Member Exclusive   //   April 17, 2024

‘Influencers are not cutting it’: Overheard at the Modern Retail Commerce Summit

It’s an interesting time to be working in retail.

It’s hard for many consumer-facing businesses to raise cash and customer acquisition costs are rising. Meanwhile, most brands are focused on profitability rather than growth at all costs.

These were the guiding themes of this week’s Modern Retail Commerce Summit, which was held in New Orleans. At the event, top brands and retailers dove deep into the major pain points they’re observing and tried to find solutions to the most pertinent problems.

The main stage featured top executives from companies like Bombas, Kendra Scott, Saatva and Poshmark. But beyond that, attendees gathered to share notes on what’s working and what’s not.

Below are some overheard quotes from the Summit. These discussions were done under Chatham House Rules, which allow reporters to relay others’ statements without identifying them by name or job title.

Rising customer acquisition costs

“We’re kind of struggling on which channels to put budget into.”

“It takes money to make money.”

“Our CAC, from what I know, is about 50% lower than our competitors. But we still operate on the four-month break even.”

“We pour a ton of money into paid — and most of that is Facebook — and it’s hard to get that return.”

TikTok and TikTok Shop

“For us, it’s been really good for brand awareness but not really conversion.”

“Everyone’s like you just got to get on there. But now that we’re there, we’re not necessarily seeing that growth that everyone has talked about.”

“It was very slow at the beginning, but right now it makes up 50% of our dot-com sales.”

“On TikTok, you have to play the game more than other platforms. You need to scratch their back before they scratch yours. But when you do, they do very well… When they’re pushing you to do things that may or may not align with your brand message, they’re pushing you to do the correct thing for scale.”

Influencer marketing

“15-year-olds are fickle. It’s not easy to stay trendy and fun. We’ve been benefiting from a lot of UGC and a lot of influencers just really liking what we do. What happens when that stops?”

“Influencers are not cutting it. I completely cut my influencer budget.”

“I cut my influencer budget just because we spent hundreds of thousands of dollars on influencer marketing… but for, say, every 100 influencers I’ve hired, maybe 5% of them drive enough revenue.”

“We scaled down our paid influencer pretty drastically and switched it over to gifting, which is the next new thing.”

Investing in communities

‘We’ve done all of our sales historically on social channels — Facebook, Instagram, TikTok. And so obviously, [we have] high customer acquisition. But a strategy that I found is leveraging the enthusiast through their own self-initiated fan page.”

“I see a lot of drop off where [brands] will be in [community forums] talking about the nitty-gritty of the thing that they like, and then you get to the usually really beautiful branded website that has none of that on it.”

“I’ve been advertising on Reddit. We actually saw some really good results.”

Debunking myths

“A lot of this data is very murky at best. Just as they say that word of mouth is the best form of marketing. I found that running a post-purchase survey is a really helpful way to talk to your customer.”

“Brand voice isn’t a real thing.”

“We have attribution issues because we have great sales in retail but it’s hard to know where they originate from.”