August Insights & What to Expect for Q4: State of the Industry Podcast

[00:00:00] Taylor Holiday: Welcome back to another edition of the DTC Index Monthly State of The Union Episode, where we bring in the keepers of all knowledge and information to share with you exactly what's going on in the macro environment in which we all exist here in the ecommerce industry. I will let each of them introduce themselves as we dive into August. 

And we're going to give you some great insights about what to expect in Q4. Jeremiah, why don't you kick us off first? Who are you and what are you here to share?

[00:01:00] Jeremiah Prummer: I'm Jeremiah founder, CEO of KnoCommerce. And the big thing we're gonna be focusing on this month is taking a look back at some of the data we collected around gifting for Black Friday, Cyber Monday last year. Just as a reminder, we have 4,000 plus brands. We work with who are asking survey questions like who is this purchased for?

And so we've got a bunch of that kind of data. And then. Dug a little bit into some things like consumer debt as well just to see what that's looking and how that's trending versus previous years and how that could potentially have an impact on Black Friday, Cyber Monday sales this year.

Taylor Holiday: Awesome. Good to have you, man. Yarden.

Yarden Shaked: Hey, yeah, I'm the co founder CEO of Varos. We provide benchmarks and market trends and what brands are doing differently than the high performers all from a first party data co op. Our clients, which are the ecommerce companies share data to Veros. We aggregate, we anonymize. We tag that data and then we show it back to them.

So there's about 7,000 brands on Varus, about 7 billion of ad spend annually tracked which we are pulling from and meticulously analyzing to bring. Listeners and readers of the DTC Index a lot of big insights here.

Taylor Holiday: Great. Thank you. And Steve.

[00:02:00] Steve Rekuc: And I'm Steve, Director of Data, at Common Thread Collective. I look at a lot of our aggregate data that we have from our clients and everyone based in statless as well as a lot of the consumer sentiment data that we partner with KnoCommerce to calculate the direct to consumer confidence index, DTCC.

Taylor Holiday: Awesome. So first thing we're going to do is we're going to recap August and That is going to be the least interesting part of this segment, I think, but we'll try and find some ways to give it an edge. But then if you stick around, what we're going to do is we're going to give you more visibility into perhaps the most important part of all of our years.

It relates to Q4 and what to expect from that, but to start out, let's do what we came here to do, which is to recap what happened in the month of August across the ecommerce industry. So Yarden, take us through what we're seeing in terms of growth. And media performance across the landscape.

[00:03:00] Yarden Shaked: Yeah. Decides who depends who you ask about what grade they would give August. I would say August is a softer month than we've seen in the past. Continued deceleration for seven figure brands on the revenue side of things. Last month they were at about 25 percent year over year revenue growth, and they're down to 14 percent a year over year revenue growth.

The interesting thing is that eight figure brands are actually increasing and continue to accelerate. And they've had the fourth best month of the year this year up 20% year over year on the revenue side. And we could dive into what that means and different reasons behind it, but, it does have some implications of dynamics going around. And then on the ad platform side ROAS was down for both Meta and Google nearly 10% for both those folks median spend was up on Meta quite significantly, up 25%. And on Google down 1% on that, on the spend, an interesting tidbit that I just pulled was that on an aggregate spend on meta that we track actually it has decelerated from recent months not necessarily from last year, but recent months from the start of the year meta, spend was up nearly 70 percent year over year that we track and now as you keep going it, it is down to this, up 25, 30, 30% that's also something to to look out for here, but I'll pause there.

[00:05:00] Taylor Holiday: So Yarden is one of those nightmare clients where you come back at the end of the month and you say, Hey, we're excited to report you've grown 20 percent year over year spend is up 24 percent and only down 9 percent in efficiency. We're growing new customer revenue. We're growing existing customer revenue. And he goes, eh, that seems soft. So that's what I'm hearing. So you're where is the softness? What, why don't you like August? I felt like we took a look halfway through the month and it was looking dire. And then the industry rallied. We had a great second half of the month. What specifically are you not liking?

Yarden Shaked: So first of all, I have a affinity for underdogs and the seven figure brands are hurting.

Taylor Holiday: enough. Fair enough. 

[00:06:00] Yarden Shaked: that and I worry for them. The second thing is, okay so yeah, Metaspend is growing and ROAS is softening at a slower pace than Spend is growing. But the problem is that there's only a certain amount that you can go and spend and auction dynamics are increasing across the industry. And Meta and Google have a very hard task, TikTok have a very hard task of the economy growing. Spend. Continuing to grow people relying on these ad platforms to acquire business. They're becoming more monopolized in a way that there's only a few places to go and spend is increasing and they need to keep innovating to make that spend truly not make the ROAS not decrease as fast as spend is increasing.

So when you have ROAS down to 10%, sure. Spend went up. But can that happen every year and can a company afford to increase spend every year and reduce ROAS by 10 percent or at some point will they become not profitable, but the rest of the spend will increase. And then they will keep hurting just because they're in the same auctions, but other people are putting more money in. And it's a hard, it's a hard thing to deal with.

[00:07:00] Jeremiah Prummer: Yet, one thing you just mentioned that I think is really interesting is the decline throughout the year and year over year spend increase. That's actually a really interesting point because in theory, You would expect if January is up 70 percent year over year that you would see a similar sort of increase throughout the year.

So for it to go from 70 percent down to 20 percent, like that's a pretty significant change. So I don't know what that signals exactly, but that is a compelling point in my opinion.

Taylor Holiday: Yeah, I think it's fair to call out that in most cases, brands are spending up into their marginal threshold and often beyond. And so any decrease in efficiency probably is risky. So I'll accept the president premise and I appreciate your care for the little man here as the seven figure brands are that it is three, three straight months of declining growth rate.

And Especially when tracking percentages, we should see the percentages from the seven figure stores be easier to increase than it is for the eight figure stores. There definitely is. And this is something we've tracked before is the bifurcation of these worlds where the eight figure stores are able to lean into a lot of the existing customer revenue base that they have seven figure stores don't have that base to operate from. And so any decrease in the efficiency of acquisition is going to hurt. Those brands disproportionately. So that's, it's a fair call out, Steve. I'm going to come to you. What are we seeing added in any color you want to that as well. And then take us through what we're seeing on the consumer 

[00:08:00] Steve Rekuc: Yeah, I'd also feel for the seven figure brands as well. Plus 4 percent on new customer revenue for. 7 figure brands is barely beating inflation if at all. So that's certainly something to be concerned. And you have a great point in that they need to acquire customers more because they have a probably a smaller customer file than 8, 9 figure brands. It is far more imperative that they acquire new customers. And it's looks to be growing slower in that respect.

[00:09:00] Taylor Holiday: That's 95 percent of the market is seven figure and below right in terms of the stores that exist. And so I think a lot of the sentiment about the health of our industry is produced out of that cohort. If new businesses are starting and growing and there's excitement and energy around that cohort, it tends to disproportionately affect the sentiment because the volume of people that exist in that space is so much larger. And so I think it's another thing to always consider is that in many ways. Because the tail is so fat on that side of the customer database side, that it's going to disproportionately represent the audible voice that exists in many ways from that group of people. 

Steve Rekuc: That's right. That the number of CEOs and presidents or marketing officers that might have an issue with their brands only being up 4 percent is significantly more.

Taylor Holiday: that's right. What about on the customer side, Steve, August was a weird month. We had some sort of tumultuous market stuff in the very beginning of August with the bank of Japan and some other things, but how did the consumer respond and what are they telling you about their feelings go forward?

[00:10:00] Steve Rekuc: Yeah. It's really interesting that in terms of the respect their perspective on the future of the economy, we've actually seen that consistently increased and we had our highest number ever recorded for the past Of a complete month for August, saying that they had a positive outlook on the future of the economy. And that's really interesting in our 2nd, lowest month for negative sentiment about the economy being worse in the future. And that's really interesting coming off of some of the volatility. We saw some of the stock stocks dropping and some negative economic news. I think people might just have a very. I don't know, positive outlook on the economy, despite all that it's either that or go ahead. Sorry, Taylor.

[00:11:00] Taylor Holiday: I was going to say, yeah, on that note. So let's talk a little bit about why we think that might be. I know that there tends to be the media cycle and I'm going to speak anecdotally. Now tends to revolve around right now. A lot of the, our interest rates going to go up or down, and we are in this cycle right now where it seems like they're about to go down.

And so that, that tends to be a more positive set of information surrounding the economy, as well as we continue to see the the S and P hit all time highs and growth of the general underlying stock market generally. So do you think this is a bullish signal for Q4? Should we be excited about that indication or why might that be? Less positive than we think. What do you, what is anybody's perspective on that?

Steve Rekuc: I think it is a positive signal, especially when paired with kind of the other sentiment that we survey with KnoCommerce, the percent of customers intending to spend more in the future. We begin to see that uptick in August, where consumers, we saw this last year at the same time, where we saw that uptick from July to August, where there's a significant increase in consumers saying they intend to spend more in the future.

They're starting to plan for the holidays and we saw a larger uptick this year than we did last year. We only have the 2 years to compare, but instead of it going to, we're looking at, instead of the consumer sentiment last year being minus 4%, net it was minus 3%. So it's nicer to see that climbing a little bit higher, and it'll continue to climb until we get to Black Friday and Cyber Monday.

[00:12:00] Taylor Holiday: Yeah. The other thing I just offer anecdotally real fast yard, and then I'll come over to you is it feels like we're in the part of the political campaign cycle where everyone's telling us we're going to get the free vending machine, right? We've got the child tax credit and the small business startup tax credit.

And all of the candidates are telling us all the things that they're going to do for us here in the near future. And they're all very Here's some free money in many cases, whether it's tax cuts or other things. So I think that there's that piece of it too, is that we've got interest rates coming down.

We've got an all time high stock market and we've got a bunch of people telling us they're going to figure out ways to give us more money, and so it tends to create this underlying sentiment. They're like, Oh, maybe we got some things coming our way. But Yarden, what are you thinking?

[00:13:00] Yarden Shaked: yeah, I, I just say if injuries come down before the holidays, that's a great sign. Just from the simplest thing of you have, let's say you have a hundred, you have a thousand dollars in the bank today that is growing 5%. Now someone says, okay, instead it's going to grow 4%. You have, that much amount of less incentive to leave it in the bank and go spend it.

I think, that's what we saw in the start of, the 2020s and the 2021s. And, so now that'll play out to a lesser extent. Obviously the rates are still going to be above. You're still going to be able to get over that 3%, 4 percent rate. But that change, I think should directly impact purchase behavior.

Jeremiah Prummer: And that has a, an effect on the flip side of that as well, which is that the debt that people have outstanding, it becomes less expensive to maintain. So it allows. For additional spending for people that do have outstanding debt, which is something that we see right now.

[00:14:00] Taylor Holiday: Yeah I was with a friend this past week and he's got a variable rate mortgage that's on prime minus one and that gets a lot cheaper if there's a rate cut, which puts more money very practically into his pocket, like in a very real way. I know that there's a lot of that would just practically happen.

That it just, I know my realtors texting me constantly telling me, Hey, you Markets at six, if it goes to five and a half, it's going to get bonkers. You might want to move now. Like it's there's this sort of generalized energy about what, how much we've become hooked to the interest rate as an, as a signal 

Yarden Shaked: It's real. It's not just, it's not just the signal. It really is real.

Taylor Holiday: it does create more money in one way or the other, for sure as an indication.

So that, that could be part of what's driving that, that bullish sentiment from the customer. Jeremiah, let's start now. And you pulled some really interesting data on the survey side. As we begin to look out into Q4 about how, and for who people begin to purchase into the season. We know that it's a pervasive narrative that people will look more into gifting and holidays, but there's always this question of what about black Friday?

Does that continue? Who are they buying for? What can you bring to the table? As people begin to think about and plan for that period.

[00:15:00] Jeremiah Prummer: Yeah, absolutely. So the reality is that most purchases in general throughout the entirety of the year are for oneself. So somebody is actually going online to, and specifically in the context of DTC brands, this, that's the case, right? So somebody is going online. They're finding something that they want, they go and they make the purchase.

And most of the time that purchases for themselves. So from the data that we were tracking last year throughout the months leading up to black Friday, cyber Monday, it was around 25 percent of purchases that were being purchased for someone else. 75 percent of purchases were for self. And there's this nice little curve that you see start to develop.

And so basically by like early November is where you start to see the shift and so it shifts from a. From 25 percent of purchases, give or take a little bit being purchased for self or sorry for others up to 70%. And so the, and the peak of that gifting really the period that's 50 percent plus is after black Friday and before Christmas.

Essentially, I believe last year it was November 28th to December 20th. And so that time frame, more than half of gifts or more than half of purchases are being bought as gifts. And what I think is really going to be really interesting this year is that window is actually a lot shorter. So actually it's some prep to this.

Steve and I were talking through this a little bit. But that window is essentially a week shorter than it was last year because Black Friday is later this year and the timing of Christmas with the weekend is a little bit worse this year as well. And at least in terms of getting packages sent out and being able to be delivered on time, so that window is going to be a little bit shorter this year.

So the impact of that is hard to know exactly, right? But I think what could happen sometimes is that somebody is buying a gift. on Black Friday. And then two weeks later, they find something else for somebody that they that they really like. And I think it's a good fit for that person. And they go ahead and buy it because it's gonna arrive on time for Christmas.

There's gonna be less time for those kinds of things to happen this year. So my suspicion is that overall gift buying may be slightly lower this year, but we also might see just more gift A higher percentage of purchases coming through as gifts in a shorter window this year because of the timing of everything.

It's going to be really interesting to see how that plays out. But the gist of this though, is definitely be focusing on gifts after Black Friday and before Christmas, that's going to be a huge window. And in that time though, most people are not most, but a good chunk of people are still buying things for themselves.

So don't neglect that as well. That is going to be a significant piece of revenue. So if you have a brand that maybe isn't as giftable as some others, don't just tap out at that point. There's still opportunity for you to make a lot of money. People are just in buying mode in that timeframe.

Yeah, that's a great 

[00:18:00] Taylor Holiday: Yeah, this is a weird sequential holiday as it relates to when everything falls and how many days you have in each period. And then you have the election in the first week of November. And so things get a little further compressed because we've seen in shared in our last episode, that's a week you really want to stay out of.

It's not. A very effective week for advertising. So now you get one even less week on the front end that compresses it just further. So very odd scheduling requires a little bit more thoughtfulness than normal in terms of when you're going to plan what messaging. So make sure you've got that planned out. Steve, one of the things that's been interesting to track is the progression of discount rate year over year. In Q4, we've watched, I think a big jump coming out of the COVID era where it seemed at its lowest in 2020. And then it jumped in 22 and jumped and then in 23, what are you expecting for discounts?

And the rates as we head into Q4 this year.

[00:19:00] Steve Rekuc: Yeah, we did see some increases. I think there's a paranoia that goes around that. And I'll get back to that in a sec, but I think it's going to be really interesting to look back in January and see what happened with Jeremiah's data relative to gifting. Once we get back once we see this year's data did it compress and then instead of having a peak around 70 percent did the gifting peak go up to 80 percent or 90 percent that people become far more focused on gifting just because it's a short 1 week shorter gifting window. I'd love to see that when it happens, or when we get that data in January with respect to the discounts. Yes. I think we've seen a little bit, there's been paranoia about gifting growing or not gifting, sorry, discounts growing over the years and see that happening. It has increased in discounts.

Certainly. We don't see brands necessarily being that effective. And when I'm looking at the data, I'm looking at Shopify data. So actual conversion. Discounts, not like what they offered on the site when we look at that, we don't necessarily see that increase that much year over year. We did see a much more of a peak an early November. That's just a Jeremiah's gifting starts to tick up. We also see that the week of November 6th, we saw significantly more gifting last year than in 22. And higher there as well in 23, then 2021

[00:20:00] Taylor Holiday: things that I think is really interesting is that if you look at the discount rates, even we look at like the Q4 overall discount rate. Okay. So discounts as a percentage of order revenue, it seems to me that when I look at 2021. When we know was still like peak covid demand, we were still in this like inflated demand cycle that discounts capped out a week of black friday at about 17%. Was the average. And then you see in 22 and 23, that number push up to 21, almost 22%. That's a, that's like a 20, 30 percent increase in the discount rate. And it seems to me to reflect the actual demand that was there as well is that it took more in that period to get to that same revenue expectation, but you also see that 22 and 23 sort of ceiling at 22%, which is like the upper bound of what's possible for brands.

They don't really have much more margin than that to give. So they're really. Pressing into that upper bound where you see black Friday, the average discount rate coming in somewhere in that 21 to 22 percent range, and that matches like our sort of recommended best practices, sort of 20 percent offsite wide is the simplest, easiest communicative to discount in that period. Do you really think that there's actually, is there room for it to push beyond that, or is that sort of the upper limit for ecommerce brands in terms of what they can afford to discount and still make money?

Steve Rekuc: yeah, if they're trying to be profitable and are we're not overpricing their goods to start or had significant margin to start if you're discounting more than that's going to be struggle to make money. 

Yarden Shaked: My bet is that it should go down this year. Because 2024 has been a consistent revenue growth year over 2023 implying, good, at least decent demand. So you should hope that there's not an increase, but even a decrease in this.

Taylor Holiday: That's right. That's right. That would be a positive signal, I think.

[00:22:00] Steve Rekuc: Yeah, I would love to see that. We've generally seen discounts be higher year over year throughout our data set. So that works, but I think in order to acquire customers to combat some of the inflation we've seen over the last, like for, since COVID that we've seen more discounting from brands and that kind of be effective.

Taylor Holiday: Yeah, that's interesting. All so Yarden, as we head into this period, what are we seeing from share of wallet? What do we see in Q4? Where do brands allocate their dollars as they head into their most important months of the year?

Yarden Shaked: Yeah so yeah, so ahead of holidays as we like to do here, we try to be as strategic as we can. And we're going to do a few sessions on this with the DDC index. I, by the way, a lot of the data that Steve spoke about and Jeremiah spoke about, I'm looking at the charts in front of us here.

I think. We don't do it justice by talking about and you should really read and consume the charts because really it's actionable at hitting the dates at the right point. And knowing what's going on. And so it's important to look at the newsletter and not just hear it verbally. But when we're looking at how budgets have been split in the past around Black Friday, Cyber Monday, and if it really does change. from the usual trends or people who just increase spend across the board and but keep it the same the same state of play. And when looking at just meta versus Google versus TikTok from the highest level, it's super interesting to see because You see these huge drops in the date.

Like we looked at share a wallet which is just the total spend that we track split by platform by day starting from June leading up up until the end of the year. And huge drops in share a wallet on Google and meta taking that share from Google on Black Friday and the three, four days before it and Christmas, a little less drastic than Black Friday, but still you you also see that and tick tock relatively. Stable. And then if you double click into that and you say, okay. So I understand like overall meta meta is more of a has increased span versus Google. But then when you go in, like where specifically is the money going and where the big changes are. So one really big change is YouTube. YouTube spend shifts significantly down in the holiday season in terms of share of wallet, because of budget. It doesn't necessarily mean that people are spending less on YouTube, but as a ratio they're spending less, which is the important thing to keep tracking. Reels is also down on Meta. So while Meta is going up, specifically Reels is coming down. Facebook feed just standard feed on Meta. Way off. Ridiculously up and stories is also going up and then Google shopping has a big increase in share of wallet as well. Now, if you think about it, I spent some time thinking about that and it makes sense.

I think at the end, it does make sense because when you're in going into these holidays, people are in buying mode. And the ad formats that are increasing are the ones that are just the most straightforward, here's 20 percent off by my product, right? Facebook feed even stories is like simpler to do that. And shopping obviously is like a very, it's a very straightforward one where YouTube is more a lot of times, an introduction to your brand, it's not overly. Converting and similarly on, on reels. And yeah, there's it's really important to track these dates and how your strategy is and understanding that those are the dynamics, so either taking advantage of, the auctions are a lot less competitive on these video, more awareness based things like YouTube videos. And trying, if if you have some way to make them actually higher converting and taking advantage of the holiday, making videos based off that there's a arbitrage there or on the flip side saying, I don't know, I don't have this overly converting creative assets for those formats. Don't even try for it. Just go for the high converting things, even though they'll be more expensive,

[00:27:00] Jeremiah Prummer: Yeah. One, one thing that's interesting, I we touch on it briefly in the report, but one of the questions NoCommerce is, how long did you know about us before placing your first purchase? And then we also ask somebody where they discovered the brand. So how did you first hear about us? And when you look at those two questions together, what we see is that the.

The time that somebody knew about a brand before buying is higher during Black Friday, Cyber Monday through Christmas than it is at other times of the year. And except for in the case of word of mouth and Google, which I think makes sense in the yard. And when we're talking like through this stuff, somebody, maybe you introduce somebody to your brand for the first time on meta two months ago.

But then they see an ad right now during black Friday. That's a very high converting time. You're much more likely to get that person who was made aware a month or two ago to actually make that purchase now. And I do think there's even a shift in the way that people think about shopping prior to black Friday and in any sale time, really, like I do this.

I literally, I bought some hex cloud for a gift. I guess it was the Labor Day sale that I purchased it. So the event that the gift was for was prior to when I purchased it. But I knew that I was going to be able to get a good deal. So I was like, Hey, here's what's coming, but I'm going to wait until I actually gets this timeframe to purchase it.

And I think that's a common way that people shop, especially when it comes to Black Friday, Cyber Monday. So I think this data is really interesting Yarden in terms of the share of wallet, because that stuff becomes much, you go from the awareness side of things and maybe. The months leading up to this, you're seeing an awareness.

And I like the, you show Google shopping dropping, and then November and December hit and just skyrocket back up again. Because that's the kind of behavior that's happening, right? People are waiting to purchase oftentimes. So I think it's yeah. And word of mouth and Google being really fast converting channels makes sense, right?

Word of mouth is obviously organic, but if somebody tells you, here's what I want for my Christmas gift. You're probably not going to go shop for something else. You're just going to get them what they want. And you're going to do it quickly. There's no time to, required to think about it. Yeah.

I think the, that stuff is going to be really fascinating to, to, for anybody who's looking at like where to allocate budget in Black Friday instead of Monday. That's all good. That 

[00:29:00] Taylor Holiday: Yeah, anytime that brands want to get people to purchase right now, the money moves to very clear places anytime they want to maybe someday get somebody to purchase in the future, then they try other things. The One of the things I think is definitely worth reading the DTC Index for is to see the specific share of wallet by placement.

I think that's one of the unique things that we bring to the table in this is to actually see the changes all the way down to the individual placement level. It's really fascinating and it really helps you to think about creative and budget allocation in more specific ways. Steve, one last thing before we head out here is that I feel like maybe the 1 counter signal to the macro conversation has been related to debt and consumer debt in particular and concern that we may be stockpiling. A little bit more debt that may suppress our capacity to go out and load up the credit card a little more this holiday. Cause it may, we may be pushing our limits there. So what are you seeing on the consumer debt side? And what do you think that, how do you think that may impact consumer spending in the fourth quarter?

Steve Rekuc: Yeah, I think that was some of the data that Jeremiah pulled for this issue and it's interesting and that's the highest. 

[00:30:00] Taylor Holiday: Jeremiah. Is it you? Yeah. Is that you? I just assumed it felt very Steve. I didn't know that was a, That was yours, but please what, maybe, what did you see and what did you like, and then see if 

Yarden Shaked: That's a compliment Jeremiah, by the way.

Taylor Holiday: that's good. 

Jeremiah Prummer: Good, good. Yeah, so one of the things, I looked at a few different things. Credit card debt general consumer debt. Like outside of mortgages basically is what we're looking for, right? Like a mortgage doesn't necessarily tell you a whole lot about spending ability. Because it's just how it is, right?

And oftentimes those costs are tied to an event that happened years ago. Not necessarily something that's happening currently. So if you take mortgages out of it and you look at just consumer debt, what's interesting is we're actually seeing adjusted for inflation. We're seeing the highest levels of consumer debt since COVID 19.

2009. So that's not a great sign. It is not as high as it was leading into 2009, but it is the highest that we've seen since then. So there was a big drop during COVID, consumer debt dropped quite a bit but it's now climbing again. And it's higher than it was in 2019, which was the previous high since then.

The recession. So I think we're that's not necessarily a great signal. But it's not as bad as it was. And I think there's definitely still time for that to change. And what I found really interesting was it was high for a long time leading into the recession. It was years. It was not a. It was not one year that caused that it was multiple years, close to a decade of that high level of that.

So I do think that's definitely something worth looking at in the report and kind of break that down a little bit. But, yeah, Steve, I don't know if you have any additional thoughts on.

Steve Rekuc: I think it, it also is related to their view on the economy and somewhat in that if you're confident in the economy and you're confident in your job and, at that point, you'd be willing to take on more debt, perhaps, at least from a logical perspective.

[00:32:00] Taylor Holiday: Yeah. I also think this is one of the things that's hard when we grab a macro us demographic data and then try and overlay it to ecommerce consumers, which tend to be higher income already by default. And so there's this. Question of where the debt growth is coming from and who is the one servicing it and where is the labor market positive and not and so I think this is where it gets really hard to sort out how much that's going to directly affect us and where I just keep leaning back to all right, every month we've seen the consumer show up and spend to a moderate growth expectation. It's not extremely hot. It's not extremely cold. It's these porridge middle, like we got, it's just somewhere between 10 to 20 percent in most of these for seven and eight figure brands, most of the months. There's enough signal in every direction that I go I don't have any indication to tell you all that there's going to be a massive uptick or a massive decline.

I've got some data points that I could argue both sides. In different directions. And so I think the moderate expectation is the one that seems go forward to be reasonable to me in terms of where we're at. But

Yarden Shaked: I do wonder if this stuff is like it affects high AOV, like it actually does have an effect on high AOV things, but not really low AOV things. Like, cause it, 

[00:33:00] Taylor Holiday: We'll go figure that out. Who could figure that out?

You sir, you, sir, you, sir, could answer that question for us.

Yarden Shaked: I'm giving myself homework, huh?

Taylor Holiday: I'm just saying if you're curious, I'm, I think the people would like to know that people would like to know, all right, everyone. We're hoping to continue to lean in as we get more data. September is one of the first months. We expect a lot of those political dollars to start flowing in.

So check back in at the end of this coming month to see if that's making an impact on media dollars. But overall, we continue to chug along here in the ecommerce industry. And I would, what I would say is that if you were hoping to find a reason to blame your performance, either positively or negatively on anything that's happening in the surrounding environment. I think we've taken that crutch away from you, which is good. It's actually gives us back the authority for ourselves to go back and solve our business problems and to lean into what is individually true in your business and to go do awesome marketing, tell awesome stories and make your business grow. Because there's not really a massive tailwind or headwind here. There's just a gentle light breeze and that's what I'll leave you all with Jeremiah yard and Steve, thank you for coming on. Go to the DTC Index. com right now. And if you use the code September 50, you will get 50 off. Your first issue check it out.

We'd love your feedback and hope to see all of you. We do the, we just started these new monthly calls that are private to the members of the DTC Index, where we answer very specific questions about your brand. We take data requests. So if you want to get the most out of that subscription, I would encourage you to sign up, get the issue, read through it thoroughly, and then show up and ask questions.

And we'll do our best to provide you as much insight as we can, but appreciate you all listening. Talk soon.