This past Cyber Weekend, which saw $7.5 billion in online sales alone, one marketing slogan cluttered inboxes across the country: “Black Friday Starts Now.”
Direct-to-consumer brands, once known for abstaining from the mass retail holiday Amazon affectionately calls the Turkey Five, jumped in whole-hog this year (or continued from years past).
Take beauty brand Glossier, for example, which offered 20% off during its once-a-year sale to newcomers. Or luxe dog designer Max-Bone, which gave consumers 25% off. What was once taboo for DTC brands is now a welcome way to acquire customers, while other companies such as Bark and Baby Tula even held sales earlier in the month to avoid the holiday shopping rush. It’s a strategy to stand out when big box retailers are discounting everything, from 4K TVs to tea kettles.
“It’s a noisy market,” said Veronika Sonsev, cofounder of CommerceNext, a retail summit company. “It just requires more marketing dollars to get people’s attention.”
BarkBox, the digitally native brand focused on selling dog care items, started its own version of Black Friday in November 2016, dubbing it Cyber Muttday. This year’s deals, which ran online from Nov. 11-17, offered discounted items as well as a $5 introductory box to the company’s BarkBox subscription service. Allison Stadd, vp of marketing at Bark, said Mutt Day is one way for the brand to distinguish itself.
“It’s about us having carved out this unique platform, and it’s uniquely Bark,” Stadd said. “[Muttday] lets us begin the momentum of this really critical holiday period.”
Last year, Stadd said subscriptions were up 142% during Cyber Muttday compared to the week before. Starting deals at the beginning of the holiday season, as opposed to right when it kicks off on Thanksgiving week, gives Bark an edge to build out retargeting pools, according to Stadd. But, while the company’s offering discounts, her team is still measuring other KPIs such as retention to ensure the lifetime value of a customer is high.
“We don’t want to bring in volume at the sacrifice of quality of customers,” Stadd said. “For every promotion that we offer, we always want the immediate acquisition, but also retention.”
According to a study from CommerceNext, 75% of DTC brands increased investment in customer acquisition marketing to gear up for the holidays, with 78% of DTC brands stating the 2019 budget was higher than 2018 for the holiday season. This isn’t surprising, Sonsev said, as having so many brands to compete with makes it harder than ever to acquire customers at a relatively low rate.
Baby Tula, a digitally native brand founded in 2009 and sold to Ergo Baby in 2016, started running sales on Nov. 4 and plans on keeping them going until Jan. 1. Samantha Lee, web marketing manager at Baby Tula, said it’s the first time the brand has done a large sale like this, usually only running a weeklong sale for Cyber Week and then 12 days of giveaways in December.
“A lot of it is driven by the overall shift in ecommerce and with Amazon—having to constantly compete with them as a retailer,” Lee said. “The demand for longer promotions, or more of a Black Friday month, has become one of the only ways to stay competitive. That’s what’s driven a lot of people to start shopping earlier.”
Baby Tula used the early sale time to get rid of some of its inventory and close out certain styles, which Lee said has led the brand to see 31% increase in conversion rates compared to November 2018. Baby Tula has seen “excitement” from its community, Lee said, since the brand doesn’t usually do promotions. However, this year is an outlier for the brand, as it plans to move away from promotions.
“We have an opportunity to reach new customers that won’t necessarily always expect these large promotions,” Lee said. “We don’t want to get in the habit of having to rely on the promos, and get back to showing the real benefit and value of our products at full price.”
While limited-run promotions, such as these Cyber Week-adjacent ones, are challenging for retailers because they want a customer to shop with them the rest of the year, Sonsev said it’s still an opportunity for engagement that can turn shoppers into lifetime customers.
“There’s department stores that are always putting out coupons, or Bed Bath [& Beyond] always has a 20% off coupon and getting people off that is difficult,” Sonsev said. “As long as they’re done infrequently or done around events, it doesn’t have the long-term margin ratio. Consumers don’t look at a brand as being promotional just because they run a promotion during this holiday period.”