DTC Dispatch #015

NFL Monetizes Swifties, Beyoncé Launches Hair Care, and Estée Lauder's Empire

 📆 It’s been a busy week!

This week in DTC Dispatch:

👠 Fashionable fan apparel is still an untapped market for the NFL

🏈 Brands cash in on most-watched Super Bowl in history

💄 How Estée Lauder built her $50 billion empire

📈 Most VP/PE firms don’t know how to assess your DTC channel


Fashionable fan apparel is still an untapped market for the NFL

It started as a fun project. A white bodysuit, emblazoned with Cincinnati Bengals quarterback Jake Browning’s number and initials.

Taylor Damron had made it for her cousin, Browning’s girlfriend Stephanie Niles, to wear to the Jan. 7 game against the Cleveland Browns. Then, the outfit went viral.

“The next day, I woke up, and the world had kind of fallen in my lap,” Damron, 29, says.

Damron’s design rocketing to internet fame is just one story of how women’s fan apparel has found itself in the spotlight. Just a few days later, Taylor Swift would don a red puffer jacket with boyfriend and Kansas City Chiefs’ tight end Travis Kelce’s number for his game against the Miami Dolphins. Within a month, that jacket's designer, Kristin Juszczyk, would score a NFL licensing deal.

These success stories have illustrated the potency of a market for women’s sports apparel that merges fashion and fan culture.

Our take: The NFL season and Super Bowl 2024 has seen an influx of new fans thanks to Taylor Swift’s involvement with Travis Kelce and the Kansas City Chiefs. Not only are die-hard football fans going to and watching the games, fans of Taylor Swift are equally as devoted to catching glimpses of the superstar on the big screen. This has also opened up an untapped market into NFL fan fashion. Fans don’t just want to wear oversized jerseys and sweatshirts. The market for fashion in the NFL is going to continue to grow and be sought after by fans of all types.

Brands cash in on most-watched Super Bowl in history

Sunday’s Super Bowl was one of the most-watched television events in history with a staggering 123.4 million viewers, outpacing last year’s record of 115.1 million according to Nielsen and Adobe Analytics. That figure was the maximum number of people watching at one time. It’s estimated that there were more than 202 million watching throughout the telecast, a 10% bump from last year’s Super Bowl at 184 million.

Temu specifically swung for the fences after making its Super Bowl debut last year, and between January 2022 and November 2023 has increased its advertising budget 1,000%, according to Mediaradar. For this year’s Super Bowl, companies spent an average of $7 million for a 30-second ad, but Temu doubled down and did $15 million in giveaways.

Our take: As discussed in last week’s newsletter, Temu wanted to come out swinging at this year’s Superbowl, competing with other fast-fashion companies such as Etsy. They increased their advertising budget dramatically, and made a huge presence during the commercials of the Super Bowl. I’m not sure if the ads would be considered good quality, but they were definitely talked about. All publicity is good publicity, right?

Beyoncé to launch hair care brand later this month

Beyoncé is launching a hair care line called Cécred on Feb. 20, according to a post last week on the singer’s Instagram account.

While exact details about the line have yet to be revealed, the company in June 2022 filed a trademark request with the U.S. Patent and Trademark office and was approved to produce hair care, candles, vitamins and hair growth stimulants, electric hair styling tools, hair brushes and combs, pillowcases, sleeping garments and more.

Beyoncé joins a growing list of celebrities launching brands, especially in the beauty space. According to a JLL report released last summer, 53% of all celebrity retail brands fall within the beauty category.

Our take: Beyoncé had a huge week last week on social media and at the Super Bowl. Not only did she announce on Instagram she would be launching a hair care line, she also announced during the Super Bowl that she would be releasing an album. Her new song she released off the album has been all over social media, especially TikTok, and has gained her a lot of publicity.

Estée Lauder's Obsession

Estée Lauder is an American icon. Today, her namesake company is worth more than $50 billion. She built her beauty empire face by face.

Estée’s interest in beauty came from her mother. Estée was “mesmerized by pretty things and pretty people” and “dreamed of being a skin specialist and making women beautiful.”

Estée’s entrepreneurial break came at the House of Ash Blondes, a beauty salon owned by Mrs. Florence Morris. After Mrs. Morris inquired about how Estée kept her skin so “fresh and lovely” Estée came back less than a month later, demonstrated her products on Mrs. Morris, and created an opportunity for herself.

As Estée’s clientele grew, she knew she had to expand beyond a one-woman operation, so she started to hire saleswomen. Business growth was gradual at the time, but steady, and, because of the one-on-one sales method, she was developing a devoted clientele who even started calling department stores asking for Estée’s products.

In 1947, Estée’s persistence with one of the buyers at Saks Fifth Avenue paid off with a small order for $800 worth of merchandise and she closed down her counters at Florence Morris and Albert and Carter to focus on Saks. Saks Fifth Avenue was just the start for Estée. She entered the big leagues, but now it was time to see just how far she could grow the brand. From new department stores to new product lines to expanding internationally, the growth was fueled by ambition and unrelenting persistence. Not to mention a simple but brilliant sales strategy.

Our take: Estée Lauder is one of the most iconic and influential beauty brands of our generation. To learn the history about the company and where it got its start is fascinating. The article showcases just how different businesses were back then, and how far they’ve advanced in today’s society. It is an inspiring story of how one woman transformed the beauty business industry.


Most VC/PE firms don't know how to assess your DTC channel

Ryan Rouse, CEO of HighKey snacks, discusses how firms should assess a brand’s DTC channel:

  1. Build a methodical process for how you view and optimize the channel

  2. Show them your average revenue growth per customer from initial order to 3 months, 6 months, and 12 months

  3. Strip the variable costs out of the revenue cohorts, then add your blended CAC (by month), so they can see how long it takes each cohort to break even from a contribution margin perspective

  4. Show them how much contribution margin you get per customer per cohort at the same 3 month, 6 month, and 12 month time periods (and beyond)

  5. Then show them your operating plan and the drivers of those

Our take: Rouse’s thread on Twitter goes into detail about how to assess your DTC channel. It provides a ‘hell of an opportunity’ for you as a brand owner.


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👍️ Have a great week!
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