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

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.

It’s not surprising. DTC brands – many of which use the platform as a performance marketing channel – increased digital ad spend by 22% between Q3 2018 and Q4 2019, while more and more are partaking in Black Friday promotions.

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.

“With shop prices falling due to heavy discounting for the sixth month in a row, [traditional retailers] need to strike the delicate balance between attracting customers with reduced prices on Black Friday and maintaining a healthy profit margin,” he explained. “However, during this period, DTC brands may actually have a slight advantage because they will have greater visibility throughout the whole process – from manufacturing and logistics through to marketing and retail.

“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.

For Daniel Romano, the chief executive of performance marketing agency Good Moose, a DTC brand's decision to embrace Black Friday is one borne out of necessity.

“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.

“Almost 10 days of losing conversation rates is a lot so ... if you don’t do it, not only have you lost the last 10 days of the month, but four to five days of the holiday season, too."

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.

“Generally, [these] promotions center on price discounts, deals off a minimum spend to encourage higher basket rings, or free goods with purchase,” said Rachel Dalton, a director at Kantar.

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

Meanwhile DTC health drinks brand Dirty Lemon has chosen today to launch its limited Platinum VIP offering, which will send members unlimited cases of its ‘elixirs’ for $100 a month or $5,000 for a lifetime, without making mention of Black Friday.

“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.

Others are openly embracing the discounting tradition while adding a layer of exclusivity to their discounts in order to protect their brands. Mejuri, Quip and Otherland are all marketing their Black Friday deals as ‘our only sale’; the latter’s landing page features a beautiful pocket watch as an antidote to the gaudy ‘Hurry! Ends soon!’ trope.

"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

"First and foremost, we would like to measure and learn customer behavior: how much will average order value increase during a sale period? How many new customers can we pull in from a sale versus a non sale period? What's the conversion rate difference between non sale and sale period? What percentage of people will be buying gifts versus for themselves during this period of time?"

But a growing number of brands are offering something completely different to stand out from the discounting hullaballoo. For instance, Allbirds, which ‘doesn’t believe in discounts’, has dropped three limited edition patterns of its Tree Runner shoe today and plans to drop three more special buys on Monday.

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.

Sandeep Verma, Allbirds’ managing director for Europe, told Drapers: “Hopefully [consumers will] go home asking questions about how their footwear is made, about the brands they’re buying and what they’re doing for the environment.

“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.”

Similarly, DTC clothing shop Everlane is dedicating the biggest shopping day of the year to draw attention to polluting ocean plastic. The company is donating $10 per Black Friday Sale purchase to the environmental charity Oceana in its Black Friday Fund, which aims to raise $300,000.

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.

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