DTC Dispatch #014

LATEST NEWS

Etsy and Temu’s Super Bowl Ads Present Competing Visions for E-Commerce

During the Super Bowl on Sunday, two e-commerce platforms with very different visions for online shopping, Etsy and Temu, will run ads aimed at distinguishing themselves from the competition. 

• Etsy’s ad will promote a new feature called “Gift Mode,” which uses AI to make it easier for customers to discover and send gifts on the platform’s vast handicraft marketplace.

• Temu’s official ads aren’t yet finalized at the time of writing this, but the China-based company’s 2023 Super Bowl ad featured the tagline, “Shop like a billionaire.”

Our take: Fast fashion companies have been going head-to-head for the past couple of years. It’s no surprise that Super Bowl Sunday will continue to see Etsy and Temu battle it out. Both companies have different views on what value means. This will come out in both of their commercials, which seem to be dramatically different. Who’s POV will resonate most with its consumers?

Why Fast Fashion Can’t Seem to Crack Beauty

When Austin, Texas-based beauty YouTuber Angelica Nyqvist makes a video about a new brand, she usually gets flooded with requests and questions: “Can you do another look?” “Can you try it again?” “Can you use another product?”

But after posting a video about H&M’s newly-revamped beauty line in December, where she demonstrated the brand’s eyebrow pencils, eye shadows, bronzers, mascara and lipstick, the comments were unusually quiet.

“Not a single person has asked me for an update on that video,” said Nyqvist.

The response is indicative of the general apathy that has historically surrounded fast fashion’s beauty offerings, save a few hits, like Zara’s TikTok-favorite fragrances.

Our take: The beauty industry has expanded and adapted over the years, and consumers care more and more about their products and what is in them. It’s one thing for consumers to put ‘fast fashion’ clothes on their body, but some consumers may question the ingredients in these brand’s beauty products and whether they want to use them on their skin. So many beauty brands take pride in the formulas and ingredients in their products, fast fashion brands may not have a place in this space.

Claire’s Assembles ‘Gen Zalpha’ Influencer Group to Guide Creativity

Claire’s unveiled a new influencer platform focused on Gen Z and Gen Alpha, or “Gen Zalpha,” brand ambassadors from diverse backgrounds, according to a press release.  

Dubbed The Collab, the group will guide creative strategy across content, communications and activations, including in-store experiences, with a launch timed to the release of the teen-friendly retailer’s spring collection. Claire’s will add new members throughout the year to share their perspectives and create an ongoing social dialog.  

Our take: Claire’s is making a smart and innovative business move with their ‘Gen Zalpha’ brand ambassadors. This will help them base their creative strategy on their target audience by getting real-life feedback and insights from the people who the products are for. Will other brands follow Claire’s lead and tap into their target audience to help guide strategy?

TikTok’s Anti-Overconsumption Movement is a Wake-Up Call for Brands

In a hyper-consumerist era of social media, flooded with product reviews and shopping haul videos, a backlash to overconsumption is brewing.

More consumers are joining pledges such as the “Rule of 5” (where you limit fashion purchases to five items a year), conducting wardrobe inventories, or challenging themselves to buy nothing new in 2024 and shop their closets instead. “TikTok made me buy it” has become a common refrain for users influenced to make purchases from or on the app. Now, the hashtag #deinfluencing has been used more than 26,000 times, full of content creators working to undo some of that impulsive behaviour.

Our take: With the popularity of TikTok and other social media platforms, consumers are taking social issues to these platforms to make their voice be heard. Brands need to keep this in mind when marketing to these consumers and frame their messaging in a conscious way.

Why e.l.f. Beauty’s CFO Sees Marketing as a Growth Center

e.l.f. reported it’s quarterly earnings for the period ending Dec 31, and saw net sales increased 85% to $270.9 million YOY. This growth is primarily driven by strength in both retailer and e-commerce channels.

The Oakland, Calif.-based company with a huge Gen Z following is working to court more millennials, Gen Xers, and even baby boomers, she said. For example, the brand launched a 15-minute true-crime parody documentary in January that plays ahead of Paramount Pictures’ new film Mean Girls.

Finance chiefs traditionally have viewed marketing as a cost center. But that’s not Mandy Fields’ perspective:

“We invest behind marketing to drive net sales,” Fields explained. “I always take a balanced approach. I never want to get over our skis and invest so much behind marketing that that’s at the detriment of our EBITDA margin. We expect Adjusted EBITDA margin leverage of approximately 200 basis points year over year.”

Our take: e.l.f.’s marketing strategies have clearly been successful for the company, as they have increased their net sales by 85%. Mandy Field’s, e.l.f.’s CFO, discusses the brand’s balanced approach to to marketing and how the company is looking to market to other generations of consumers to grow their customer base. Launching a true-crime parody documentary is a way to connect with consumers outside of the brands typical messaging.

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