DTC Briefing: How brands are trying to win over price-conscious shoppers contemplating a switch to cheaper brands

“We priced quite aggressively, more so than I would have ever done voluntarily because we had to move a lot of that inventory,” he said. “We didn’t want to end up getting stuck in a situation where that inventory couldn’t move because we waited too long.”

Seeing deep discounts could become more common as brands figure out how to make the most of unpredictable times. Shoppers across income ranges are becoming more concerned about pricing as tariff policies dominate headlines and potentially trickle down to brands. A recent Modern Retail+ and Attest survey of around 1,000 shoppers found that nearly three in four customers think inflation is increasing “a lot” or “a bit.” In response, about 52% of shoppers are switching to cheaper brands, and about 48% are delaying major purchases.

Brands are planning and pricing accordingly. Ministry of Supply, for its part, is a profitable business that’s done over $100 million in lifetime sales. Its customer is traditionally a high earner who works in professional settings, such as tech or travel. But those are industries that are currently seeing layoffs and potential market swings.

Advani said putting items on sale works.  

“My best move right now is just getting that inventory in the hands of qualified customers,” he said. “Even if it’s not a profitable transaction for me, at least that inventory is sitting in a customer’s closet instead of trapped in a warehouse somewhere.”

Behind the scenes, Advani said his team is looking to be more agile and responsive to customer temperament. The team has moved calendar planning meetings from monthly to weekly so it can make decisions faster based on headlines and the state of the market. Using year-over-year comps as a yardstick, he said, has been thrown out the window. “You can’t even really put them side by side. They’re such different years,” he said.

Overall, Advani said it’s becoming more challenging to acquire new customers unless there’s a big sale or enticing launch. 

“If everybody’s running a promo but us, there’s just no way you win that fight for the new customer,” he said. “Maybe for your loyal customer, you can still win it. But for that new customer, they’re more excited to try something that feels like a bigger value.”

Beyond pricing, Advani said shoppers’ cautiousness is also reflected in on-site behaviors. People are spending more time looking at web pages, and customer support request volumes are going up, he said. Meanwhile, the “nurture cycle” — from the point of introduction to the brand to the point of sale — is up by around 20%. 

“The consideration cycle is longer, and people are more careful,” he said. “They’re worried that brands are passing off quality decreases for the same price.”

For some brands, this kind of cautious shopping behavior winds up bringing in new customers. Adam Goldenberg, CEO at Fabletics, said about a third of the company’s shoppers are those who are looking for the same or better quality at a more affordable price than Lululemon or Athleta. 

Goldenberg said trading down is becoming more common as stigma around scoring deals and off-price shopping erodes. In some circles, it’s cool to be a savvy shopper, he said.

“There can be a misconception that affluent shoppers don’t like to save money,” he said. “We’ve been highly successful by developing incredibly fashionable, innovative, and high-quality products, yet offering them at an accessible price point. That’s allowed us to take significant market share.” –Melissa Daniels

Tariff talk

While brands were hoping for a reprieve, President Donald Trump has said that he will plow ahead with 25% tariffs on Mexico and Canada imports starting on Tuesday, while other tariffs appear to be coming down the pipeline.

Chip Malt, the co-founder and CEO of cookware brand Made In, recently spoke with Modern Retail about how the brand is thinking about tariffs. In theory, Made In should benefit from tariffs on imported goods and the revocation of the Section 321 loophole, as the brand produces some of its products in the U.S. But the reality is more complicated than that. Some of Made In’s products are also manufactured in Europe and are poised to get hit with a 25% tariff should President Trump make good on his threat to slap 25% tariffs on imports from the European Union. Made In, like many brands, is now trying to figure out how to best position itself for the future. 

Here’s a few highlights from the conversation about what Malt and Made In are thinking about right now, lightly edited for clarity and length:

“From day one, as we started the business, the concept was, ‘We’re going to manufacture in these more expensive places, because we believe the product is better. … So originally, we were kind of excited when these things started to get announced, because the playing field was then leveled. … Obviously, we didn’t see this coming — the 25% hit on the E.U., which is a large portion of our manufacturing. [We] manufacture the majority within the U.S., Italy, Sweden and France, and that kind of screwed the whole concept of it because now the relative bump of the China tariff is almost running in parallel [with other tariffs].

“[To prepare for this] from a business perspective, we had 10 open roles in market, but we are doing a hiring freeze because we have no idea how this is going to shake out. We were growing: Our January was up 97% year-over-year, our February was up 60% year-over-year — we’re having a really good year. It’s like, ‘Why does this shit just keep happening?’ … And with that, we’re already having a conversation of, ‘Where do we want to manufacture?’ We need to increase supply somewhere, and we have vastly shifted those conversations, as much as possible, toward the U.S.

“No one is super jazzed about the economy, right? Inflation is  kind of persistent, and it’s not like we’re throwing tariffs into a bull market. [Tariffs] are causing caution on investment, it’s causing caution on hiring, it’s causing caution on a lot of other stuff.” –Anna Hensel

3 questions with Florence Kings, head of sales at Tangle Teezer

Tangle Teezer is a hair tool brand that’s gained steam in the U.S. with launches in Amazon, Ulta and Target. But now it’s looking to take the same momentum into the pet space with the launch of the Pet Teezer in over 500 Target locations.

What made Tangle Teezer get into the pet industry? 
We used to get so many customers writing in. Especially with the original detangler with the palm-held brush, people would say they were using it on their dogs and cats. It felt like a natural pivot, at some point.

How did your company differentiate the pet product to make it a unique item?
When we created Pet Teezer, a lot went into making it more grooming-friendly. It has an ergonomic shape, and it’s also incredibly easy to clean. Other pet brushes have cushion pads for their bristles. Our product is all plastic. One of the biggest pieces of feedback we get is how easy it is to clean.

What was your strategy to get Pet Teezer into Target?
We kind of replicated our sales strategy with Tangle Teezer. We launched that in the U.S. at Ulta, [driven by the retailer’s] beauty specialty but primarily hair specialty. They have salons in their stores and a massive hair focus. We took (Tangle Teezer) to PetSmart, which is the largest pet specialist retailer in the U.S. Early on in the launch, we were achieving or exceeding sales benchmark tests, and we knew we were onto something good. We had a fantastic first year of sales at PetSmart. Given that success, we felt really successful in taking it to Target. –Melissa Daniels

What we’re reading

• Inside Hoka’s fashion ambitions as the brand releases its most expensive shoe to date, a collaboration with Italian luxury fashion house Marni.
• Solo Brands received a warning of noncompliance from the NYSE after its share price fell below $1.00.
  Allbirds’s latest brand marketing initiative is a four-part content series featuring Stanley Tucci.

What we’ve covered

• From Etsy to Walmart, here are the potential winners and losers of Trump’s tariffs (so far). 
• Sweetgreen is betting on everything from low-cost add-ons like fries to collaborations with Michelin-starred chefs to keep customers coming back. 
• How Rothy’s store fleet helped the brand grow to $211 million in sales.