The anti-tracking headaches!

Startups in specific are bound to fail if they don’t rework the customer acquisition models.

The rising cost of customer acquisition, non existing offline modes are making D2C brands replan their budgets, strategies with uncertainties hanging over their heads.

Following Apple, Google is also planning to deploy its privacy initiatives, including the phase-out of third-party cookies, in 2023.

“I think it’s a scramble,” said Alex Song, CEO of growth acceleration platform DojoMojo. “We’re approximately four or five months into the thrash, and I think everyone’s trying to figure out where to allocate their capital most effectively.”

Historically, DTC brands have deployed a large part of the marketing budgets on third-party channels like Facebook, Google to build brands and drive traffic. With new regulations (like iOS updates, Government policies, etc.), DTC brands and specifically start-ups are having severe troubles informing future merchandising decisions without data on the effectiveness of their ads. Moreover, without efficient ad targeting, the cost of customer acquisition is bound to go up.

Consumer privacy updates & policies come at a hefty cost for DTC brands


In its recent IPO, Allbirds revealed that it spent $55.3 million in marketing-related expenses in 2020. That’s 25% of its net revenue and up from $44.4 million in 2019. Casper spent $156.8 million on advertising expenses in 2020, about 32% of its net revenue, and $155 million in 2019. Wayfair spent $1.4 billion in 2020, roughly 10% of its net revenue, and $1.1 billion in 2019.

“If your advertising becomes less efficient, then that certainly has an impact. It means that there are more ways that your cost per acquisition goes up,” said Andrew Frank, research vice president at Gartner. “There’s a lot of friction, I would say, that this adds to the whole process of building brand relationships with customers.”

The high cost of growing their customer base certainly hasn’t stopped new DTC brands from emerging in different categories. In response, DTC brands have been trying to one-up each other by allocating a significant portion of their budgets toward advertising, constantly pushing their marketing tactics, and using humor and various creative ways to set their brand apart.

On top of that, traditional brick-and-mortar retailers are also trying to break into the DTC space — and they bring with them a trove of loyal customers that digitally native brands may not have. Nike and Under Armour have expressed a desire to grow substantially in the channel, while Adidas outlined plans for DTC sales to make up 50% of its revenue by 2025.

Large-scale traditional brands, who have a loyal customer base and bandwidth will be able to collect data directly (first-party data), but these factors will work negatively for D2C brands.

How can you (still) win?

Work on new channels. Basis the phase of buyers’ journey, improvise on channels.

Evolve content engines! It was a long due for the industry and will be an essential business-saving skill/strategy without quick methods like ads.

Make a bond with the customer! They are the ones who will make you survive and thrive—no one else.

Credit: Retail Dive, Maria Monteros




15 Years in Digital Marketing & Technology | Currently in E-commerce, Digital Assets, and Metaverse space | Expertise in business growth & team management

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Where did Capital Radio start? An introduction to radio history

App Marketing in Nigeria: Getting People to Download and Use mHealth Apps

Governments are finding new ways to work with entrepreneurs — is yours?

Harnessing the Digital Revolution

Key Takeaways from Leading the Product

Importance of technology to improve efficiency & increase your profit

“SELLING FAKE DIVERSITY: Amazon Jobs Deny Ex Cons and Parolees, How Good Marketing Lies, And Why…

Around the world in 7 days: e-Residency Week 2019

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Agam Chaudhary

Agam Chaudhary

15 Years in Digital Marketing & Technology | Currently in E-commerce, Digital Assets, and Metaverse space | Expertise in business growth & team management

More from Medium

Accidental Entrepreneur: Don’t Even Think About Startups without understanding these 5 Financial…

You might be thinking that its easy to perform a Twitter Trend Or How much it cost to do a Twitter…

The 5 Things I Learned About Business Partnerships

From Micro to Macro: 4 Cravings You’ll Generously Indulge with Zero Guilt