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Virtual influencers, strong customer loyalty, The TikTok Case | D2C Digest

Weekly D2C News

Hey there, great people of the D2C community who are building fantastic things! This is your host Berkay writing. 

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

🤖 The Rise of Virtual Influencers

Virtual influencers like Lil Miquela, Shudu, and Kyra are transforming brand marketing.

Lil Miquela collaborates with high-profile brands like Prada, while Shudu and Kyra have worked with Balmain and L’oreal, respectively. Interestingly, these influencers are AI-generated.

And numbers say their impact is growing: 35% of U.S. consumers have purchased products endorsed by virtual influencers, and the market, valued at $4.06 billion in 2022, is projected to expand 26% by 2025. Brands value virtual influencers for their control over campaigns, cost-effectiveness, and reduced risk of scandal.

However, the lack of authenticity from not having real-life experiences could deter some consumers. As the influencer space becomes saturated, virtual influencers offer a novel alternative, raising questions about the future balance between human and AI-driven endorsements.

Would you use a virtual influencer for your brand?

💪 Consumer Loyalty Remains Strong but Price Still Matters

Even as economic challenges tighten budgets globally, consumer loyalty to brands, particularly Direct-to-Consumer (DTC) subscriptions, remains robust, according to ChannelSight’s recent report.

Surprisingly, 60% of consumers report that rising costs and supply chain issues haven't swayed their loyalty to their favorite brands, with only 30% stating these factors have impacted their loyalty negatively.

However, price continues to play a crucial role. Nearly half of the consumers (49%) said lower prices could motivate them to purchase DTC. So there is still a very delicate balance brands must maintain between fostering loyalty and staying competitive on pricing.

🥊 TikTok Will Fight Back

Well, the TikTok Case has been huge over the last couple of months - and the news keeps coming.

Last week, we shared the House of Representatives has passed legislation - President Biden's support - potentially leading to a nationwide ban unless TikTok's Chinese owner, ByteDance, sells the app (read more here).

Now, TikTok CEO Shou Chew announced that the company is prepared to challenge a potential U.S. ban in court. In a recent video, Chew criticized the new law signed by the President, which includes a nine-month delay, ostensibly to allow for a sale before any ban would take effect.

Chew expressed confidence in TikTok's legal position, citing previous court victories, including a 2020 federal ruling against a Trump-era ban attempt and a recent Montana case where a state-level TikTok ban was overturned. He emphasized that TikTok plans to continue operating and defending the rights of its users in court, leveraging the constitutional protections of free expression.

White Label World Expo returns to the Javits Center, New York on May 30th & 31st!

The world’s leading event for white and private-label products, fosters collaboration, education, and sales, featuring hundreds of exhibitors and cutting-edge seminars from renowned industry leaders

Register at this link with code D2CVILLE100 for FREE access!

Are you following D2CVille on LinkedIn? We share daily wisdom nuggets and podcast highlights with successful D2C entrepreneurs. Check it out if you haven’t already for being part of a huge D2C community!

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