The direct-to-consumer world is more competitive than ever before. With new challenges popping up every day, many brands struggle to keep up and keep their revenue increasing. Because of this, they can risk falling into a few persistent yet ineffective responses to the pressure.
In the face of constant change and competition, it’s important for merchants to look ahead and keep their eyes on long-term, sustainable growth. After all, while some common short-term solutions may show an immediate return, they can stunt long-term growth.
In Responding to Competitive Pressures, we break down five key issues direct-to-consumer brands are facing in today’s market, as well as common responses to those problems and their associated risks. Then, we shine a light on ways that subscription merchants are using recurring revenue to overcome those risks, increasing value for their customers while creating sustainable growth.
How can you create sustainable, recurring revenue despite retail giants and flooded markets?
Here's a glimpse into what you'll find:
Sacrificing margin to meet customer expectations: While it’s tempting to try to compete with the prices of retail giants, this can misalign your strategy
Allowing CAC to be a growth limiter: By fighting for attention in crowded markets, you can lose sight of LTV
Over-communicating to your customers: Inundating your subscribers with too much messaging can erode brand loyalty
Resorting to constant promos and discounts: Doing this to maintain a steady stream of orders can backfire, devaluing your product
Not putting customer data to work: Neglecting to collect and unpack your data can result in a fragile consumer relationship
Frequently asked questions
What is direct-to-consumer ecommerce?
Direct-to-consumer ecommerce is a business model where merchants sell products or services directly to their end customers. By avoiding the involvement of third-party retailers or wholesalers, brands can retain greater control and customization over the product and experience, enhancing the end result for their customers.
How can my business benefit from subscriptions?
Subscriptions provide your business with a reliable recurring revenue stream, facilitating easier forecasting and empowering your brand to build lasting relationships with your customers. By getting to know your subscribers over time, you can continually hone your offerings to optimize the customer experience and drive AOV and LTV.
How can my brand use this guide?
Use this guide to identify challenges direct-to-consumer brands face in today’s market, as well as the risks that common responses can pose to your business. Then, see key examples of how top-performing merchants are using subscriptions to create sustainable revenue.