📦 - The Water Bottle Drama...

DTC 485 - Water Bottle Beef, Amazon Earnings, Mindset-Changing Questions Friday, February 2, 2024 Good morning, It looks like TikTok is now testing 30-minute videos. The social media platform has been rolling out longer and longer video formats for the past few months to attract more advertisers. Longer videos mean there are more opportunities to insert mid-roll ads and a chance for brands to get some more exposure on the app. Don’t overlook TikTok if you are looking to grow your brand in 2024. Here’s what you’ll find in today’s DTC: - Hydro Flask’s strategic response to the Stanley Cup lead controversy - Amazon shatters records: A game-changer for brands and advertisers - Ask these five questions to live a purposeful life You’re reading this newsletter along with new subscribers from: CLE Clothing Co, Beem Light Sauna, and Red Rock Realty. 👋 This newsletter is brought to you... IN PARTNERSHIP WITH PILOTHOUSE 🍄 Four Sigmatic Is The #2 Best-Selling Ground Coffee on Amazon… Here’s How They Did It The moment all brands dread… plateau. When Four Sigmatic’s spend and scale started flattening, they knew they [needed to make a change](. Thus, Four Sigmatic and Pilothouse came together to give their Amazon game a serious boost, focusing specifically on Pay-Per-Click spend. SEO and CRO strategic alignment first led to the revamp of product photos, descriptions, and A+ content. To zero in on the middle and bottom of funnel, Pilothouse (1) utilized sponsored product ads to reach customers, and (2) did product line segmentation to target and retarget different customer groups. 870+ campaigns with bids managed daily has yielded Four Sigmatic: - ROAS 25% greater than target ✅ - A 115% increase in monthly gross profit ✅ - An 83% increase in monthly shipped revenue (at 7-figure/month levels) ✅ - A 99% increase in YoY active subscribers ✅ 🛑 Stop ignoring Amazon as a scale channel. [Book Your Exploratory Call]( 📰 NEWS - TikTok highlights [new #ShopBlack initiative]( for Black History Month. - Amazon records their [fastest ever global ship speeds in 2023]( for Amazon Prime members. - Shopify’s [new AI image editor Magic]( makes your product shots look perfect. - Universal Music Group has [officially pulled their music catalog]( from TikTok due to a licensing dispute. WATER BOTTLE BATTLE 💦 Hydro Flask Response to Stanley Cup Lead Controversy Looks like the water bottle brands are beefing. The story Some social media users this week shared that they conducted at-home lead testing on their Stanley Cups and claimed the beloved cup tested positive for lead. 😨 In response, Stanley Cup [put out this statement]( on their website to dispel the rumors: "At Stanley, one of the key features of our products is our vacuum insulation technology, which provides consumers with drinkware that keeps beverages at the ideal temperature. Once sealed, this area is covered with a durable stainless steel layer, making it inaccessible to consumers. Rest assured that no lead is present on the surface of any Stanley product that comes into contact with the consumer nor the contents of the product." Later on, the manufacturer admitted that [there is “some lead”](. It just isn’t present on the surface of the cup. In response, consumers are questioning if they should ditch their Stanley Cups for an alternative. Stanley Cup’s competitor [Hydro Flask]( was quick to jump on this scandal and use it as an opportunity to deliver a well-timed message of their own. They took to Instagram with this post which reads: “For over a decade, Hydro Flask has not had lead in our sealing process. In 2012, we pioneered a new process that sealed our bottles without the use of lead. We aim for a higher standard.” [Hydro Flask’s Instagram post addresses consumer’s lead concerns] The impact? The Hydro Flask post generated lots of engagement on social media by differentiating their product in a very competitive market. 📈 The post also did a great job of rallying Hydro Flask fans together and leveraging a viral moment to build customer trust with their transparent messaging. Safety first. Who knew water bottles could cause so much drama… Are you Team Stanley or Team Hydro Flask? AMAZON Q4 EARNINGS 📈 Amazon Shatters Records: A Game-Changer for Brands and Advertisers Yesterday Amazon hosted their latest earnings call highlighting Q4 2023. The [Pilothouse Amazon team]( took notes to make sure you got first dibs to all the info. 🤝 The call was nothing short of spectacular, revealing: - A leap to $170B in revenue - A profit turnaround to $10.6B for Q4 2023 — after a $0.1B loss in Q4 2022 This marks a dramatic 14% year-over-year growth in revenue, and a monumental rise in profitability. Let’s break it down 👇 This past Q4 included a record-breaking BFCM (Black Friday/Cyber Monday) with over a billion items sold. Third-party sellers on the platform took the spotlight, contributing to more than half of the sales. What does the shift to third-party represent? Amazon's pivot towards empowering sellers: - Third-party seller services revenue jumped a massive 19% YoY to $43.5B. - Amazon’s own product sales had a considerable 8% boost. Seeing the breakdown, it becomes evident that through high-margin referral and fulfillment fees, Amazon's rising profitability is being driven by the growth of third party sellers. Amazon’s continued investment into the expansion of logistical capabilities, with same-day shipping now available in 110 U.S. metropolitan areas and implementing the expectation of 1-2 day standard shipping, makes the platform an attractive place for brands to be. The heavy investment into logistics and building consumer expectations solidifies their rank in the eyes of consumers, keeping brands like Temu, TikTok Shop, and even Walmart at bay. ☄️ Advertising's Meteoric Rise Amazon's recent announcements of numerous new initiatives has placed advertising at the forefront of discussions. Streaming TV campaigns, Prime Video ads, off-Amazon Sponsored Product ad delivery, and a plethora of improvements to Sponsored Product and Sponsored Brand ads are making Amazon's advertising platform irresistibly attractive to brands. Thanks to the unparalleled attribution capabilities afforded by owning both the content channels and the marketplace, as Amazon expands their ad tech and reach, it becomes a very attractive (possibly the most attractive) ad platform. Amazon's advertising strategies have proven effective, showing a 26% increase in ad revenue to $14.6 billion in the fourth quarter alone. This growth is part of a consistent trend throughout the year, with annual ad revenue rising from $37.7 billion in 2022 to $46.9 billion in 2023, marking a 24% increase. 👀 The numbers look strong… What does this actually mean for brands? Amazon gets a bad rap for being the bane of small businesses, but their recent efforts to enhance seller services and advertising options have significantly improved its appeal as a platform. These initiatives now offer small businesses an extremely attractive avenue for bringing their products to market. Prime Video advertising options and advanced ad technologies offer significant growth opportunities for larger brands both on and off platform. Of course, all of this growth has also made Amazon extremely competitive for brands, leading to reduced profit margins for brands as advertising costs increase. The competition on Amazon can seem daunting… But trust us when we say the competition feels like a walk in the park when you’ve got [the right team by your side](. 🌳 🧰 THE TOOLKIT 🦾 Pivoting to generative AI for your marketing processes? Sure, the hype is real - but do the results match the hype? Read the [Northbeam 2024 Marketing Preview]( and see for yourself. * ✍️ Wanna see how your ad copy stacks up against it’s competition? We recently played around with the free feature on AnyWord and had fun with it! [See for yourself](. SPONSOR DTC 📥 Promote your product to 160,000 digital marketing professionals DTC Newsletter + Podcast reaches a highly qualified audience of Shopify merchants, eCommerce founders, and digital marketers. [Talk to our team to learn more](. 🌐 IN THE SOCIAL SPHERE If you need some guidance here are five questions to ask yourself so you can have a positive mindset and a future that makes you happy. Can't view the image? [Click here]( 👀 BANTER When you find someone who also gets the midnight munchies. 🥲 💗 Have you heard our latest podcasts? - 🥟 Eric Ji Sun Wu’s [Entrepreneurial Journey with Sobo Foods]( - 💗 [AKNF 373:]( The Art of Valentine’s Day Advertising - ⭕ The Rumpl and Houdini [Partnership Story of Innovation and Sustainability]( - ❌ [AKNF 371:]( Biggest Amazon Return Mistakes - 🥘 Danielle Walsh and Steph Chen from cookware brand [Anyday on the Power of Storytelling]( Don’t forget to [rate the DTC Podcast]( on Apple (⭐️⭐️⭐️⭐️⭐️) DTC Newsletter is written by [Rebecca Knight]( and [Frances Du](. Edited by [Eric Dyck](. Was this email forwarded to you? Sign up [here](. NEED MORE DTC? 🚀 [Advertise]( in DTC Newsletter. Please note that items in this newsletter marked with * contain sponsored content. [Direct To Consumer]( Pilothouse, 1011 Government St., Victoria, BC V8W 1X6, Canada [Advertise with DTC]( | [Work With Pilothouse]( [Unsubscribe](