By Lydia Martin, Strategy Director as featured in New Digital Age
Over the past five years, the UK’s direct-to-consumer sector has transformed dramatically. But following an explosion of online-first brands during the pandemic, many have become over-reliant on digital media at a time when privacy regulation, the phase-out of third party cookies, and increased automation have made performance marketing harder to control and more expensive to scale.
This means D2C brands are competing in uncharted territory. In this context, we’ve identified four trends shaping how online-first brands can continue to grow and build lasting customer loyalty.
1. First party data & personalisation
With third party cookies disappearing and privacy tightening, smart use of first party data is now non-negotiable. D2C brands must build a strong foundation of consented data – collected through onsite engagement and loyalty programmes – and where possible, begin testing with AI-powered models, to transform those insights into real-time personalisation. Machine-learning models can tailor creative, offers, and product recommendations by audience segment or even individual behaviour.
The sustainable toilet paper brand Who Gives A Crap leveraged their first party sales data to fuel an AI model identifying postcodes for consumers with the highest propensity to buy and activating localised OOH formats and addressable TV in those areas. According to the Data and Marketing Association this led to an uplift in new customer acquisition and average order value, resulting in new customer penetration growth of 3.4.
2. Brand investment & community-building
As CPMs climb and tracking becomes less reliable, brands can’t rely solely on paid reach to drive engagement. As a result, the opportunity for D2C marketers is to double down on owned communities they can nurture directly.
Strategies around this might include co-creating with customers through ambassador programmes, interactive campaigns, and referral incentives. Huel, the UK-founded nutrition brand, recently revealed nearly 20% of its new customers had come via referrals – a direct result of community participation. By treating customers as collaborators, not just buyers, D2C brands build advocacy and long-term brand health that cost-effective performance marketing will struggle to replicate.
3. LTV in an economic downturn
Economic uncertainty has fundamentally altered the D2C growth equation. With acquisition costs rising faster than conversion efficiency, the pursuit of scale through paid channels alone is no longer sustainable. The brands outperforming the market are those optimising for lifetime value rather than volume: prioritising retention, cross-sell, and customer experience as profit levers.
Marketers must identify where marginal spend delivers true long-term value and where it simply inflates acquisition cost. In a more cautious economy, commercial discipline – not aggressive scaling – will define who grows sustainably.
4. The “phygital” age
Finally, it’s important to remember that physical stores are still the main way people shop, with nearly 80% of retail sales predicted to come from in-store shopping in 2025 (Forrester 2025). While convenience remains important, consumer attitudes have swung towards in-store experiences since the pandemic; according to YouGov the proportion of UK adults who say that if they could buy all they needed online, they would never go in-store has dropped by nearly 10% in the past three years.
For D2C brands, this is a chance to rebuild trust and differentiation. Pop-ups, brand events, and retail collaborations provide the tangible, human connection that digital advertising alone can’t replicate. The most forward-thinking brands are treating these “phygital” activations as content engines, generating user-generated content and social storytelling that extend the life of every event.
Skin+Me brought its D2C model offline this summer with The Maze, a pop-up at Battersea Power Station to launch a new SPF 50 Daily Defence Moisturiser. Supported by paid media managed by The Kite Factory, through digital vans and six-sheets across Battersea and Waterloo, the activation blended physical experience with targeted OOH to drive awareness and engagement.
As the D2C market continues to mature, it will become increasingly clear which brands are staying ahead of these trends and investing for the future. The winners won’t just capture attention; they’ll earn customer loyalty with long-term payback.