Search

Out of necessity, DTC brands are rewriting the Black Friday rulebook

The Drum 29 Nov 2019 06:23
Mejuri launched its only sale of the year today (29 November)

Direct-to-consumer brands, with their limited ranges and online conception, once had an ambivalent approach to Black Friday. But as customers demand more, many of these online brands are adopting and evolving the retail frenzy into something more than just discounting.

Ad spend has always hit highs the weeks surrounding Thanksgiving, as retailers look to shout the loudest about their Black Friday promotions. Video cost per impression jumps 23% during the holiday season, according to Adobe, while spend on US TV commercials during the first two weeks of November increased by 5% year-on-year, according to MediaRadar.

But 2019 could go down as the year Black Friday advertising truly came to Instagram. Despite modest support of Tim Armstrong's dedicated 'DTC Friday', a scroll through this morning’s (29 November) feed unearthed Black Friday ads from online challenger brands such as Sheertex, Alo, Dear Frances, True&Co, AllModern, Purple, Pelacase and countless others.

Tom Williams, head of e-commerce at Maginus, believes the first waves of brands born online have started to take advantage of their market position when it comes to competing for shopper spend on Black Friday.

“Brands that sell DTC also have the advantage of utilizing additional data insights to provide super-personalized offers and incentives to customers, as this information isn’t held by a third-party. By creating clear differentiation, such as excellent customer service, they can survive the promotional period without putting too much of a dent in their profit margins.”

Not all of the big DTC names are acknowledging Black Friday. Shaving brand Billie, luggage designer Away and online styling service Stich Fix are all operating business as usual. But others, including Glossier, Casper and Bombas have lent into the trend, enticing new and old customers with limited sale prices and across-the-board discounts.

“One thing that has stood out this year – way more than in any other years – is in the 10 days prior to [Thanksgiving], our clients’ conversion rates dropped across the board, some by up to 50%,” he said. “People aren’t buying at all before [Black Friday] because they’re waiting for a promotion at this time of year.

Romano has seen two approaches to this: embrace the short-term and give customers a knocked-down price, or be more creative in what you offer in the run-up to the holidays.

The former is a tricky option for brands that pride themselves in pricing transparency, as well as those that are building up a status as a luxury label. So, to avoid this problem, a number of DTCs, such as Maison Miru, are offering certain discounts and deals around the holiday shopping period without inelegantly stamping ‘Black Friday’ or ‘Sale’ across their advertising.

“The deals tend to be more modest in nature, as compared to those from major brands at big box retailers.”

“It’s not traditional, especially when this is a time when shoppers are looking for deals, but we wanted to reward people who want the benefits of our products over time,” said Zak Normandin, founder and chief executive of the brand’s parent company, Iris Nova, in an interview with Glossy.

"This will be our first – and only – sale of the year, and we hope to learn how this changes our customers' behavior," said Abigail Cook Stone, co-founder and chief executive of Otherland, and Erica Amatori, its director of marketing, in a joint statement

But on the other side of the Atlantic the brand is using Black Friday to make more of a statement. For one day it has removed all product from its London store and is encouraging shoppers to attend workshops about the brand’s approach to sustainability and conscious consumerism instead of buying its products.

“We’re being a bit more considered on the busiest day of them all, when there will be big red ‘sales’ signs on lots of the stores in Covent Garden.”

According to data from Shopify Plus, 42% of UK consumers plan to prioritize their holiday shopping at stores that are socially responsible. It’s therefore likely the retail landscape will see more purpose-led campaigning – not discounting – on Black Friday in the future, as environmental consciousness grows.

Continue reading original article...

Tags

Black Friday FundDTCMejuriAdobe