Forward
One of the most important things a brand can be doing right now is pulling demand forward.
(There are nuances and caveats and exceptions, of course, but that doesn’t make for a good hot take. So, allow me to stick with it for a minute.)
I see two main reasons for this:
The first is a tactical, business operations reason: If you have a good amount of pre-tariff inventory on hand, you can maximize your profit dollars by selling through more inventory now. That puts you in a better cash position to fund your next shipment (which will likely require more cash, given tariffs).
The second is more oriented to two macro environment reasons that seem to be colliding: Consumer sentiment is dipping and, as that happens, lower-priced alternatives will grow in popularity. And, as that happens, certain category purchases get lumped into other purchase events (Amazon orders, Target or Walmart runs, grocery store trips, etc).
Every consumer is different, of course, but if you’re a DTC brand that sells in a specific category, that can mean you get competed out not just on price, but convenience. Losing one of those battles is usually doable as you fight for growth. But losing both? That’s really hard.
So, pulling demand forward—i.e., getting a customer to buy more now to use later—is a pretty important thing. Capture those sales before you run the risk of your customer going elsewhere for a category alternative.
I was thinking about these macro environment developments as it relates to the Loyalty Benchmark Report I mentioned last week. That report frames how loyalty programs create a lever that allows you to still compete on price (or, probably better stated, value) as consumer sentiment slips.
Critically, especially right now, it actually reframes loyalty from the normal “boost LTV” and “reward your best customers” talk you normally hear from SaaS vendors to loyalty as a merchandising lever.
I really liked this excerpt from early in the report:
At their core, loyalty programs are merchandising programs. They are programmatic, structured offers that give richer discounts and rewards in exchange for richer spend. So, we measured them the way you already measure your discount offers:
Did the customer spend more money?
Did the customer try a new product?
Did the customer spend more again later?
In other words, can loyalty programs pull demand forward? The answer is yes. But the answer is also better than that: It can also create incremental demand.
I’ll let you dig into the data yourself, but I thought this part was worth calling out and helping frame the value of this report around. While the data in it will help you rethink your existing loyalty program structure, it’s this piece—the reframing—that I think is most important, because it will change the way you measure your program in the first place. And that’s important, because no one needs to “boost LTV” or “reward customers” when consumers aren’t spending as much money and COGS are doubling overnight.
No; in those situations, you need to move units. And, as our report shows, when a loyalty program is designed correctly, it can do just that.