Declining quality of clothes, increasing ecommerce revenues, and virtual fashion | D2C Digest

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Hey there, great people of the D2C community who are building fantastic things! This is your host Berkay writing and this is the 60th edition of D2C Digest. What a ride it has been so far!

Take a 5-minute break and dive into D2C Digest for a quick overview of what’s happening in the D2C market worldwide!

🤔 Why are ALL your clothes worse now and how can D2Cs change it?

Recently, I watched a 14-minute video on Reddit about the changing quality of clothing items over the last 20 years. It was prepared by More Perfect Union, a nonprofit newsroom for their YouTube channel, and presented by Sanya Dosani.

The video sought to answer the question on everyone’s mind: “Why are the clothes we buy so much shittier now compared to 20 years ago?”

Apparently, an average American used to spend 7% of their annual income on clothes in 1986, while the number is just 3% today! And there's more: In 2024, people in the USA buy 68 pieces of clothing every year, whereas the number used to be only 12 back in the day!

It sounds great, right? We buy more and spend less money. “What could possibly be wrong about this?”, you might think.

But there’s a catch: The clothes offered by large brands in 2024 are much less durable and elegant and use many more unnatural fabrics, compared to the clothes in the 80s or 90s! I think it’s not that difficult to notice this when you put two pieces of clothes side by side, one from the 90s and one from today.

There are many reasons for this shift and the the 14-minutes video explains why the clothing industry itself has changed drastically over the past few decades. It’s really helpful for understanding the declining product quality. Check it out!

One thing I couldn’t stop thinking about while watching this, though, is the role of D2Cs in this changing market. Many people criticize D2Cs, especially apparel brands, because of their high price points. Yes, people might not be fully aware of the unit costs behind this, and yes, it’s the responsibility of the brand owner to keep the costs low and offer competitive prices.

But most of the successful D2C brands already serve high-quality items and they do their best to offer affordable prices. And I really think there should be a cost to high quality.

By prioritizing transparency and uncompromising quality, D2Cs have the opportunity to redefine consumer expectations and elevate industry standards to their previous levels.

Plus, not only the apparel industry can benefit from this shift, but also other industries as well.

Lastly, as consumers, we honestly should buy less but prefer better products that will last longer. Investing in well-made, durable clothing not only reduces waste but also supports sustainable practices. It's about valuing honest craftsmanship and the longevity of our purchases over cheap, disposable items that contribute to environmental degradation.

I’m really curious: What do you think? Can D2Cs redefine standards?

📈 Q2 2024: Ecommerce revenue jumps 7.2% despite falling prices

CommerceIQ’s latest report shows retail ecommerce revenue jumped 7.2% in Q2 2024 compared to last year, even as prices fell. Here are the key takeaways:

More for Less: Consumers are buying more items at lower prices, boosting overall revenue.
Well, I’m not sooo sure it’s good news in light of the previous article, but it sure helps with revenues. 🫠 

Ad Spend Growth: Brands increased their online ad spend by 10.1%, prepping for Prime Day 2024 despite tighter margins.

Category Trends: Most product categories saw revenue growth, except Office Products. Pet and Beauty items led in ad spending, with increases of 68% and 79%.

Ad Strategies: Sponsored brand ads are on the rise as brands build audiences before big sales events.

Inventory Insights: Higher inventory levels helped reduce out-of-stock losses, though there's still a mismatch with consumer demand.

Guru Hariharan, CEO of CommerceIQ, highlights the adaptability and growth potential of ecommerce. Brands investing in AI-powered solutions are better positioned for sustainable growth.

For more details, check out the full State of Retail Ecommerce Report for Q2 2024!

P.S. How do you feel about these trends? Are lower prices or new ad strategies catching your eye? Let’s chat!

🧑‍💻 Brands are discovering virtual goods

You might remember we talked about social media platforms partnering up with brands to go omnichannel last week: Here.

Simultaneously, the opposite is also happening: Fashion brands are diving more into the digital world to engage consumers and boost sales.

For example, Vans launched Vans World 2 on Roblox, offering new shoes virtually before they hit stores.

Ralph Lauren, on the other hand, partnered with Zepeto to launch a digital fashion line, targeting tech-savvy consumers. They now sell digital apparel for avatars.

In a recent article, Pymnts experts argue that virtual goods build brand loyalty and open new revenue streams. They can also drive physical product sales through virtual integrations. We will see the results of such engaged ecommerce efforts soon 🤷🏻‍♂️

Speaking of it, we just published the new episode of our podcast where talk in-depth about engaged ecommerce and how it will affect the future of ecommerce. My guest was Irem Isik from Storyly, a user engagement platform that offers personalized, interactive, and shoppable content experiences. Irem shared her insights about what is engaged ecommerce and why it’s crucial for D2C brands! Check it out 👇👇

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