Two weeks ago, we wrote in this space about how returning customers growth looked a lot different than overall DTC CPG growth.
Now, the numbers for Q2 and the first half of the year are final. In Q2, new customer acquisition declined 8% YoY and returning customer revenue increased 25%. (Q1 didn’t look much different.)
There’s plenty of ways to react to this data and we’ll withhold (mostly) from that until we have an opportunity to look more closely.
But there’s one question that’s worth posing: Is DTC likely to become a loyalty channel for CPG brands?
While DTC businesses are facing headwinds right now, it could be argued that many of those headwinds have always existed—and that cheap advertising artificially elevated the ceiling for new customer acquisition (remember all the “arbitrage” talk a few months ago?).
This question about DTC’s role, it seems, is worth asking, because it fundamentally changes everything from growth plans to merchandising decisions to product R&D.
Perhaps surprisingly, we don’t have much to say on this topic yet, as we’ve just begun thinking about the topic and what this might mean. So, for today, we’ll leave you with the question: If DTC’s more likely to become a loyalty channel for most CPG brands, what does that mean for you?