Written by: Nicole Ogonowska, IT Growth Manager, Digital Colliers
If you're running a DTC brand in 2026 and still reporting blended ROAS to your board, you're going to lose this year. Not because the paid channels stopped working. Because the math you're using to grade them stopped matching reality.
The LinkedIn version of this was short. Here's the longer version, with the numbers and the plumbing.
The first-order math doesn't clear anymore
Run the arithmetic honestly. Customer acquisition costs across DTC have climbed roughly 40% since 2023, and Meta CPMs kept ticking up through 2024 and 2025. So the same creative, the same audience, the same funnel now costs meaningfully more to acquire the same customer.
Meanwhile, gross returns are eating a bigger chunk than most P&Ls admit. Online returns run around 19-20% of gross sales, and apparel in the UK runs 25-40% depending on category. If you're an apparel brand booking revenue on order 1 and calling it a day, your reported contribution margin is fiction.
Stack that up:
- CAC up ~40% since 2023
- Return rates chewing 20-40% of gross
- UK eCommerce growing only around 3% year over year
That's the squeeze. Single-digit market growth means you can't outrun the CAC problem with volume. You have to earn it back on order 2, 3, 4, or you don't earn it at all.
What the retention data stack actually needs to look like
Most brands I see still have a Shopify dashboard, a GA property, a Klaviyo account, and a spreadsheet somebody updates on Fridays. That is not a retention data stack. That is a reporting stack, and it's optimised for the wrong question.
A retention stack has to answer, at the SKU and cohort level, three questions:
- Which acquisition cohorts are actually paying us back, and by when?
- Which SKUs are loss leaders that reorder well, versus loss leaders that just lose?
- Which customers are worth paying more to acquire, and can we bid up in-channel for lookalikes of them?
To do this you need order-level cost of goods, order-level fulfilment cost, returns joined to the original order (not booked as a separate event), and ad spend attributed to the acquisition cohort rather than the last click. Most brands have four out of five of these. The missing one is usually returns, and it's the one that flips the sign on profitability.
Roughly 30% of SKUs at a typical multi-channel brand lose money per order once you net out returns and ad spend. If you don't know which 30%, you're funding them with the winners and calling the blend healthy.
The metrics profitable brands run their P&L on
The operators I see actually clearing profit in this market have quietly swapped their north star. ROAS is a diagnostic, not a target. What sits on the CEO dashboard instead:
- Contribution margin per order, net of returns. Not gross margin. Not AOV. The number after you pay for the product, the pick-pack, the shipping, the return, and the ad.
- 60-day or 90-day payback on CAC by cohort. Pick a window that matches your cash cycle and hold it. If a cohort hasn't paid back CAC by day 90, it probably never will, and you need to know that before you double the spend.
- Second-order rate by acquisition channel. Meta and Google acquire very different customers. Treating them as interchangeable at the CAC-bidding layer is how brands go broke while hitting their ROAS target.
- SKU-level contribution after returns. Kill or reprice the losers. This alone tends to move total contribution meaningfully within a quarter.
The left-behind risk is real
Here's the uncomfortable bit. The brands that build this measurement layer in 2026 get to bid more aggressively on the customers who are actually worth acquiring, because they know who those are. The brands that don't will keep optimising to a blended ROAS that flatters the losers and starves the winners.
In a market growing 3% a year, that gap compounds fast. One side of it gets to spend more per click and still print money. The other side sees CAC keep rising, cuts budget, loses share, and blames the channel.
The channels are fine. The measurement layer underneath most DTC brands is what's broken. Fix that before you touch the media plan.