Why DTC sneaker brand Vessi isn’t spending on marketing right now
Last week, direct-to-consumer sneaker brand Vessi halted its media spending.
The Vancouver-based company, known for waterproof sneakers made of sustainable materials, has been reducing its marketing spend over the last three months before shutting it off last week so that it can work to build up production capabilities and replenish its stock. It’s unclear exactly when it will start spending again, as that’s dependent on when its production capabilities will be capable of meeting consumer demand.
“We reduced it to zero,” said Tony Yu, co-founder of Vessi, of the ad spending. “It’s kind of a scary thing to do, but at the same time it’s not. We have a massive waitlist of people wanting our shoes right now, and we’re working to [meet] that customer demand before we work to acquire new customers.”
The company, which launched in January 2018, says it shut off advertising after it went through six months worth of stock in one month. Vessi was initially producing 5,000 pairs a month. Now, it is working to scale to be able to produce 50,000 a month.
Figuring out how to scale production and balancing ad spend is a common issue for DTC brands as they grow, according to Nik Sharma, a DTC investor. As DTC brands focus on ramping up customer acquisition via advertising on channels like Instagram and Facebook — the standard channels for new DTC brands — there can be a lack of communication between marketing and operations, which can lead to this issue.
“A lot of brands tend to focus on the demand side and neglect the supply side,” said Sharma. “It’s a good problem to have for a second because you know there is a lot of demand for your company and your product. But customers have an interrupted experience and now they have to wait, so there’s a risk that customer will go buy elsewhere.”
Vessi was spending in the six figures on advertising — the company declined to share its exact spend — with the majority of its spend focused on Instagram. While the percentage changes depending on the performance of the creative and where it works best, roughly 50% of its dollars were going toward Instagram.
“It’s our primary awareness driver to get people to know we exist,” said Yu. “We’re using visual cues to identify with our customers what the experience would be like if they wore our shoes. Instagram is definitely the biggest spot [for that].”
The rest of the spending was split between digital channels like Facebook and Google, offline pop-ups, which account for less than 10% of the budget, and experiments with newer platforms for the brand like Snapchat and Pinterest. Once back, the company plans to spend more on Snapchat and Pinterest, which allowed it to target demographics by age — younger on Snapchat; older on Pinterest — with more creative meant for that demographic.
“Our younger demographic requires a different type of like creative experience for them to engage with the company,” said Yu, adding that that’s what Snapchat provides though it can be hard to scale. “As that platform starts to mature, we’ll definitely try and spend more on Snapchat.”
Once it figures out distribution and starts spending again, the company plans to add podcasts and YouTube to the mix. Those channels offer more storytelling potential than Facebook and Instagram, where the marketing for DTC companies can be more “value prop” and “transactional,” according to Sharma.
For DTC brands like Vessi, it can be important to show investors that they can market outside of Instagram and Facebook, said Sharma. “A lot of brands are getting pressure from investors to show they can expand outside of Facebook and Instagram,” he said. “It’s good internally to know you can put your eggs in other baskets.”
In the meantime, Vessi’s social channels will give consumers a taste of what it’s like to work at a startup and how they are working to scale production. “We want to be more transparent and give people a peek inside,” said Yu. “It might be a tour of a factory or a walk around the office, how we’re making the shoes, all the things people might have questions about.”
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