As 2024 marks a new chapter, its time for us to refresh, redial and take stock of key DTC learnings from the year 2023. This article is a high level summary of 14 key DTC trends one can carry forth across to the year 2024! So, with that, lets dive into them right away.
1. Net Contribution Margin Matters: Net Contribution Profit Margin is perhaps the most important metric for ecommerce stores. This metric is important as it includes the truest picture of the state of your profitability in your business. Not only does this include all of your standard COGs for manufacturing, shipping, packaging, etc. + all of your standard marketing costs for creative, ad-spend, team spend, and your 3rd party vendors, but that’s not all.
It also includes payment processing fees, any sale discounts you might be running, calculations on expected returns and exchanges, and all the other fun and sometimes “hidden” expenses for your brand. Net Contribution Margin tells you how much PROFIT you generated on a product-by-product basis (with every possible expense considered). This is a key DTC learning embraced by store owners and merchants in 2023.
If you have your fingers on this metric you can quickly identify where all your costs are coming from and move the needle towards driving more profit.
2. Start with essential email flows: As a busy DTC entrepreneur wearing many hats, it is impossible to get everything right from day zero. However, it is also important to ensure you have dialed into all potential sources of owned media that help you drive both conversions, engagement and revenue for your store.
To get started, begin with the most basic flows, welcome flow, browse abandonment, cart abandonment, checkout abandonment and transactional flows. These alone will drive over 60% of your all-up email revenue. This DTC learning can take you a long distance from leaving money on the table. So, don’t stop at just reading this if you have not actioned this yet.
Learn more about Smarte Digital email marketing services here
3. Activate an email capture pop-up on the site:
Emails are your key owned assets – they enable direct control of key communication with your customers. As a store owner, once you have someone’s email, you can remarket to them with new offers and campaigns forever until they unsubscribe.
Incentivize in return for asking for their email id with a discount code or a special offer for new subscribers. Educate them on what they can expect when they subscribe, even entertain them! In either case, ensure the customer is getting something of value in exchange. Ensure every purchase notification includes a thankyou note. This DTC learning is both simple to implement and effective, so just ensure you implement this to build your email lists.
Learn more about iOS17 everything DTC owners need to know to optimise store performance here
4. Brand Your Shipping Notifications: branding your shipping notifications are a latent opportunity to engage, build trust and drive upsells with your existing first time and returning customers.
When their order ships, make sure they get an email with another personalized intro, followed by the shipping carrier information, and an easy link to track the package. A large number of your customer service complaints and tickets will come from people who say, “Where is My Order?” If you can make that clear up front, you will save yourself a lot of tickets.
So, what are the DTC learnings for shipping notifications? Adding a thank you note for making a purchase, including order details such as purchased items, quantities, prices and total cost, adding an order number or a transaction number, estimated delivery date, notifying the user if the shipment is lost besides of course detailing the shipping address upfront.
5. Leverage the Power of Influencers: A growing trend we see and that we can learn from is the growing popularity of micro influencers that are leveraged by DTC brands.
We have all almost certainly seen ads on Instagram, Facebook, TikTok or Pinterest where instead of an ad coming from a brand’s account, it comes from an influencer’s personal Instagram or Facebook page. Its always good to find an influencer or creator who’s really good at speaking to you through the screen. It should feel like they’re talking to you, not just to a camera. These could be existing YouTube vloggers, or TikTok storytellers.
Content creators are a media powerhouse, they have an inherent and ingenious way to engage with your audience, showcase your brand in the right way and create thumb stopping creative. But working with creators means building real relationships with content creators and influencers.
Brands will partner with micro influencers to create authentic and relatable content to drive more sales. This DTC trend is a must have template to build credibility, drive up efficiencies for both owned and paid media.
6. Livestream Shopping goes Mainstream: Livestream shopping via Instagram shops, TikTok and facebook live will become more popular as more customers expect instant gratification on the go.
7. Paid Social Pays With Great Ad Creatives: Create Ads that you personally love to watch and save. Focus on maximizing presence on one key platform before diversifying into several ad platforms. Start with asking these questions. What are your highest margin products? What are the hero products? This DTC learning is evergreen and always iterative however the fundamentals to get to a solid creative don’t change!
i. Ask These Questions to Start Off with: Which products have the highest customer experience? Look at reviews, which ones are thumb stopping – make really good ads. Consolidate multiple SKU offers into a single collection page. If there is one thing you can control, it’s your ad creative. This means one must focus on building a creative strategy triangle. This means focusing on creative strategy, testing and optimizing ad creative and creative production.
ii. Leverage data to help you decide: Leverage data to help you decide which creative(s) work the best. Until you are doing $50M in topline revenue, your “brand” is built by getting your products into the hands of consumers who can use and enjoy what you create. So, be cautious about paid advertising until you build your “owned media” moat.
iii. Test! Test! Creatives! Nothing Beats it – to drive performance.
Until you’ve tried all the mediums and formats such as facebook, Google, TikTok and you haven’t tested enough creative concepts for your ads – your work is still undone. You absolutely should be doing a “media mix” of static ads, videos, UGC, influencer led creatives such as unboxings, reviews and testimonials, story based creative, ads that are humorous, ads that have a profound social message, founder stories, fully animated ads, advertorials, listicles, articles, influencer led creative and more to see what works best for your brand. Carrying forth all these learnings will bring forth many lessons you will treasure for life!
8. How to increase your conversion rate: Here are some no brainer practical actionables for you to implement and drive up your conversion rate.
i. Leverage more social proof using paid creators, and real customers
ii. Design for mobile first. 80% of your traffic will be from mobile devices.
iii. Write copy for mobile first and then adapt for the desktop device.
iv. Focus on benefits not features for your product pages.
v. Make your pricing, discounts, and offers lucrative! Do anything that you can to make the pricing and discounts pop.
vi. Be more visual, use high resolution photos, images of your product photography. Also include illustrations, icons, graphs, charts, etc. Explain visually.
vii. Leverage AI powered chatbots: With Gorgias Automate, shoppers get their answers solved, even outside of business hours. Gorgias Automate goes beyond regular AI powered chatbots, and is leveraged increasingly to drive up agent productivity and maximize store ROI, to provide real time support and increase the CX experience for visitors and potential purchasers. It also supports many channels beyond chatbots.
We offer ecommerce strategy consulting services to stores of all sizes, those starting from ground up, stores from 0-1MN, 10-50MN+ and 50-100MN+ as well. To learn more about the Smarte Digital Growth and Smarte Digital Accelerate packages here. Book a free 30 min discovery call with us at https://www.smartedigital.com/contact-us/
9. Optimize your above the fold landing page experience:
Be it the home page or product pages, collection pages or checkout pages, each of these pages need special attention on the above the fold landing page experience. When a consumer lands on your home page and any other landing page, you have roughly 1-2 seconds to get them interested in your product, brand and offer.
Finally, it’s all about your above the fold experience which is really the hook that gets a potential customer interested in learning more. This DTC learning cannot be ignored by any store, small, medium or large – it is a foundational must for store optimization and to control customer acquisition costs to increase margins.
A rich homepage is a winner, conversion assets that work well are the main banner + navigation, headline + intro content, the header, featured product slider, category image navigation, bestsellers, 3rd party press, trust badges, cross-sells, social proof, and rich footer all together go well as a package. Adding multiple CTAs on the page, an on-page order bump, with well done product descriptions, a generous shipping policy, bundled offers and bestsellers showcased all go well together to drive up conversion rates. This DTC learning can save your day and get you to a sustainable profit margin if you implement this right and keep testing!
10. Omnichannel as a strategy:
a) Leverage Omnichannel Presence for Black Friday & Cyber Monday:
i) Go heavy on Paid Traffic: focus on templatising landing page offers and diverting this traffic to both Shopify stores and social platforms such as facebook shops, Instagram shops and Amazon. These platforms help enhance self-discovery and a great channel to gain new visitors. Launch lead generation campaigns, email, and SMS audience, to raise hand and sign up. Focus on multi-channel remarketing. Retarget viewers and visitors using both images and video. Create separate ad sets for each audience type.
ii) Build a solid omnisocial presence: amplify organic posts, invest in page post engagement content, and invest at least 1-2% of your budget to promote these on facebook and Instagram. Launch rich content around merchandising for social amplification of how to’s, testimonials and offers.
iii) Launch UGC Ads: in the voice of customer. Create video views campaigns targeting both cold and warm audiences.
iv) Invest heavily on Email and SMS: spend time heavily promoting via email and SMS, create anticipation for your product portfolio and launch the best of BFCM offers. Going heavy on both email and SMS for stores help nearly double their revenue through multiple mailings per day.
v) Launch bundling and a smart discounting strategy: ensure you are thoughtful about the types of discounts you would like to offer to your audiences while still remaining profitable. Ensuring you are profitable will result in your store being able to deploy cash into product innovation, to make better products and invest in your community.
vi) Focus on Cross-Sells & Upsells: launch product bundles that enhance AOV growth and push complementary products together. Cross-Sells and Up-Sells both on the home page, product page, checkout page and thankyou page as well as order summary page are critical to drive repeat purchases.
vii) Focus on Campaign Scheduling: identify the peaks and troughs, decide your merchandising strategy and dates when you are going to go really hard.
viii) Optimize Offer Pages: ensure you have an optimized offer page. Bundles should be placed top of fold to ensure optimal conversions, ensure you have product highlights, a countdown timer, social proof to drive trust. Optimize for both mobile and desktop devices (2 column and 3 column devices), discount and call to action.
ix) Leverage Order Bumps: on page upsell or cross sell used to maximize average order value is key to be embedded into all offer pages.
x) Plan peak day promos: for Black Friday, Cyber Monday, Green Monday and add an extended free shipping week.
xi) Add Sticky Add to Cart buttons: this ensures watertight conversions and no leaks.
xii) Go Direct Mail: Direct mail is significantly more attractive vs digital channels. Most people ignore direct mail and think it’s slow, clunky and requires a learning curve. The truth is that Direct mail marketing is often cheaper than a facebook ad. Why? Because the price of the postage is capped. Direct mail also allows you to target customers who aren’t on your email list and are not on facebook. Push your Winback campaigns with facebook, email and direct mail.
b) Seamlessly blend of online and offline: customers are increasingly expecting a consistent experience across all channels, as they move both cross-device and cross-platform. With this as a backdrop, successful DTC brands have been quick to go omnichannel and offer online shopping with pick-up in-store as a key trend to cater to this need as well.
11. Nail Your Holiday Offer: When thinking about promotions and sales ask yourself these questions.
i) What’s the budget to drive awareness of the promotion?
ii) What’s the goal (new customers, hitting monthly revenue goals, sell-through a SKU)?
iii) How much inventory do I need if my sales projections are correct?
iv) Where are we pushing the sale, and to whom?
v) What does my LP look like?
vi) What’s my offer, copy, and ad creative?
vii) And what’s my email and SMS strategy/sequence pre and post purchase?
viii) How are we segmenting or tagging these customers after the sale?
This is what should be top of mind for every important sale campaign, regardless if it’s a holiday or not. This DTC learning makes the execution of the promotion 10X easier when you get copywriters, designers, website merchandisers, and the ops team involved to help go live.
Depending on the month and the state of your business, you could want to:
i) Acquire new customers!
ii) Re-engage lapsed customers.
iii) Cross-Sell more bundles
iv) Sell inventory that’s not moving.
v) Reward repeat customers.
vi) Drive more subscriptions.
vii) Cross-Sell and Up-Sell to existing customers to a new category/ product SKU
Learn how to create holiday magic for your DTC store
12. Focus on Personalization for every stage of the Customer Lifecycle:
Personalization is the process of giving shoppers tailored interactions and experiences. Personalization can be determined by a customer’s past purchases, browsing habits, location, language, and other data collected and segmented. Personalization Strategies focused on email can increase sales, create raving fans for your store, improve loyalty and retention. According to McKinsey & Company, organizations that excel at personalization in marketing generate 40% more revenue from related activities than average players.
Leveraging martech platforms such as Klaviyo as a Customer Data Platform (for Email, SMS and Reviews Management), Okendo or Yotpo for review management, loop for returns, Gorgias for Customer Service, Malomo for transactional emails, ReBuy or Pantastic Apps for Cross-Sell and Up-Sell campaigns, Recharge for subscriptions management and Social Snowball.io or Mini Social for influencer and creator management would help drive personalization for both visitors, first time purchasers and repeat purchasers from awareness to post-purchase lifecycle journeys. This DTC learning is required strategy to continuously drive up both AOV, LTV for any store.
13. Technology driven Shopping: brands will increasingly embrace AI to compare and find items via voice search and image recognition. AR or Augmented reality will aid product visualization making the decision-making process faster and frictionless through the customer journey. Frictionless checkouts in the form of a one-click checkout experience via one click payments and wallets will be table stakes.
Learn about the Ultimate Martech Stack loved by the best DTC brands here
14, CX at the center of any DTC org: CX and retention are going to be a huge focus for many brands in 2024. Consider setting up a dedicated CX team – with a CX lead, CX tech lead, CX Support Agent Lead at minimum. Experts predict that 2024 will focus on strategic planning, AI usage is at the heart of customer experience, more real- time communication, and amplifying the voice of CX within companies. Average service performance across 20 industries in 2023, were first response time 7.6 hours, 2.5 days of resolution time and CSAT scores of 4.5/5.
Here are some key CX insights shared by Gorgias on customer experience.
Amanda Kwasniewicz, the VP of Customer Experience at women’s wellness brand Love Wellness, highlights that personalized customer service has been a key trend of 2023. She’s observed that customers now expect to receive personal recommendations during their shopping journeys.
Zoe Kahn, former Manager of CX & Retention at Chomps saw inventory issues as a major challenge for 2023.
Ren Fuller-Wasserman, the Director of Experience at TUSHY, details, “As there’s talk of recession and inflation, people are really looking for products that provide added value”.
Learn more about Smarte Digital Customer Experience Services here
Another key trend stated by Okendo, is that tech stack consolidation has been a top priority in 2023.
To know more about the Ecommerce Customer Experience in 2023 and what’s next read more here
At Smarte Digital Inc. we offer irresistible Q5 holiday offers that will help you and your team get to a winning start in Q1 2024. To know more, book a free 30 min introductory call with us at https://www.smartedigital.com/contact-us.
