E-Commerce for Brands
Low Bar to Entry: How DTC Has Changed
Steve starts off by telling the story of his own surprising trajectory, starting with a customer acquisition operation he built out of his garage. The aptly named company was called Blackbird Garage.
Steve and his growing team gained popularity on hyperspeed. The proof in the pudding was the results they delivered to clients. As a result, Barrington Media Group acquired the start-up and Steve since has grown an even more extraordinary knowledge base.
With all that knowledge and experience, Steve came onto the E-Commerce with Coffee?! podcast to talk with host Nate Svoboda about how much DTC has changed, and what brands selling online need to know.
The DTC Landscape
If the journey taught Steve anything, it’s how essential it is to keep learning in DTC e-commerce.
The DTC landscape today looks wildly different than it did when Steve started Blackbird Garage. He’s kept ahead of the curve as new requirements in online branding and ad strategy have surfaced, and his clients have benefited as a result.
The cost of consumer acquisition, Steve tells us, has gone up for more than half a decade, especially in 2020. Steve also assures us there’s no sign of it stopping. The rise in ad prices has come as a result of increased competition. The barrier of entry into DTC sales, after all, is lower than ever.
Steve paints a picture for us of teenagers starting their own Shopify storefronts and making bank. And in the rush to e-commerce for so many brands shuttered up during the pandemic, competition heated up even more last year.
The booming competition has been fierce and often unpredictable. As a result, Steve and thousands of other professionals like him are working in roles that didn’t even exist five years ago.
The lower bar of entry into DTC comes with a bigger investment for customer acquisition along with many other barriers. “I’ve seen things over the last five or six years become a lot harder for DTC brands,” Steve tells us.
Success in DTC
The success of some DTC brands seems so tangible from the outside that e-commerce seems more attainable than it really is.
It is attainable, Steve explains, but it definitely isn’t as easy as it looks. Any “guru” who tells you otherwise is just selling his or her content.
With more competition in DTC, Steve spends a big part of this interview breaking down what brands need at a minimum to position for e-commerce success. Even the most tangible results, he says, are powered by agile and market-conscious strategies that have to be thought out diligently but made to be flexible.
There are big pieces of strategy that most brands are ignoring. For example, even though Steve makes his bread in customer acquisition, he insists that customer retention is “ten times as important.” Listen to the full interview to hear how he breaks this down.
Steve then recalls how, six years ago or so, brands could just “throw money at ads” and get enough traffic to hit their goals. Since then, customer acquisition (and retention) have become exponentially more expensive. The focus with every customer, Steve explains, should be to build the lifetime value of that customer, not just get more customers through that “digital door.”
Conversion is a strategic focus brands should be mindful of. Steve touches on leveraging new trends to this end, like “immersive” visual shopping through AR and VR.
What’s a Brand to Do?
DTC brands (or those brands planning to enter DTC) need to “start on Facebook and Google,” for organic traffic and brand building, Steve says. “Get organic traffic and see if your product is going to work.” Then — and only then — is it time to look at other paid customer acquisition channels and strategies.
Steve then offers his two cents on working with marketing agencies who “do it all” versus those who “stay in their lane” as experts in one or two specific services. He used to think the one-stop-shop was where all brands should go, but seeing elaborate marketing plans fail with no one piece done in a spectacular way has changed his tune.
Listen to the full interview for more advice Steve gives DTC brands.
Looking to the future, though Steve doesn’t see the prices for ads and customer acquisition flattening out, he does say that Google and Facebook will continue to think up more places where brands can make an impression (i.e., buy ad space), which could open up more competitive possibilities for early adopters.
This DTC conversation with Steve isn’t just for established DTC brands, and it isn’t just for brands entering DTC for the first time. Whether your brand is investing for the first time or re-investing, this interview is a must-listen. For added tips from Google versus Facebook ads to what “capital secure” position brands need to be in before buying ads, Steve Dinelli covers it all.