Capture the Margin, Compound the Data

Published 2023-08-22 · Updated 2026-06-29 · By Alan Wizemann

Topics: Digital Marketing, DTC Strategy, Performance Marketing, Growth Leadership

When I arrived at Munchkin, the question I kept getting asked was how we should think about the website, and for a while I tried to answer it the way it was being framed, which was as a kind of inventory problem – another shelf, another door, another place to put the same products. That framing is comfortable for a company that has spent decades winning at retail. It slots the new thing into a model everyone already understands, and it is also, I came to believe, almost completely wrong. A website is not another store, and the longer I sat with it, the more I felt that the entire opportunity was being quietly thrown away by treating a direct relationship as if it were a smaller, less efficient version of the one we already had with the big retailers.

So I started saying it plainly, in rooms where it landed as a slight provocation: digital is direct-to-consumer, and direct-to-consumer is a first-party relationship, not a competing channel. That sentence sounds like a tidy slogan, but it changes what you are even trying to do. If the website is a store, you measure it against the stores, and it loses, because it is smaller and the giants you sell through will always move more units. If the website is a relationship, the comparison stops mattering. The goal becomes something else entirely – to understand the customer, to sell to them directly, and to use both the margin you capture and the data you collect to compound the value of the whole enterprise over time. That last part is what compounds, and it is the part a channel mindset can never see.

The mechanics of it are not mysterious, even if they take discipline to hold onto. When you sell through a retailer, you give up a slice of the economics and, more quietly and more expensively, you give up the customer (you never learn who bought, why, or whether they will come back). When you sell direct, you keep that margin and you keep the relationship, and the two reinforce each other. The captured margin funds the next acquisition, the next product, the next test, while the first-party data makes each of those moves smarter than the one before it. I came to think of it as a flywheel rather than a funnel, because a funnel ends and a flywheel keeps turning, and every revolution leaves you with more than you started.

To run it that way, I had to change how the team was built, because the old shape would have quietly defeated the new thesis. Marketing at a multi-brand company tends to scatter itself per brand, with each property running its own version of paid, its own version of lifecycle, and its own loose idea of what a good product experience is. That feels logical and is genuinely a mess. So I built a shared digital leadership model instead – Directors of Paid, of Lifecycle, and of Product, each one spanning every property rather than owning one. The point was not tidiness, it was that a first-party relationship is a craft, and you get better at a craft by doing it across many situations and carrying what you learn from one into the next, which scattered per-brand teams structurally cannot do.

The clearest test of all of this was Curio, a new luxury home-goods brand we were taking to market as a direct-to-consumer business from the very first day, with no retail crutch to fall back on. We ran the go-to-market as a deliberate cadence rather than a single launch event. There was a soft launch first, to learn quietly with low stakes, then a friends-and-family phase to widen the circle and harden the experience, and only then a full launch once we had earned the right to ask the broader market for attention. Around it we ran VIP influencer gifting and what I came to call a direct-mail "sponge" play, where the brand soaks up attention and audience before it ever asks anyone for a sale. That patience is the opposite of how a channel thinks (a channel wants the sale today), and it is exactly how a relationship gets built.

None of this matters, of course, unless you can make the case to the people who own the enterprise, and that case is where the thesis stops being a marketing idea and becomes a business one. So the argument I brought to the board was not about clicks or campaigns or any of the vanity that usually fills those decks. It was about the lifetime value of a customer you actually own versus one you rent through a retailer, about the flywheel and the way it compounds, and ultimately about enterprise value – the long, deliberate, sometimes uncomfortable work of shifting a wholesaler toward owning its own first-party relationship with the people who buy from it. That is a real change in what the company is, and it should be argued for honestly as one.

I do not think the future of marketing for a company like this is buying more ads, even though that is the reflex and there will always be a vendor happy to sell you more of it. The future is owning the relationship, because the captured margin funds the next move and the first-party data makes every move smarter, and those two things together are the only part of the whole machine that genuinely compounds. Everything else you can buy. The relationship you have to earn, and once you have earned it, it keeps paying you back in a currency a channel never will.