The state of the DTC nation report 2024: unpacking key insights and takeaways

Every year, we conduct an extensive DTC brand survey inviting over 1,000 decision-makers and marketers from across the UK and USA to share their two cents about e-commerce advertising. 

We use the survey’s insights to curate an annual report, which guides and informs our direct-to-consumer strategies throughout the year. The 2024 report presents an in-depth look at the current state of the DTC market, focusing on primary challenges, revenue dynamics, and growth marketing strategies. 

This year’s survey drew responses from various industries, including skincare, beauty, health, fitness, fashion, food, beverage, and more. The findings reveal how brands are navigating increased competition, rising costs, new e-commerce trends and shifting consumer behaviours.

Here is an overview of the key insights, takeaways and DTC marketing trends from this year’s survey…

Marketing budgets on the rise

As global advertising and marketing spend continues to grow, brands are increasing their investment in marketing to stay competitive. With a projected 7.7% rise in global marketing spend in 2024, businesses are recognising the need to allocate more resources toward their marketing efforts.

Our survey reveals that brands are following this trend, with a notable increase in marketing budgets. They are not only allocating a significant portion of their revenue to marketing but also prioritising channels that deliver measurable ROI.

The importance of ROI in marketing decisions

Strategic allocation of marketing budget is essential for driving growth and maintaining a competitive edge in the increasingly crowded e-commerce landscape.

The participating brands unanimously agreed that the emphasis on ROI is more critical than ever. Businesses are no longer just spending on marketing because it’s a necessary expense; they are investing in marketing as a core driver of growth. This shift in mindset is reflected in the strategic allocation of budgets toward channels that are not only cost-effective but also capable of delivering tangible results.

Our survey found that businesses are increasingly prioritising channels that allow for clear measurement and optimisation. This trend is particularly evident in the growing investment in data-driven marketing strategies. By leveraging data analytics, businesses are tracking the performance of their campaigns in real-time, making adjustments as needed to enhance effectiveness. This level of insight and adaptability is what sets successful DTC brands apart in today’s competitive landscape.

Rising competition and costs

The competitive e-commerce marketing landscape is driving costs up, particularly in paid media. Meta’s CPM has fluctuated but remains high overall. 

Paid search continues to be a top-performing channel for fashion retailers but presents challenges for the food, beverage, health and fitness sectors due to escalating costs. To navigate this high-cost environment, diversifying the marketing mix and exploring lower CPM platforms is recommended.

Navigating platform changes

Email marketing faces new challenges with updates from Google and Yahoo, including stricter spam filters and enhanced privacy features. However, marketers can navigate these changes by focusing on compliance, list management, and authentication to ensure effective email deliverability

Overview of top and underperforming marketing channels

According to our survey, some marketing channels emerged as clear winners, while others struggled to deliver results. 

• Email marketing stood out as one of the most effective strategies for DTC businesses, offering high personalisation, cost-efficiency, and strong direct communication with customers. A powerful tool that brands are leveraging to maximise engagement and conversions in 2024.
• Organic social, on the other hand, proved to be less effective, often hindered by low reach and engagement challenges.
• Paid social offered mixed results, performing well for some sectors but underdelivering for others. Businesses are finding success by focusing on detailed audience segmentation and innovative content strategies.

Reasons to be hopeful

Despite some challenges, there are several reasons to be optimistic 

• The global e-commerce market is expected to surpass $5.8 trillion in 2024, indicating robust growth potential. 
• According to the OECD Economic Outlook 2024 report, signs of economic recovery are evident, with consumer confidence and spending rebounding.
• Consumer spending on brands is expected to rise by 15% in 2024 as digital shopping habits become more entrenched and the economy stabilises.
• Social commerce platforms like TikTok Shop are revolutionising consumer shopping behaviours by integrating entertainment and e-commerce, which is expected to grow by 20% in 2024.