eCommerce had a bumper 2019, with sales during the holiday season growing by more than 18 percent over 2018. While retail marketplaces like Amazon accounted for a large chunk of that, DTC brands definitely played their part in the booming holiday season. Many digital-native brands have approached retail holidays with skepticism in the past. In 2019, some big eCommerce brands remained firm in opposition to Black Friday sales and Cyber Monday pricing strategies.
Here’s how three leading brands made the most of the 2019 holiday shopping season anyway.
Cards Against Humanity’s Black Friday
Cards Against Humanity has a history of tongue-in-cheek Black Friday events. In 2018, the company ran a 99% off sale, selling items like a $20 bill and life-sized cut out of Orlando Bloom. In 2016, the company crowdfunded the digging of a massive hole for no reason whatsoever.
In 2019, the company pitted its team of writers against an AI algorithm to see who could write the best-selling cards. If the writers won, they’d get a $5,000 bonus. If the AI won, the company said (jokingly) that the writers would lose their jobs.
The competition was live-streamed for 16 hours on a separate domain that allowed users to vote for their favorite cards and buy the packs of cards created by each team. The event didn’t just gather international media attention for the brand. The company also sold more than $190,000 worth of products.
The AI had a genuine algorithm built on top of the GPT-2 neural network, explains Junior Software Engineer Tami Reichold. It works by predicting words that would naturally follow each other. “By predicting many words, it assigns a probability distribution and uses this in order to select the next word, which randomizes the whole process, making it creative and original,” she explains.
The AI came trained with 40GB of internet text, equivalent to 40,000 books. Cards Against Humanity then added to this by making the AI study 2,000 official cards, 25,000 internal brainstorming cards and 17,000 unofficial fan-created cards. “The AI began to process — and the company began to filter out cards by looking at the format, potential banned words/jokes, similarity to other cards or just some weird stuff like ‘~~~~~~~~~~~~~ meh’, for example,” Reichold writes.
TechSpot’s Isaiah Mayersen noted that both the writers’ and the AI’s cards sounded “authentically Cards Against Humanity.” Had their cards been mixed together, it would have been tough to tell who wrote what. There were a couple of distinguishing features, however. One was that the AI wrote much dirtier jokes. The writers’ jokes tended to be more meme-based and political.
Oh, and if you were wondering, the human writers won by a hair, selling 2% more than their AI competitor.
No Discount, No Problem: Allbirds’ Big Singles’ Day
Singles’ Day on November 11 is the biggest online shopping event in the world. The event has been running since 2009, explain The Washington Post’s Anna Fifield and Lyric Li, when Alibaba decided to start marketing it as the day to shop online.
Singles’ Day 2019 shattered all previous spending records, racking up more than $38 billion of purchases, reports Bloomberg’s Lulu Yilun Chen
Any brand that had partnered with one of Alibaba’s eCommerce platforms had the chance to cash in, and shoe brand Allbirds was no different. Despite being a DTC brand in the U.S., the San Francisco brand partnered with Alibaba-owned Tmall.com in order to raise awareness and facilitate online ordering, explains the team at Xinhua.
Allbirds is famous for not discounting any of its products, and its Singles’ Day campaign was no different. Despite running no discounts and selling everything at full price, the shoe brand had a record sales day on 11/11, reports NRF contributor Peter Johnston.
How did Allbirds do it? It was about using Singles’ Day as an educational tool, says Erick Haskell, President of International Business at Allbirds. Rather than push deep discounts, the company used the day as a way to let Chinese customers know what Allbirds is all about. The tactic paid dividends: Haskell says Singles’ Day 2019 was the brand’s best sales day since the company launched.
Everlane’s Post-Christmas Sales
The days following Christmas are traditionally a time when retailers slash prices on thousands of overstocked products. Everlane isn’t your typical retail brand, however. The company doesn’t do discount sales. Instead, it offers customers the chance to Choose What You Pay, an online event that the company has been running since 2015.
The post-Christmas sale was Everlane’s biggest such event, write Business Insider’s Connie Chen and Emily Hein. More than 600 women’s products and 200 men’s products were listed, including some of the brand’s most popular styles.
If you haven’t heard of the event, you could be forgiven for thinking customers have free rein over how much they pay. They don’t. Each product comes with three price points, explains Good Housekeeping’s Shanon Maglente. “The lowest price covers the basic costs to develop, produce, and fulfill the product; the second lowest price covers the mentioned costs with the additional sum going to office overhead; and the highest discounted price covers the same costs along with costs for future product development.”
The company stresses that it isn’t actually a sales event, notes InsideHook’s Kirk Miller, though you can save up to 35% on a range of products. That’s if you opt for the cheapest price. Choose a higher price, and you’ll save around 10–20%, but you’ll also help cover the brand’s overheads and invest in future development.
The company’s strategy is all about transparency, writes CNN’s Chelsea Stone. Everlane is trying to give customers a great deal while being as clear as possible about where their money goes.
Transparency is one of the reasons this pricing strategy has been so effective, writes Prisync’s Jordie Black: “They don’t try and pretend like the money goes somewhere it doesn’t. They also don’t try and force you to pay more than you want. If you really wanted to pay the lowest price, you’re well within your right and Everlane would still value you as a customer.”
As a result, Black says it’s safe to assume more than a few customers opt for one of the higher prices.
Go Into the Next Holiday Season With an Informed Strategy
It’s easy for DTC eCommerce brands to give into the temptation to slash prices during the holidays. We all grew up expecting to find good deals from brands and retailers alike during the holiday season.
For DTC brands, however, this somewhat undercuts the brand’s very positioning. After all, direct-to-customer sales is all about cutting out intermediaries and passing the savings along to customers, notes Sucharita Kodali, Principal Analyst of eBusiness and Channel Strategy Professionals at Forrester Research. Discounting products further makes that USP seem a little suspect.
Further, Kodali says, smaller DTC brands might not want the volume sales (and the headaches that come with volume) that come with holiday discounts. For many DTC brands, big or small, it might be better to spend the holidays focused on things like customer service and customer delight — the things that make people loyal to your brand.
As the three companies above demonstrate, you can find success without slashing your prices. In fact, choosing to zag during the 2020 sales season could be the best marketing decision you make this year.