‘I’m terrified of spending anything on Facebook’: Overheard at the Modern Retail DTC Summit
Retail leaders got together at Modern Retail’s DTC Summit in Miami to talk about how they’re navigating roadblocks in the industry.
With customer acquisition growing pricier and physical retail expansions becoming more common, executives gathered to discuss some of the solutions to their woes. They also talked about some of the headaches of scaling a brand.
Marketing in a post-iOS 14 environment, where budgets are tight and finding new customers becomes harder, was a major topic of discussion. Executives also talked about expanding outside direct-to-consumer channels.
The discussions were done under Chatham House Rules — allowing reporters to highlight people’s thoughts without identifying them by name or job title.
Below is a compilation of thoughts and quotes from the three-day event.
Finding profitable sales channels
“We don’t actually sell on Amazon but what we are starting to face is the duping… so now we’re having to come up with a strategy.”
“DTC is our most profitable margin-wise. Amazon is the next most profitable margin-wise by one or two points. but Amazon being a platform and not a retailer is a lot of that.”
“Our biggest wholesaler is Goop, which is Gweneth Paltrow’s website, and we drop ship for them. I feel like that gives us some control in our inventory.”
TikTok’s limits
“The organic side of the house and the content creation side of the house is getting more expensive.”
“We drove a bunch of traffic but no conversion.”
“It’s effective as a pull market, not a push market.”
Handling the post-iOS 14 fallout
“We have very solid engagement because of our community… it’s kind of a: where should be investing? I’m terrified of spending anything on Facebook.”
“We’re looking for something new. The only time we increase our engagement and everything is when we come out with new products, and then our Instagram and Facebook ads go up. We’re looking for other channels to explore.”
“The loss of the insights was big for us, and as a small business we don’t have the funds to do big segmentations.”
“We actually didn’t see a big drop off [when iOS 14 first came out in early 2021] in acquisition or CAC until the back half of the year. And that was also when macro-climates started slowing down. Things decelerated because of inflation — gas and food, people were spending less on discretionary. It’s trying to understand where we can optimize. But the constant business question we get from leadership is what percentage is from macro causes and what percentage is from iOS-related [issues].”
“My biggest challenge is with my top-of-funnel campaigns… as I look to do a lot of brand awareness, brand lift I’m having a hard time justifying spend.”
Additional reporting from Gabriela Barkho and Cale Guthrie Weissman.