The short & long-term future of DTC

Chargeflow recently put on an amazing webinar, with experts from Triple Whale, Gorgias, Yotpo, Common Thread Co, Fermat and more sharing their thoughts on the future of DTC.

It’s the perfect time to dive into this topic, because it’s never been more uncertain. Brands are contending with tariffs, rising CACs, saturated markets, struggling economies… as well as the introduction of AI, which could completely change the way businesses operate (and how consumers buy products).

You can check out the webinar on Chargeflow’s YouTube – part one here, part two here.

It’s definitely worth the watch if you have time. But here’s a quick look at some of what was discussed – plus what I think brands should be planning for in the long and short-term.

1. Tariffs & supply chain uncertainty

Global supply chains are in flux. But we all know that.

There seems to be some reprieve in the tariff situation for now, but who knows how that will last? And even if the tariff war goes away, there’s always something else that comes along to shake up supply chains for brands manufacturing overseas.

Experts recommended brands not to panic or overcorrect in the short term. Instead:

• Renegotiate terms with existing suppliers to add flexibility.

• Use tariff engineering (e.g., minor material swaps or SKU tweaks) to qualify for lower duties.

• Begin sourcing tests with suppliers in Mexico or India; just don’t overhaul operations mid-storm.

• Diversify your supply chain. Have a plan B in place if one part of your supply chain has problems.

2. The importance of retention

With CAC still rising and attribution still messy, smart brands are shifting focus from acquisition-at-all-costs to retention from day one.

Here’s what’s working:

• Personalization (especially in post-purchase flows and onboarding emails)

• Proactive comms (shipping updates, “how to use it” guides, etc.)

• Real loyalty value (think early access > shallow discounts)

• Inventory visibility (stockouts are killing LTV)

This goes along with a couple of specific points we discussed here recently.

Last week we looked at Athletic Brewing’s website, and how they use smart entry points to make it easy to introduce new customers to their products.

While on the podcast, Omer Hazer discussed how to do retention right, and specifically the impact of customer experience – including stockouts – on customer retention.

Acquisition is always going to be a major factor for growth, but with uncertainty at its highest, dependable repeat revenue from existing customers has become more crucial than ever before.

3. The consumer mindset in 2025

It’s not just brands that are burned out. The uncertainty and economic woes extend to shoppers as well.

“Panic promos” like tariff-driven fire sales can backfire. You’re feeling the pinch, sure, but customers don’t want to know about it. They want to buy from a brand they feel is strong, secure, because they innately want the same for themselves.

They prefer brands that feel stable, familiar, and empathetic. They also want products that are useful – now’s not the time where luxury purchases are thriving.

4. AI in DTC

AI is still one of the hottest topics in DTC (and all industries, to be fair). 

Brands are using it for:

• CX chatbots (like Gorgias’ new conversational tools)

• Creative ideation (but not final output – yet)

• Automating ops (e.g. product sourcing)

It has amazing potential for brands; but there’s definitely room to go wrong.

Results vary wildly. AI tools and agents aren’t enough to fully replace human staff yet; they can do a lot of jobs, but there’s still need for human oversight (and skilled prompters to build out AI workflows).

Takeaway? Smart brands are experimenting heavily with AI, while ignoring it completely will have you left behind. But don’t turn the keys over to AI just yet. Make sure there’s always a human at the wheel.

5. International expansion

With the uncertainty around ecom, especially with the China-US supply chain, international expansion is a smart move.

Major brands are pushing into Australia, New Zealand, UK, and Canada, markets that are relatively untapped; yet culturally aligned with the US.

It’s a lot easier for US brands to launch in these markets. They’re English speaking, and most of what works in the US will work in these countries too.

There are certainly opportunities in the likes of Mexico, China, Japan. However, adapting to the language and customs of these markets takes a lot more investment.

6. On platform dependence & fragility

If there’s anything that 2025 has told us, it’s how fragile many brands’ business models are.

Building on platforms like Amazon, or through channels like Meta & Google, means building on borrowed land (with thinner margins every day).

TikTok Shop is turning a lot of heads, and making certain brands a lot of money…. But again, this is a tap that can easily be turned off.

Most brands are still under-diversified in channels, infrastructure, and geographic risk. The more you can diversify, and protect against platform risk, the better.

Build multiple sales channels, so if there’s a problem with one, the operation keeps running.

And invest more in building your own channels – email, SMS, mobile apps, branded communities. These channels give you a hedge against platform risk, as well as a buffer against rising CACs and thinning profit margins.

Three predictions for the future of DTC

1. Generative Engine Optimization (GEO) will replace traditional SEO. Shoppers will use ChatGPT/Gemini before Google, and brands that are invisible in AI searches will be lapped by those who are working on this now.

2. AI agents will start running full workflows, from creative briefs to factory sourcing. You’ll still need humans to watch and tweak these workflows, but it will be like a manager overseeing a department.

3. The long game wins: ecommerce is not dead – people will keep buying things. And brands that invest in CX, trust, and transparency now will own mindshare when buyers return to market.

Big picture: while many are scrambling to stay afloat, the brands that will win in 2025 are the ones playing the long game. 

Not panic-discounting every time a policy changes. Not chasing AI hype blindly.

You’ve got to be on top of everything that’s changing. It’s a mistake to ignore tariffs, or AI, or social commerce.

But at the same time, staying close to your customers, building real loyalty, owning your audience, and staying flexible is key.

It’s all about balancing survival now with smart, durable growth over time.

Quick Hits

Is the tariff war over?

Aaron Rubin (one of the best people to follow on social when it comes to supply chain) thinks it is. The narrative was a “90 day pause” — but the prediction is that the death blow of >100% tariffs is now in the rear view.

Read more →

Recession chances drop

More good news. In the wake of the tariff pause, Wall Street economists believe it’s less likely the US will fall into a recession.

“Tariffs are essentially a tax. With the latest tariff cuts, the estimated effective US tariff rate has fallen from roughly 24% to 14%. This creates a $300 billion "tax cut" for American consumers that likely would've been swallowing the brunt of the price increases caused by tariffs.”

There’s still a risk; and economic growth is still likely to slow. But the future is looking a lot brighter now.

Read more →

How to lower CAC for fashion (without discounting)

It’s a constant struggle — acquire customers for less, but without burying margins.

This post shares some great tips on how to do that. Some straightforward, applicable tips fashion brands can take on board (which can probably apply for brands in other categories as well).

Read more →

Why your brand needs push notifications

Push notifications are the most underutilized channel in ecom.

Part of that is because there’s a slight barrier of entry; you need an app, you need to get people on your app.

But once you have them, push notifications are so powerful. Free to send, immediate, high visibility.

We recently updated our guide on push notifications for ecom brands; which explains why they’re so powerful, how to use them the right way, and real examples from real brands succeeding with push.

Worth a look if you want to add a new, high-ROI marketing channel to your stack.

Read more →

Hollow Socks & launching a premium sock brand

I love this brand - particularly how they were able to break into a mature market (people have been selling socks for a long time), with a premium product, and do so while staying lean and bootstrapped.

Their strategy aligns with everything I believe works long-term; launch a product that works, let the product drive the marketing, build a great customer experience to support the product — and then let that CX lead growth.

Read more →

How LLMs change the search marketing game

LLMs, AI, Gen SEO (whatever buzzword resonates best with you) is here to stay. And it’s only going to become a bigger part of our world, once shoppers start using AI tools at scale to find products.

This article is a great breakdown of the situation. The title really says it all:

Read more →

That’s all for this week.

Hopefully you’re feeling good about the break in the trade war, and starting to see some positive things ahead for your business.

I’ll be back next week, with more of what you need to own 2025 with better CX & retention.

Remember to check out our podcast on Spotify and YouTube, and give it a like/comment/sub if you found the content useful.

If there’s any topic you’d like to see us dive into, for either the newsletter or the podcast, just shoot me a message here.

Until next time,

Pietro and The Retention Edge Team

PS: want to start getting more profitable, repeat sales? If so, launching your own app could be the best move you make this year.

You don’t need to spend hundreds of thousands on your app, or rebuild it all from scratch. Your website is good enough to make up 90% of your app — just like with Amazon’s mobile app.

See how: go to our website to get a preview of your app for free, or shoot me a DM on LinkedIn to talk about it.