Direct-to-consumer brands are disrupting the retail landscape both online and in-store. These digital native merchants have strong brand identities that resonate well with their audiences. Their hyper-focused on the customer experience, changing the way retailers should think about customer interactions. Most importantly, they’re taking control of their consumer data allowing continuous innovation and improvement.
Direct-to-consumer is a winning formula in retail right now and more brands are popping up than ever before. Look at why this retail model works and some of the top DTC brands out there now.
Definition of Direct-to-Consumer
Selling direct-to-consumer, commonly referred to as DTC or D2C, means merchants sell products directly to end users, without third-part retailers, wholesalers, or any other middleman. Since they don’t rely on traditional distribution models, most DTC brands sell exclusively online. This allows them to offer larger product assortments and reach more customers directly.
How the Direct-to-consumer Model Wins
Direct-to-consumers brands are disrupting multiple retail categories like apparel, beauty, pet food and mattresses. In competitive spaces, these brands are using digital tools to build loyal audiences based on brand authenticity and direct communication. Since these brands don’t rely on a relationship with other middleman to sell their products, this retail model can give merchants an advantage of their competitors and even some shoppers a better deal.
Advantages of Direct-to-Consumer Selling Model
A major distinction of DTC brands is their control over prices. Without selling through third-parties, DTC brands can avoid multiple markups along the way that are passed to consumers. Notable DTC brands known for their radical prices are Casper offering mattresses and Warby Parker offering $100 prescription glasses.
Further, DTC brands don’t consumers not to wait for extreme markdowns in-stores before they buy. Department stores aggressively and consistently run sales leading to consumers to wait for markdowns before they start buying. DTC brands instead can keep consistent prices online and consumers are willing to pay the full price for high-quality products.
Without selling through third-parties, DTC brands also have more control over their brand image. They don’t rely on others to display it properly or favorably. Brands don’t compete with others for shelf space, either. With full control over images, messaging, and customer interactions, DTC brands can have a direct dialogue with their audience that’s consistent. Many DTC brands have a strong brand mission or purpose that allows audiences to become part of bigger movement.
Another top advantage of selling direct-to-consumer is owning your own customer data. Merchants can collect first-hand data about how customers interact with your brand online. This data drives effective strategy down the road. You’ll know how to respond to customers now and evolve to meet their needs. Brands selling through third-parties don’t always have the luxury to collect and act on meaningful consumer data, when it’s tied up in someone else’s systems.
Disadvantages of Direct-to-Consumer Selling Model
Just like any retail strategy, there’s a few drawbacks to selling direct. Overall, it can take longer to build a reputable DTC brand. Merchants must invest in their products, procure inventory, and build an audience – mostly by themselves.
Successful DTC brands usually have a strong brand image, but they must rely more on their own marketing efforts to drive word of mouth and sales. You don’t get to profit from a distribution channel that already has an established customer base. You can’t rely on that first big order from an established department to justify buying that inventory upfront. Website visitors don’t happen overnight. Brands must be willing to work more upfront to drive sales later.
Lastly, DTC brands usually thrive off selling exclusively online or through other digital channels. While online shopping is continually growing, not all products are best sold online. There are certain items better left for consumers to touch and feel before they buy. For certain DTC brands, this could require you to find innovative ways to increase consumer’s confidence when buying online or investing in physical stores to reach customers.
Top Direct-to-consumer Brands
|Wary Parker||Prescription glasses that customer’s can try on at home||2010||https://www.warbyparker.com/|
|Glossier||Skincare and makeup||2010||https://www.glossier.com/|
|Casper||Mattresses, pillows, bed frames, and bedding||2014||https://casper.com/home/|
|Everlane||Apparel with transparency into how items are sourced and prices||2010||https://www.everlane.com/|
|Dollar Shave Club||Subscription service for men’s grooming and shaving needs||2011||https://www.dollarshaveclub.com/|
|Harry's||Subscription service for men’s grooming and personal care products||2013||https://www.harrys.com/en/us|
|The Honest Company||Founded by actress Jessica Alba, wellness baby and beauty products||2011||https://www.honest.com/|
|Rothy's||Women’s footwear from 100% recycled plastic water bottles and other recycled materials||2012||https://rothys.com/|
|GymShark||Workout clothes and gym wear||2012||https://www.gymshark.com/|
|Chubbie Shorts||Men’s casual shorts and swimwear||2011||https://www.chubbiesshorts.com/|
|Pura Vida||Handmade bracelets and accessories and purchases provide full-time jobs for artists worldwide||2010||https://www.puravidabracelets.com/|
|Brooklinen||Luxury bed sheet, pillows, comforters and blankets||2014||https://www.brooklinen.com/|
|Birchbox||Subscription service for beauty and grooming products||2010||https://www.birchbox.com/|
|BarkBox||Subscription service for dog toys, treats, and other goodies||2011||https://www.barkbox.com/|
|Thirdlove||Bras, underwear, loungewear, and nightwear||2013||https://www.thirdlove.com/|
|Away||Travel and lifestyle brand||2015||https://www.awaytravel.com/|
|Allbirds||Footwear company that is environmentally friendly using natural materials like wool, eucalyptus tree fiber, and sugar cane||2014||https://www.allbirds.com/|
|Quip||Oral care products and dental services||2014||https://www.getquip.com/|
|Rent the Runway||Rental service for designer apparel and accessories||2008||https://www.renttherunway.com/|
|United by Blue||Sustainable outdoor apparel and accessories that removes 1 pound of trash from waterways for every product sold||2010||https://unitedbyblue.com/|
What are some of your favorite DTC brands out there? Let us know in the comments below!