In the rapidly evolving world of ecommerce, success is increasingly determined by how well DTC brands can navigate a landscape that grows more competitive by the day. As more businesses enter the online marketplace, the challenge isn’t just about standing out—it’s about staying ahead.
Ecommerce brands face many challenges, from meeting (and exceeding) rising customer expectations to increasing acquisition costs and strict privacy laws. DTC brands must expand their customer acquisition strategies to adapt, innovate, and scale.
In our recent webinar with Retail Brew, Sonya Gavankar, contributor at MorningBrew, sat down with Elery Pfeffer, CEO and Founder of Nift, and Ari Alhadeff, VP of Customer Acquisition for a National Fragrance Subscription Company, to discuss the roadblocks DTC brands are facing and top-performing strategies they can implement to turn these challenges into opportunities.
Let’s cover some of the highlights of their exciting conversation.
3 Key Challenges DTC Brands Face Today
1. Fierce Competition
Since the pandemic and ecommerce boom, the ecommerce sector has exploded. The industry has grown so intensely that global eCommerce sales will account for $6.3 trillion in 2024, an 8.76% increase from 2023.
While this growth offers more opportunities for DTC brands, it has also led to a saturated market where nearly every niche is packed with intense competitors.
Gaining visibility and building a loyal customer base has become more challenging for new and emerging DTC brands. Meanwhile, established brands must continuously innovate to maintain their edge. The sheer volume of online stores means businesses can no longer rely on traditional marketing strategies alone—they must offer something unique to stand out.
2. Rising Customer Expectations
Today’s customers expect more from their online shopping experiences. Speed, convenience, and personalization are no longer optional—they’re essential. As technology advances, 73% of customers must expect better personalization and 91% of customers are more likely to shop with brands that send them tailored offers.
Thanks to the ‘prime effect,’ consumers expect seamless and frictionless buying interactions and demand the same level of service from all ecommerce platforms. This expectation shift forces retailers to invest in technologies and processes that enhance the customer experience. Brands that fail to meet these heightened expectations risk losing customers to competitors who can deliver on their promises.
3. Acquisition Costs and Privacy Laws
As competition intensifies, the cost of acquiring new customers has skyrocketed. Advertising expenses have increased significantly—Facebook ad costs increased by 89%—making it more challenging for smaller players to compete.
“The biggest challenge we’re facing is how to drive new growth, reach new audiences, and increase our subscriber base while maintaining our desired ROAS. There are rising costs, increased competition, and shortened audience attention spans on traditional channels like Meta. Moving forward with traditional marketing channels isn’t cutting it anymore.” -Ari Alhadeff, VP of Customer Acquisition for a National Fragrance Subscription Company.
To fuel the fire, privacy laws restrict how brands can collect and use consumer data. These laws are designed to protect consumers, but they also limit the traditional methods of targeting and personalization, forcing ecommerce businesses to rethink their marketing strategies. Increased privacy restrictions mean that traditional acquisition channels like Facebook, Instagram, and Google ads aren’t as effective as they once were despite being more expensive than ever.
3 Strategies DTC Brands Can Implement Today
1. Leverage AI and ML
Artificial intelligence (AI) and machine learning (ML) are transforming how ecommerce brands engage with and attract new customers. By quickly analyzing vast amounts of data, AI can help retailers offer personalized shopping experiences that meet individual customer needs, all while saving time and money.
AI enables businesses to connect with customers deeper by recommending products based on browsing history or optimizing pricing strategies in real-time. Along with personalization, DTC brands can utilize AI to streamline other marketing efforts, including:
- Customer segmentation
- Predictive analytics
- Product development
- Customer support
Brands that effectively leverage AI can drastically improve customer satisfaction, drive higher conversion rates, and increase customer lifetime value.
2. Harness The Power Of Data
Data is the lifeblood of modern ecommerce. No more guessing or hoping a strategy will succeed—DTC brands that utilize the power of data to make informed decisions will stay ahead of the competition.
Data allows DTC brands to analyze customer behavior, purchase history, and preferences to tailor products to meet customer demands. Data-driven insights can help optimize marketing campaigns, improve product recommendations, and enhance overall customer experience. Brands that strategically utilize their existing consumer data can reduce dependency on costly acquisition channels and boost their conversion rates.
3. Get Creative (Think Outside The Box)
How can brands overcome the challenges posed by rising acquisition costs and privacy restrictions? Innovation.
E-commerce brands are increasingly adopting creative approaches to engaging customers and building loyalty. For example, some companies build strong communities around their brands through social media and content marketing. Others are exploring alternative acquisition channels, such as influencer partnerships, referral programs, affiliate marketing, and Nift advertising for DTC brands.
With Nift, for example, consumers are offered personalized ‘thank you’ gifts after completing an action, such as leaving a review on Tripadvisor or registering for a yoga class via Mindbody. Nift’s unique gifting strategy empowered Blenders Eyewear to generate 19,000 net new customers at a consistent CPA and ROAS in just one quarter.
By thinking outside the box, ecommerce businesses can find new ways to attract and retain customers without relying solely on traditional advertising.
Hear From The Experts: Thinking Beyond Traditional Growth
Paid search and social are tried and true ways to acquire new customers, but there are new performance marketing channels on the market that can help brands grow faster for less. So, how should DTC brands approach the decision to invest in new performance marketing channels? Ari has some advice:
“DTC brands need to focus on scalable, trackable, and cost-effective channels that attract high-quality customers. In today’s economic environment, this approach is more critical than ever. I prioritize channels based on three main criteria:
- It has a broad reach with the potential to scale and provide substantially more monthly subscriptions at our desired ROAS
- Minimal resource investment, so it has to have easy integration, low creative development needs from my team
- Measurable performance with clear data tracking and attribution so we can easily assess customer attribution.”
Elery Pfeffer, CEO & Founder of Nift, further challenges DTC brands to think outside the box and look beyond traditional growth and customer acquisition channels:
“If you think about it, in order to deliver value to users, platforms like Meta have to really prioritize content delivery. At Nift, what we prioritize is showcasing the DTC brand’s product and matching it with the right user. Part of Nift’s secret sauce is to match each consumer with the right set of curated brands to choose from. The consumer needs to be excited about the discovery of our brands and want to share that discovery with their friends.”
Watch the entire webinar here.
Elevate Your Growth With Nift
Winning in the ecommerce game requires more than just a great product. It demands a deep understanding of the industry’s challenges and a commitment to leveraging the latest strategies and technologies.
If you’re a DTC brand in the CPG, health, beauty, digital services, apparel, accessories, or home goods space looking to drive growth without the massive price tag, get in touch with our team to learn more about the power of Nift. Nift’s alternative performance marketing channel is a game-changer for DTC brands:
“Nift really checks all the boxes. It offers broad reach, scales beyond my expectations within my ROAS targets, minimal resource requirements, and a data-driven approach to driving new subscribers. And then there’s the client success team. They’re really impressive and hyper-focused on the success of my campaigns.” -Ari Alhadeff, VP of Customer Acquisition for a National Fragrance Subscription Company.
Give your performance marketing a boost. Request a demo of Nift today.
About the Author
Cynthia LaRue is the Vice President of Marketing at Nift, where she develops an integrated sales and marketing growth strategy to elevate the Nift brand, foster customer awareness, and drive brand preference across various marketing channels.
Cynthia’s passion lies in leveraging digital platforms to connect with customers innovatively, driving demand for Nift. Collaborating closely with the Sales Team, she spearheads efforts to transform capabilities and stay ahead in the ever-evolving e-commerce industry. Her commitment to fostering diverse and engaged teams is at the core of her approach.
Throughout her career, Cynthia has navigated both scrappy startups and global enterprises. Before joining Nift, she served as the Head of Marketing for ShipStation. Her impressive track record includes pivotal roles at Fortune 500 organizations such as The Home Depot and Mars, where she focused on digital e-commerce and held P&L responsibilities for the M&M’s brand.
Outside of work, Cynthia resides in the greater Houston, TX, area with her husband. She indulges her creativity by designing jewelry, exploring hiking trails, kayaking, swimming, and writing. Cynthia holds a dual degree in management and an MBA from Belhaven University, where she graduated Summa Cum Laude.
