There is discourse in the marketing world over the future of D2C. Forbes reported earlier this year that “D2C is out, and the migration to wholesale is in.” Although we know that D2C brands have to adapt to current market conditions, US D2C ecommerce sales are still projected to grow through 2024.
Though many D2C brands are struggling, Solo Brands, an outdoor lifestyle company, for example, grew 28% last year to exceed $500 million across its four brands—Solo Stove, Oru Kayak, Isle Paddle Boards, and Chubbies Shorts—while operating profitably at scale. Solo Brands exceeded its Q4 2022 and full year 2022 fiscal expectations and was able to unlock profitable growth in both the D2C and wholesale channels.
Solo Brands is unique because the company began with the Solo Stove and then acquired the three other brands in its portfolio. Each of these brands had a strong following before being acquired. When merged together, Solo Brands articulated its brand values by publishing a letter on its website. The letter mentioned the importance of the “brand’s emotional connection with [its] customers” and “deliver[ing] incredible customer experiences.” The letter also called attention to Solo Brands’ values, including its ties to environmental responsibility. Establishing your brand’s core values is a crucial step toward building a strong brand, as it allows your customer to know who you are before they decide to become a loyal customer. According to April 2022 Google Cloud Research, 82% of consumers prefer to shop from a brand that aligns with their values, and 75% will stop shopping with a brand that conflicts with their values.
A quick online search shows all the different philanthropic initiatives and partnerships Solo Brands participates in to contribute to sustainability and environmental causes. Not only does this work nicely with its outdoor living and outdoor activity-focused products, it puts power behind the brand’s beliefs. This strong brand storytelling helps get consumers hooked into the brand, and builds trust that the company means what it says.
After setting up your brand story, it’s important to build upon your customer relationships and show people why your brand is preferable over a competitor. It’s no secret that customer acquisition costs are rising, and there is a trend of retailers focusing on retention to balance out these costs. When combating high customer acquisition costs, it’s crucial to double down on the value that you can provide to customers. Think about the value that is unique to your brand over competitors or other brands in the space, and make customers aware of it. Whether that is through highlighting the quality of your products, creating loyalty programs, or personalizing the shopping experience, find ways to stand out while providing value to your target and existing customers. Solo Brands, for instance, loves to survey customers, especially when it comes to product innovation. By asking customers what products they want to see next, Solo Brands establishes trust and open communication and portrays the future value it can bring. This also helps garner excitement around product development and keeps customers engaged and coming back to purchase more.
It wouldn’t be possible to unlock growth without having a strong sense of your data and analytics. By now, most brands know the importance of innovation and experimentation. Without it, you will fall behind your competitors. Again, there is an important role customers can play with providing key insights. You can survey customers post-purchase, incentivize customers to share zero-party data in a value exchange scenario, ask first-time customers how they heard about your brand, and so on. Solo Brands’ data shows that 40% of its business comes through customer referrals, not only indicating the fierce loyalty of its existing customer base, but also verifying the importance of doubling down on the customer experience. With everything that it does, Solo Brands puts its customers first, and attributes a huge part of its success to its audience. Solo Brands CEO and director John Merris shared on the “Rethink Retail” podcast that, “We wouldn’t have been able to [achieve this growth] without our customers.”
Merris will share more strategies to drive profitable D2C and wholesale growth at the upcoming 2023 CommerceNext “Ecommerce Growth Show.” If you’re looking for inspiration and actionable tactics to help your own D2C brand, attend the Solo Brands fireside chat at CommerceNext's conference from June 20-21 in New York.
One Liberty Plaza9th FloorNew York, NY 100061-800-405-0844