience store Foxtrot back from the dead, including one of the startup’s co-founders, Mike LaVitola. 
• How the popularity of F1 and Nascar has ushered in the rise of the racing aesthetic.