4 major trends are seriously impacting DTC e-commerce in 2024. Learn what they are and how to future proof your store.
TL;DR
- Email Marketing gets nerfed by Google, Yahoo and Apple.
-One-click unsubscribe option for every email will likely increase unsubscribe rates across the board.
-Getting marked as spam is more dangerous to your potential ability to email people.
- Ad Costs will rise the closer we get to the US election, especially on Meta and YouTube.
- Five fewer days between Black Friday & Christmas.
- TikTok Shop & Instagram Shop will continue to grow and we’ll see an increase in incentives to shift to their platform.
1. Google’s & Yahoo’s email sending requirements will have a big impact .
Background: Gmail & Yahoo Mail have announced significant changes to their email marketing policies, which go into effect on February 1st. These include mandatory one-click unsubscribe options, lower thresholds for senders to be marked as spam, and additional DMARC validation requirements to be set up on sender domains. Ostensibly, these changes are about removing the worst types of email spam, but they are likely to also affect quality email marketers.
Implications: I expect most brands to see a notable increase in unsubscribe rates and some sort of broad reduction in deliverability. Furthermore, this will compound with Apple’s changes that have reduced some ability to track clicks. These changes will pose a significant challenge for businesses reliant on email marketing.
Potential Risks: Being marked as spam has become more consequential, threatening the sender’s ability to reach their audience.
Strategies for Adaptation:
- This marks the end of the “send the same email to all customers” era. You might have gotten away with it in the past, but now it will be much harder to stay in inboxes after this change. Sending highly relevant email to each customer has never been more important.
Recommendations:
- Start segmenting your lists! Segment your customers into smaller sub-groups based on RFM. Create personalized content to send the right message to the right person at the right time. Segmenting has been proven to be a critical way to reduce unsubscribes & spam.
- Explore alternative channels for customer engagement such as SMS & Direct Mail.
- Explore alternative channels for customer engagement such as SMS & Direct Mail.
- Enhance the value of your email content to reduce unsubscribe rates.
2. Rising Ad Costs from the US Election
Overview: The approaching US election will drive up advertising costs, particularly on platforms like Meta and YouTube. Although most election advertising is on TV, this article from Reuters forecasts $1.2bn of total ad spend with 10% on Meta & YouTube. I suspect it will be higher as traditional TV is far less popular than in previous years, but even $1.2bn of additional ad spend on Meta & YouTube will most certainly be enough to drive up costs significantly.
Implications: Costs will rise as the US election gets closer. The worst affected period is likely going to be the stretch from Labor Day to Election Day (November 6th, 2024). There could be other spikes in ad costs around other primaries, conventions or other tentpole moments, but I would anticipate the bulk of the new money flooding in later in the year.
Strategies for Adapting:
- Consider further diversifying advertising channels to mitigate the
impact . Currently, TikTok does not allow political ads, so they may be relatively cheaper than Meta, especially in Q3/Q4. - Google Search ad costs may not rise as much if your terms don’t overlap with those with election or voting issues. Google PMax will likely suffer cost inflation since it includes Display and other placements.
- Lemons → Lemonade. This an opportunity to try other ways of getting the word out about your brand! I am using this moment to hold brainstorms and assessments for alternate marketing tactics beyond Meta & Google.
3. A Shortened Holiday Shopping Window
Background: In 2024, Thanksgiving falls on November 28th, 2024, so there will be five fewer days between Black Friday and Christmas compared to2023.
Challenges: Conversion rates are typically very high during these days. Since there are 5 fewer days than last year, it will be harder to compare the sales from 2023. You should take that into account when forecasting and consider what can be done to mitigate the effect.
Strategies for Adapting:
- Start BFCM marketing campaigns earlier. Most brands I work with start their Black Friday sales around November 18th-19th, but I recommend going earlier this year (but perhaps not until after Election Day to avoid those high costs mentioned earlier).
- Strengthen supply chain and fulfillment strategies, especially for those last days closer to Christmas. The all-important “Last Day To Order In Time For Xmas Delivery” needs to be pushed out an extra few days. Have sufficient inventory at Amazon and have a plan with your production, 3PL, warehouse, and shipping teams.
4. The Rise of TikTok Shop and Instagram Shop
Background: Social commerce platforms like TikTok Shop and Instagram Shop are growing rapidly, with platforms incentivizing their use.
- TikTok has recently been offering businesses the ability to participate in TikTok-funded “30% off your first order” and TikTok-funded free shipping promotions.
- Instagram incentivizes merchants by reducing ad customer acquisition costs, as long as you set them to click through to Instagram Shop.
- Take advantage of platform-specific incentives and features to enhance sales.
Challenges
- Additional fees down the line: As these platforms are in the “aggressive growth” phase, they are aggressively courting both ecommerce brands and customers with strong discounts. Once brands and customers get used to buying things via TikTok or Instagram, they will reduce the promos and increase fees further. TikTok has already played its hand here and will increase rates from 2% to 6% on April 1st (per The Information).
Opportunities:
- Leverage these platforms to reach new audiences.. Probably your brand won’t win the fight vs Meta so I recommend getting the cheaper customers while they are offering the discounts.
Author Bio:
George Sylvain is a San Francisco-based DTC expert and co-founder of Social Print Studio, known for transforming e-commerce strategies into success stories. Visit his insights on AI and Shopify at www.georgesylvain.com.