Homesick candles

Source: Homesick

For retailers looking to compete with Amazon around its annual Prime Day event, it’s not all about offering deep discounts to catch customers’ attention on the internet.

Start-ups like Warby Parker, Allbirds, Outdoor Voices and Everlane rarely offer promotions. Many of these companies have built their businesses online around a playbook that essentially says: We will never go on sale.

“As a brand, we don’t have sales,” said Brian Berger, CEO of the direct-to-consumer men’s sweatpants maker Mack Weldon. “We have a permanent loyalty program. … And that gets us out of the cycle of having to think about promotions and retraining customers in a way we wouldn’t want them to behave. We want them to shop whenever they want.”

Instead, around Prime Day and through this holiday season, Berger said, Mack Weldon will be boosting its marketing efforts, especially on social media. The brand launched its first-ever television campaign in June, which it continues to run. Its sweatpants have surged in popularity during the pandemic, with consumers looking for comfortable clothing. At one point early on during the Covid-19 crisis, Mack Weldon was selling 1,000 pairs of sweatpants per day, Berger said.

“During the holidays, you have to break through the noise and have a great offer in the market,” Berger said. “And there are other ways to break through the noise,” besides being promotional, he said.

Men’s activewear brand Vuori also launched its first-ever TV ad campaign on Monday.

‘Transcend dealbuster culture’

According to the Harley Finkelstein, president of Shopify, the e-commerce platform for many direct-to-consumer brands including sneaker maker Allbirds, “deals are just one of the things shoppers are paying attention to” during the holidays.

“This is the year that purchases with purpose will transcend dealbuster culture,” he said. “More so than in any other year, consumers will vote with their wallets for merchants that align with their values — choosing to support Black-owned businesses, local merchants, and socially and environmentally conscious brands.”

Cookware brand Abbio won’t be on sale, either, during Prime Day.

“One of the advantages of having a strong direct channel is we don’t need to compete with Amazon on Prime Day,” said Jonathan Wahl, Abbio co-founder and CEO. “It’s a different customer and a different business strategy altogether.”

Prime Day is “all about the ‘deal’ as opposed to the value of the brand or the offering,” Wahl said.

Still, some brands might be choosing to break from the unofficial direct-to-consumer playbook. Some already have — in a bid to try to move inventory piled high in stock rooms and coax consumers to spend a little extra during the global health crisis.

Last month, luggage brand Away held its first sale in its roughly five-year history, promising deals of up to 50% off its bags — some of which retail for more than $400. 

In the thick of the coronavirus pandemic, Away said the sale, which was held both online and in its stores, outpaced the brand’s performance during every prior Black Friday and Cyber Monday combined, exceeding even its “most aggressive expectations.” Some customers reported website outages because of the heightened traffic around the event, while others later reported their shipments were delayed. They took to the company’s official Twitter account to complain.

While Away doesn’t currently have plans for another sale, during the holidays it will be releasing a number of new products, according to Brendan Lewis, vice president of communications and corporate affairs for Away. 

Meantime, apparel brand Everlane also ran a 25% off, sitewide sale during the pandemic, claiming customers could find discounts on items that “usually don’t go on sale.” 

One email sent to customers in March about the event read: “We’ve never done it before. But there are a lot of firsts right now.”

“Most direct-to-consumer brands are nimble enough that they can adapt and roll with the changes that are happening,” said Taylor Sicard, co-founder of Win Brands Group, which owns a number of brands including the candles company Homesick. “This entire year is a great example — brands have had to adapt week by week, month over month.”

Partnering with Amazon

Two of Win’s brands, Homesick and the ring maker QALO, will hold sales, for 10%, 15% and 20% off, around Prime Day this year. Shoppers can actually find both of them on Amazon, in addition to their own websites. QALO has been selling on Amazon since 2014, and Homesick since Nov. 2017.

“A lot of of brands are hesitant to go in that direction, and there is good reason for it,” Sicard said about selling some its products on Amazon. “It is a very restrictive platform. You don’t have analytics on data … and then you also have very limited activity with the audience because Amazon owns the audience, not you as a brand.”

“But the way I see Amazon, I treat it the same way I would a big-box store, just on the internet,” he said.

Some other direct-to-consumer brands agree. The sheets start-up Brooklinen, mattress brand Casper and dog-accessories maker Barkbox can also be found on Amazon.

Benefitting from Amazon’s annual Prime Day surge could be enough reason for some retailers to join its platform. Worldwide sales from the 48-hour shopping event, which kicked off Tuesday, are forecast by eMarketer to jump 43% from 2019 levels to $9.91 billion.

But for retailers not on Amazon, there’s also good reason to compete with another sales event of their own.

Sixty-three percent of consumers say they are “very likely” to compare Prime Day promotions with other retailers’ deals before they make a purchase, according to The NPD Group, which tracks the receipts of more than 130,000 consumers. And this year, with a Prime Day being held in October rather than July, 18% of consumers told NPD they believe they’ll find the best holiday deals around Prime Day, only slightly trailing the 20% of consumers who think that will come on Black Friday. Cyber Monday was the third most popular option in NPD’s poll.

According to Shopify’s Finkelstein, 55% of Shopify merchants believe consumers will start their holiday shopping even earlier this year.

“I do think that, at the end of the day, if you’re going to be promotional, a huge part of maintaining brand equity is the storytelling component,” said Mark Chou, founder of Bradhurst Ventures, which advises consumer-facing brands.

“If you were to just discount and say nothing else, in some ways it’s almost too obvious what you’re doing,” he said. “Consumers are not dumb, and they understand some industries are challenged. But if you’re able to still tell a story around why you’re doing something it can be brand assertive and not dilutive.”

You May Also Like

Rivian R1T EV leasing launches in select markets

Rivian electric pickup trucks sit in a parking lot at a Rivian…

Babies are protected from hospitalization for Covid if their moms get vaccinated, study suggests

Michelle Melton, who is 35 weeks pregnant, receives the Pfizer-BioNTech vaccine against…

Texas blackouts show how vulnerable power grid is to climate change

Cyrus Whittaker, left, and Debbie Orca sit around a fire in the…

Here’s what America’s top CEOs are saying about a possible recession in 2023

In this article UNP UAL GM WMT JPM Follow your favorite stocksCREATE…