August and September are peak months for retail marketers to plan their holiday campaigns. P.S. Did you know Black Friday is less than 100 days away?! 🤯
While big box retailers spend millions on TV ads and printed circulars, there's a powerful channel DTC brands should consider: Affiliate marketing.
DTC businesses, particularly the digital native type, have succeeded because they’ve owned the customer journey nearly from the beginning to the end. These companies sought marketing channels that gave them the most possible leverage.
Often those channels were:
- Social media.
- Performance marketing with Google, Meta, TikTok, and similar platforms.
While no DTC brand should ignore these growth channels (they’re the foundation of success), the holiday season may be a good time to add affiliates who can generate significant additional revenue.
The creator affiliate
Affiliate marketing is a type of performance-based marketing in which a business rewards an affiliate for each sale they deliver. Repeat: You only pay when a sale is made.
Athletic Greens, who are killing it as a foundational nutrition brand, use affiliate relationships with many of the podcast and newsletter creators they sponsor.
The deals are designed for affiliates to help promote the company's AG1 product and reach new audiences.
These are not your grandpa's affiliate programs. You’re not posting about your brand on an online marketplace in hopes that some person working from their babushka's basement will put up a one-page website, slap on your banner, and magically increase sales.
Modern affiliate marketing is built on the creator economy.
Economies arise to address scarcity in the market. In the early 20th century, the economy solved the lack of consumer goods.
Once the economy produced an abundance of goods, the consumer economy emerged to address the scarcity of demand. Futurist and thinker Paul Saffo described this in a presentation for the Long Now Foundation. Interested to learn more? Click here to watch on YouTube.
According to Saffo and others, the creator economy is here to solve for engagement. We have ample opportunities to find information and entertainment, but we only focus on or engage in relatively few things. Often, those things were made by creators – the engines of the creator economy.
Take a look at this example! 👇
MrBeast's channel surpassed 100 million subscribers on YouTube in August of this year. To celebrate, MrBeast reportedly gave away a private island during a challenge. Shopify funded that challenge – at least in part.
MrBeast has an engaged audience. Shopify has a product to sell. This is modern affiliate marketing through the creator economy.
Modern, creator-driven affiliate programs seek to partner with creators or influencers to either:
- Promote your product inside of content the creator is already making.
- Or create content specifically for your brand.
🎁 Gift-giving season
For many DTC brands, sales soar during the peak holiday shopping period – October to December. Loads of customers are buying gifts for family members, friends, lovers, and even coworkers via the office gift exchange. Some will even self-gift.
In 2021, for example, America's National Retail Federation (NRF) estimated that the typical adult in the United States would spend $998 on holiday shopping – thereby collectively spending $886.7 billion during the 2021 holiday season.
With so much revenue at stake, DTC and retail marketing can be like a slugfest from October through the end of the year, as brands and shops compete for valuable keyword phrases and audiences.
Here’s why affiliate marketing could be a powerful holiday channel for DTC brands:
1. Affiliate marketing is performance-based.
This means that marketers only pay when a sale is made. This aligns perfectly with DTC brands' focus on ROI and customer acquisition costs.
2. Affiliate marketing could help DTC brands reach new audiences.
During the holiday season when everyone is looking for gift ideas, reaching new audiences is pivotal. Creator-affiliates already have shoppers' attention. Remember that engagement is what they offer, so you can partner with them to promote your product.
3. Affiliate marketing can be a cost-effective way to drive sales.
Marketers know that performance marketing spend during the holiday season increases. However, because many affiliate partnerships are based on generating actual sales, your brand only pays when actual revenue is earned.
4. Affiliate marketing can help DTC brands tap into the creator economy and work with creators who have engaged audiences.
If you are a DTC brand looking for a holiday marketing channel that is performance-based and can help you reach new audiences, affiliate marketing is definitely worth considering.