Scale Your D2C Brand Beyond the U.S.

By Nick Pietropinto

To successfully scale their brands, direct-to-consumer (D2C) marketers must also scale their reach. That includes not only connecting with more customers inside the boundaries of their native countries, but across wider geographic areas. The first natural step for scaling D2C brands based in the U.S. is expanding into the full North American market. There, you’ll find tremendous untapped potential, particularly in the realm of online sales.

There’s no question that D2C in the U.S. continues to gain traction. U.S. retail marketplace e-commerce sales are predicted to reach $428.3 billion in 2024 — a growth that is forecasted to double by 2027. Specifically for U.S.-based D2C companies, e-commerce sales are expected to grow 16.4 percent in 2025 to reach $197.1 billion. Not bad. But this exponential growth in also not limited to the U.S. alone.

Canada’s D2C Is on the Rise

Looking at the North American D2C market in general, we see a similar high-growth trend. Let’s start with our friendly neighbors to the north. Like much of the globe, Canada has seen a surge in D2C in recent years. In early 2022, online retail sales in Canada totaled around 3 billion Canadian dollars (over $2 billion U.S. dollars), with an estimated 29 million Canadians making online purchase.

In a recent survey, many Canadians voiced a preference for shopping online versus in-person, citing cost savings and convenience as the primary reasons. This shift in Canadian consumer behavior is apparent in the growth of e-commerce sales, which experienced a 75 percent increase in 2020 and generated a total of $5.19 billion Canadian dollars in sales. In 2022, Canadians spent $815.5 billion on retailers — $63.7 billion of which came through online sales. Indeed, Canada is now the ninth-largest market for online retail, and revenue from online sales is expected to surpass $100 billion by 2026.

Despite the rise in e-commerce, Canadian businesses have been slow to embrace digital sales and build an online presence — leaving the door open to U.S. D2C brands to fill the gap and meet the demand. Interestingly, especially for U.S.-based D2C marketers, 45 percent of Canadians do their online shopping on websites outside of the country — including those in the U.S. — citing lower prices and better product range as the main reasons.

Canadian Consumers Make Ideal D2C Customers

But who are these shoppers? Let’s dig into that a bit. About 82 percent of Canada’s total population shop retail online. As of 2022, online shoppers in Canada made more than 26 online purchases per year, with 27 percent avoiding malls and 21 percent avoiding in-store shopping. What’s more, about 16 percent of Canadians had online subscriptions to goods and services in 2022 — a number that has certainly grown in recent years.

By 2020, 37 percent of Canada’s online shoppers were Baby Boomers (ages 53 to 72), with Gen Xers (ages 38 to 52) and Millennials (ages 24-27) coming in second and third respectively. This last younger demographic is expected to drive even more growth in online sales. Canadian’s burgeoning and digital-savvy Millennial and Gen Z populations, now the dominant generation in the country, made an ideal customer base for U.S. D2C brands.

Mexico Ranks Second in Latin America’s Online Retail Sales

Canada has some significant competition coming from the south when it comes D2C opportunities. In general, online sales across Latin America are in hypergrowth mode. Latin America boasted the world’s second-largest e-commerce growth in 2019, and is expected to achieve a 30-percent annual increase though 2025. Coming in second place in Latin America for e-commerce sales — with a solid 27-percent year-over-year growth starting in 2021 and $38 billion in online sales — Mexico offers one of the region’s most attractive and compelling markets for D2C brands.

For starters, D2C brands who sell their products online in Mexico can take advantage of lower cost-per-clicks for their digital campaigns, which, in turn, drives down customer acquisition costs. What’s more, brands that do business in Mexico typically achieve a 20-plus percent growth in profit per order. This potential for profitability is a key factor driving D2C brands to expand into Mexico.

Additional compelling reasons include Mexico’s close proximity to the U.S. along with its sheer market size, which represented MXN 7,779 billion (over $454 billion) in 2022. That market size is predicted to experience a compound annual growth rate (CAGR) of more than 6 percent by 2027. Mexico’s online retail market in 2023 grew around 33 percent to $50.7 billion — outpacing the 22-percent growth rate total of U.S. e-commerce revenue. Online retail in Mexico is forecasted to see a CAGR of 13.3 percent by 2026, continuing the momentum.

Consumer demographics in Mexico should be attracting more D2C brands as well. Mexico is experiencing economic growth, with an expanding and well-educated middle class, rising disposable incomes, more urbanization, and younger demographics with a median age of 29.6 years who are driving retail sales — particularly of the online and omnichannel varieties.

By the end of 2022, Mexico’s online retail market reached 64 million consumers who spent an average of $580 annually per person. And while growing by leaps and bounds, the online retail marketplace in Mexico is still untapped — giving U.S.-based D2C brands a golden opportunity to get in there early and stake out unclaimed territory.

Your Checklist for Expanding into Mexico and Canada

Clearly, opportunities for U.S.-based D2C brands abound in both Canada and Mexico. In order the fully capitalize on those opportunities, however, D2C marketers will need to have the right resources, expertise, and strategies in place. These include:

• Bilingual Customer Experiences: While many Canadians speak English as their primary language (around 76 percent), a significant population (22 percent) considers French their mother tongue. In Mexico, over 93 percent of the population speaks Spanish only, with just 5 percent reported to speak English. As such, it’s critical for D2C brands selling in these countries to provide a seamless bi-lingual experience at every customer touchpoint — from websites to digital and traditional ads to social media to call centers — in order to truly connect with these consumers, drive conversions and sales, and build customer loyalty.

• Omnichannel Approach: As with today’s U.S. consumers, shoppers in Mexico and Canada are using a complex array of platforms to learn about brands and products, and to shop — including websites, social media, linear and streaming TV, radio, outdoor, influencers, email, and more. Embracing an omnichannel approach is just as critical for reaching these audiences as it is with U.S.-based consumers.

• Data-Driven D2C Campaigns: Just as they speak different languages, consumers in Mexico and Canada have different consumer preferences, values, and behaviors than U.S. audiences. Understanding these new consumers requires having access to data and analytics that reveal insight into where and how to best reach Canadian and Mexican customers across all demographics and segments with the right message and media mix. A data-driven approach will also enable you to see what’s working in these markets, and where to make refinements to improve results.

• Media and Vendor Management: U.S.-based brands may not be familiar with media outlets in Canada and Mexico. Likewise, they may not know which locally based vendors in these countries they should be working with, and how to effectively manage these vendors across geographic and language barriers. This is where finding a partner with proven expertise in managing media and vendors in Mexico and Canada can save you significant time and money while maximizing results.

Once you’ve expanded throughout North America, the next step will be to launch your D2C brand globally. Keep a look out for our next article, featuring best practices for expanding into high-growth English-speaking international markets including the U.K., Australia, and New Zealand.

At Double Diamond VIP, we bring extensive experience scaling D2C brands internationally. Reach out to our bilingual expert team today to see how we can help you break into these exciting markets. Learn more at www.TryD2C.com.

Nick Pietropinto is the founder and CEO of Double Diamond VIP. He can be reached via email at nick@doublediamondvip.com.