DTC967: IG Replay, Kulfi Beauty’s Growth, and Elevate Returns Experience

Good morning,

Here’s what you’ll find in today’s DTC:

• ⏯️ The Instagram Algo’s New #1 Engagement Signal
• 💄 How Kulfi Beauty Scaled into Sephora with Zero Ads
• 🤔 Send This Email To Elevate Your Returns Experience

You’re reading this newsletter along with new subscribers from: Rocket Shippers, DALTON Cosmetics, and Superfans. 👋

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‍💰 Instagram Just Changed The Rules (Here’s How To Improve Your Reach)

If your Instagram engagement is declining, it’s not your imagination.

IG quietly changed its algorithm and now replays are now a top engagement signal. Not saves. Not shares. Not comments.

Why? Because those metrics are easy to game.

Replays signal real interest and longer time on the platform which is exactly what Instagram wants.

Content that gets rewatched is now more likely to:

• Be pushed to non-followers
• Scale organic reach
• Compound audience growth over time

What This Means for Ecommerce Brands

To grow organic reach, you need rewatchable content that feeds the algorithm what it wants.

Here are some creative ways brands can create rewatchable Reels:

1️⃣ Use 7-Second Loop Videos

Short loops outperform traditional Reels because they naturally replay.

Why they work:

• Ending the video so viewers arrive back at the starting point makes the loop feel seamless and more satisfying to rewatch.

Instagram shared these real-world test results:

Traditional Reels:

• 1.2 replays per viewer
• 18% reach to non-followers
• +127 followers/month

7-second Loop Reels:

• 3.8 replays per viewer
• 64% reach to non-followers
• +3,840 followers/month

That’s 30x faster organic growth from a simple format shift!

2️⃣ Use Pattern Interrupts to Stop the Scroll

Your brain is wired to notice when things feel off. One brand’s viral Reel hit 70M views just by adding a subtle cracked-screen effect.

Why it worked:

• Your brain is wired to detect flaws. And the cracked glass effect is so subtle it can be mistaken for a smudge on your screen. What ends up happening is users will pause and replay the video to confirm what they saw.

Pattern interrupts break the expectation of polished content and force attention.

👉 Test visual glitches, unexpected framing, and intentional imperfections so users do a double-take.

The takeaway?

Instagram is rewarding rewatched content. So audit your last Reels and focus on upping your replay rate.

Feed the algorithm what it wants now and let organic reach compound into Q1.

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‍🎧 How Kulfi Beauty Grew From a $5K Launch to 720 Sephora Stores with Zero Paid Ads

Priyanka Ganjoo, founder of Kulfi Beauty, stops by the DTC Podcast and shares why she was motivated to start a beauty brand for the South Asian market.

She started off working on the corporate side of beauty at Estée Lauder and soon realized she wanted to create a brand that was inclusive, joyful, and celebrated her Indian heritage.

Today Kulfi’s products are selling at a remarkable rate.

A Kajal eyeliner sells every five minutes and Kulfi Beauty are now in 720 Sephora stores across North America.

We’ll dive into:

• How Kulfi Beauty recognized a cultural and product gap in representation
• Why the beauty brand started with zero ads and leaned all-in on community and cultural storytelling
• What Priyanka learned launching in Sephora (hint: velocity is everything!)
• The unexpected go-to-market power of a $500 Central Park picnic
• How DTC created a halo effect on retail shelves (and vice versa)
• Why Kulfi Beauty still handpicks every creator they work with

🎧 Click here to listen on Spotify.

When the holiday rush is over, one of the most overlooked retention levers is your returns experience.

Jimmy Kim shares how customers that have a great return experience are more likely to buy again.

Replace cold transactional refund emails with empathetic messaging that keeps the relationship intact.

Follow up with an email that guides customers to a product that might be a better fit.

‍🤖 McDonald’s AI-Generated Holiday Ad Receives Major Backlash

McDonald’s Netherlands is facing backlash over its holiday ad, and it’s a clear warning sign for brands leaning too hard into AI.

The 45-second, fully AI-generated spot uses chaotic, stress-filled holiday scenarios to position McDonald’s as a “safe haven.”

But viewers described the ad as eerie, confusing, and emotionally hollow, with many calling it another example of low-effort “AI slop.”

Learn more here.

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DTC Newsletter is written by Rebecca Knight and Frances Du. Edited by Eric Dyck.

Please note that items in this newsletter marked with * contain sponsored content.