Lingerie brand Lively is among a handful of direct-to-consumer brands taking advantage of affordable airtime and dipping their toes into the world of TV advertising. But despite the attractive rates, many DTCs are still cautious about shifting to broadcast.
Lively is a rare case: a DTC retail brand that’s experiencing a boost in demand during the coronavirus. Founded by Michelle Cordeiro Grant in 2015, the brand sells what it calls ‘leisurée’: underwear, loungewear and swimwear that is ostensibly more comfortable than the lines offered by the likes of Victoria’s Secret.
The coronavirus has hit US retailers hard, and, in the beginning of lockdown, Lively was not immune to consumers’ abrupt halt in clothing spend.
“Our business definitely declined that first week,” recalls Cordeiro Grant. “But then we quickly came together as a team and said 'OK, let's talk to our community – what do they want?' And what we realized is that our product is actually what they want and what they need.”
The brand scrapped its marketing plan for the spring (a vacation-focused push of its swimwear line) and instead began promoting what women want to wear all day at home: loungewear, and comfy bras and bralettes, specifically those with no underwire. The results were outstanding: the business went from flatlining to triple digit comps in the space of three weeks.
This sales bump pushed Cordeiro Grant to accelerate Lively’s media plan. She had anticipated diversifying offline and into TV “at some point” and had just finished making a commercial when the coronavirus hit the US. So while plans to invest in direct mail and retail were put on hold, “TV all of a sudden started to sparkle”.
“The way that I saw it was so many industries that would typically be spending money on TV – big industries like sports, entertainment and travel – now have to sit on the sidelines,” she explains. “That just opens up so much supply. And then you couple that with the fact people are at home: what are they doing? They’re watching the news. They'’re trying to figure out how to cook, what to cook, how to decorate their home, and all of that is geared by some of these amazing TV stations.
“And the price point that we thought we were going to get in terms of cost per view? It was 20% of that [price]. It’s so much more efficient than we ever anticipated.”
Lively’s commercial is now running on stations such as the Food Network, A&E, MTV, MSNBC Locals, Life and Bravo. The company says the TV campaign has generated more than 20m new impressions for on the website and has also boosted sales from its email and SMS channels by 20% week-on-week.
TV barriers come down for DTCs
Advertisers’ hesitancy to advertise during the coronavirus has forced stations across the world to slash their commercial rates. This has, in theory, brought down the biggest barrier to new and smaller advertisers interested in building their brand through linear broadcast: cost.
These unprecedented rates are coupled with the TV industry’s recent moves to make space for smaller spenders.
“Historically, resources required to place a TV buy disqualified smaller companies and challenger brands from playing on the same level as the industry leaders at a national TV level,” explains Mike Fisher, vice-president of advanced TV and audio at Essence. “But with the rise of impression-based buying and automation across the TV landscape, technology now allows for marketers to facilitate smaller, more targeted and measurable TV buys that connect the TV impression to a consumer action.
“This has opened the door to DTC brands’ entry into the TV ecosystem – whether in linear TV, video on demand, connected TV or over-the-top platforms.”
This evolution is why Hulu is currently running a sponsorship of Little Fires Everywhere and Mrs America with the DTC lingerie brand ThirdLove, which requested a deal that would specifically engage younger audience across streaming. It's why UK broadcast body Thinkbox has witnessed a "migration" of DTCs over to TV in the past 18 months.
And the current low demand for commercial slots – coupled with an organic sales lift – is why British stationery brand Papier is releasing its first ever TVC on 15 May.
“People are open to new connections and discoveries with brands, not least because they are currently starved of them in so many other ways,” says Katie Hind, senior strategist at Papier’s creative agency And Rising. “Brands are finding all sorts of new fans that they struggled to reach previously.
“DTC brands perhaps have the biggest opportunity – a head start and the infrastructure to operate effectively in this unique set of circumstances.”
A cautious market
So why aren’t the TV stations currently flooded with DTC brands?
It’s partly because many are now in financial trouble. The coronavirus downturn has upended many of these startups’ sales projections, leading the likes of Rent the Runway, Iris Nova and Away to lay off staff in an attempt to cut costs and salvage their bottoms lines.
Other internet-first companies are still uncomfortable with lack of attribution that historically comes with TV, says Mihir Haria-Shah, Total Media’s head of broadcast.
“We’ve had loads of conversations [about spending on TV during the pandemic], and the ones that have actually come into fruition are with brands that spend regularly or clients that are TV savvy – those who understand just how good a value it is at the moment,” he says. “Sometimes that can be quite difficult to pitch to clients that have never spent on TV before.”
But the main issue stopping DTC brands from flocking to TV is, Mihir Haria-Shah notes, a lack of creative. Lively was lucky: it had an ad ready to go. Those that don’t may not feel comfortable making their broadcast debut with spots that have been cobbled together from iPhone footage and archive material.
Channel 4 is attempting to rectify this by offering its in-house creative teams to brands struggling to produce new and/or appropriate work. But some still feel uncomfortable advertising at all during this period, conscious of looking like they’re “taking advantage of the situation”, says Haria-Shah.
Cordeiro Grant represents those who think differently. “If the [lingerie] industry was worth $13bn and 70% of that was going through department stores or brick and mortar channels that are now closed, 70% of the demand in the industry hasn’t gone away,” she says. “It is 70% of the distribution channel that has gone away. So if I can chip away a couple points of that, that’s huge growth opportunity for us.
“Just think about how many companies were built during a recession. It’s a really interesting time for business owners and marketers to think differently and really capture a broader audience.”