This is the free version of Trends PRO #0028 — Subscription DTC
Big brands make products for everyone. And no one.
DTC brands move fast to serve niches. Some automate shopping with subscriptions.
Selling directly to buyers. Without retailers or wholesalers. This broad term, technically, includes software, media and more. But we’ll focus on physical goods.
Recurring purchases and delivery of goods. Removing the need to re-order.
Subscription DTC Brands
- Competition on paid platforms will shift spend to influencers. Some will eventually ask… Why take endorsements instead of equity?
- Products will be copied. Few DTC brands are original. Winners nail acquisition.
- Current customers will guide brand expansions. Quip sells dental insurance. Theragun sells CBD products. Dollar Shave Club sells toothpaste. Brand expansions increase CLV and justifiable CAC. Building barriers for new players to compete in paid channels. (Via Ethan Jones)
- Build an audience. Organic acquisition shields unit economics from fluctuating ad prices.
- Use growth tools. You can buy this course for $249 or subscribe to Simply Earth.
- Test copy and packaging first. See if anyone will buy before you build. Justin Mares validated Kettle & Fire with Fiverr, Unbounce and Bing. (Via Marco Marandiz)
- Use gamification to boost engagement. Crave Cookie has a flavor of the week. MeUndies encourages you to build your collection.
🔑 Key Lessons
- Build an audience first. Dominance in paid channels is temporary. Organic acquisition is the holy grail.
- Use the razor and blades model. Bottomless, quip and Harry’s lead with one item then replenishments.
- Code, manufacturing, fulfillment, branding and paid acquisition are being commoditized. New products get copied. Brands compete on acquisition.
“DTC isn’t all about about acquisition. Brand matters too.”
Brand matters to current customers. Similar brands fight for new customers. With adspend as ammo. Organic acquisition is one of the only functions that hasn’t been commoditized.
- On Linear Commerce — Build an audience before a product.
- Bringing DTC Brands into the Subscription Space — Creative ways for non-subscription DTC brands to adopt subscription models.
- Casper and DTC Brands — It’s dangerous to compete on adspend alone.