DTC616: Pros and Cons of Subscription Business Model

Good morning,

After five years of negotiation, more than 90 countries have signed a global ecommerce agreement endorsed by the World Trade Organization.

The agreement states that these countries will recognize each other’s e-signatures, ending the use of most paper documents. These rules will also safeguard against online fraud and misleading product claims.

Read the full story in our Quick Hits section below!

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Here’s what you’ll find in today’s DTC:

🤔 Does a subscription model make sense for your business? We weigh the pros and cons.
🧼 Scaling skincare segment by segment – Soft Services' data-driven growth strategy with Tresl Segments.
🎄 And…has holiday shopping already started? Here are some seasonal items that are seeing an uptick in sales already.

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You’re reading this newsletter along with new subscribers from: ZappyCards, Habitat Pets, and DraftKings. 👋

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🔥 Looking To Add Some Fuel to the Fire For Q4? Here’s How DTC Brands Are Scaling Influencers and Content Creation

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Want a peek at how some of the fastest growing DTC brands are scaling influencers and content creation? 👀

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🤔 Does ‘Subscribe And Save’ Make Sense For Your Brand?

Is pushing subscriptions right for your product market fit?

Face it: This generation has trust issues. 💔

Consumers are rarely willing to opt into the subscription method, even if it means saving money. Most of this generation has been burned by sketchy subscription services that were impossible to cancel, making offering and retaining subscriptions a little bit more difficult.

Subscriptions are great from a business perspective. Who wouldn't want recurring revenue?

However, Pilothouse says it’s important to take a step back and ask if this is the right fit for your product and if it's better to invest efforts elsewhere for greater or equal returns.

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Some questions to ask your audience when pushing subscriptions:

• What types of products and categories do you currently subscribe to?
• What features or benefits motivate you to subscribe?
• Do you ever subscribe just to get the discount and then unsubscribe after?

Pushing a subscription offer can be an uphill battle if it's not the right fit for your brand.

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Here are some counter moves to bring in the same ideal revenue.

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1️⃣ If your audience is motivated by the initial first-time subscription offer but cancels it right after... Think about offering the same offer as an evergreen first-time purchase offer that is obtained only through paid ads and with email capture.

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2️⃣ If consumers aren't motivated by subscription to the product category… Try bundling.

Mass bundles can even work (e.g., Buy 3, get 2 free, etc.). Especially for products that are common for repurchasing, it's hard to know the exact date that the consumer will need to repurchase or reuse the product, as the rate of use varies by consumer.

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3️⃣ If you're dead set on pushing subscriptions… make sure you have a strong email retention flow and pad your retargeting audiences who have already purchased to convert to subscribers.

😏 Scaling Skincare Segment by Segment – Soft Services' Data-Driven Growth Strategy with Tresl Segments

"Soft Services, like many small companies, may not have a dedicated data team, but with Tresl's help, we can operate with the sophistication of a much larger organization."

– Rebecca Zhou on the Role of Data in Small Businesses

This week on the DTC Podcast, we were joined by John Chao from Tresl, as well as Rebecca Zhou and Stephanie DiSturco from Soft Services, to explore how using data effectively can drive growth and profitability for DTC brands. 👏

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🎙️ In the episode, you’ll hear about:

• Unlocking the full potential of your data to make informed decisions that drive growth
• How Tresl can help smaller businesses implement the data-driven decision-making once reserved for large corporations
• The importance of digging into your data and not always fully trusting front-end data alone
• How Soft Services uses Tresl Segments to maximize their retention efforts and surprise and delight their customers

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Data isn’t just a ‘nice-to-have’; it’s a must-have for brands of all sizes. Making sense of your data gives your brand the direction it needs to invest and scale wisely.

To hear more about how Soft Services is making the most of their data with Tresl, you can:

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Listen to the full episode here. 🎧

OR

Continue reading here. 📖

🌐 IN THE SOCIAL SPHERE

Shopify President Harley Finkelstein shared this eye-opening stat on X.

Even though the weather is still scalding hot, customers are already starting to prepare for the winter holidays, with advent calendars seeing the biggest growth in sales.

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❓ When do you start your holiday shopping?

• Already started collecting ornaments!
• Not until spooky season.
• During BFCM
• Last minute December shopper here

⚡ QUICK HITS    

✍️ WTO countries sign global ecommerce agreement to ban tariffs and recognize e-signatures.

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💸 MERGERS & ACQUISITIONS

• Canva acquires Leonardo.ai, a generative AI research and content start-up.
• Flo Health raises $200 million at an over $1 billion valuation.
• Gumloop secures $3.1 million in seed funding to grow its no-code AI platform.
• Premium beauty brand Summer Fridays secures strategic growth investment from TSG.

📥 Got a B2B Biz?

Join dozens of B2B companies finding demand-gen success through our niche community of 160k brand leaders and founders this year. Talk to our team to learn more.

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Have you heard our latest podcasts?

• 🥟 Jen Liao on How MìLà Became a Nationwide Frozen Food Brand
• ✉️ AKNF 425: How To Fix Email Automation and Improve Retention
• 🍺 Duncan Frew on the Whisky Business and Return of The Rascal
• ⚡ AKNF 423: Optimize Post-Click Experience With Landing Pages
• 🕶️ Parker Godfrey on How Kiaura Went Viral on TikTok Shops
• 😆 AKNF 421: Grow Top Of Funnel With Humor and Controversy

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Don’t forget to rate the DTC Podcast on Apple (⭐️⭐️⭐️⭐️⭐️)

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DTC Newsletter is written by Rebecca Knight and Frances Du. Edited by Eric Dyck.

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Please note that items in this newsletter marked with * contain sponsored content.