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For years, DTCs relied on monthly subscriptions for reliable revenue. But given the current climate and economic uncertainty, relying on those recurring fees may no longer be an option. Some brands, like at-cost goods seller Italic, are going back to the drawing board by truly "cutting out the middleman." However, access to these no-markup products comes at a cost of an annual membership.
As the pandemic continues, non-essentials focused on health and wellness are enjoying an upswing while riding the uncertainty wave. The already-booming CBD industry, which took off about two years ago and was already teetering on saturation, has extended its momentum thanks to the current wellness-focused consumer behaviors.
Blue Apron recorded its first profitable quarter since going public three years ago. However, the meal kit service's luck is likely to end here, as mounting struggle to retain customers and the costs of attracting new ones continue. For its third quarter outlook, the company plans to ramp up marketing dollars again, in hopes of attracting new customers, and that likely will come at the cost of current profits.
In a way, pre-sales and waitlists are counterculture to today’s “fast delivery” windows, but they can also be a vital tool in building a customer base during uncertain times. For new brands like direct-to-consumer A/C maker July, pre-orders gave them two benefits: the opportunity to make connections and manage the uncertainties, said co-founder
Out-of-home advertising has slowly picked back up in recent months. But now DTC brands, who've long favored the sleek subway ads, are finding new ways to target potential customers as pedestrian foot traffic picks up in cities. Using LinkNYC kiosks allow new brands, like United Sodas, to modify campaign creatives based on daily factors "down to the weather, news cycle and even nearby restaurants," said CEO Marisa Zupan.
Same-day delivery of food and alcohol has become expected for many consumers. This means third-party delivery services have to get even more creative in retaining and gaining new users. Besides consolidating, the latest strategy for companies like DoorDash and Postmates is to go back to the drawing board and offer non-food items.
Instagram has become a vital and affordable tool for local mom and pop shops, especially when it comes to live updates on hours of operation, product availability and reopening plans. With the pandemic’s quickly-evolving nature, the platform's casual posting nature better lends itself to this info than Google. Meanwhile Google's small business information is often outdated or incorrect.
The unit economics and ethics of VC-backed delivery apps have been questioned for years. However, the pandemic has brought these issues into focus and lent an alternative crop of services the chance to step in and partner with local restaurants. Platforms like Slice, Seated and Chowbus hope to reduce fees for owners while making online takeout ordering a more sustainable model.
The shift in real estate planning, along with healthy online sales, has changed the way DTC brands think about real estate. It's also why the role of experiential stores -- those like Showfields, Neighborhood Goods and B8ta -- could be even more important to brands when it comes to awareness and conversion.
Returns and exchanges have always been a pain point for both customers and retailers, especially online. However, factors like safety concerns and shipping delays have prompted retailers in evolving their policies to be more flexible. In theory, this strategy would result in an influx of refund requests during the e-commerce boom. Instead, the competitive perk is creating more opportunity for sales and longterm customer loyalty among brands.
Retail workers, especially in grocery and delivery, were lauded for being on the frontlines when the coronavirus outbreak first began. But the treatment of these often-exploited employees hasn’t always matched brands’ sentimental commercials, says one worker.
Long before Covid-19 hit, the industry had been grappling with the so-called retail apocalypse. Now that the pandemic has exposed many of the supply chain’s weak points, brands are rushing to pivot their strategy to survive.
First came wine boxes, now it's time for curated cocktail kits. As the virus waves continue, services argue consumers are prepared to play home mixologists beyond the pandemic. Which is to say: craft cocktail kit delivery is having a moment.
Even as retailers are given the go-ahead to reopen, concerns over inconsistent foot traffic is yet another factor in deciding to do so. As regions experience a second wave, a return to normal activity levels is becoming further out of reach. For brands faced with the decision of when to reopen stores, this means taking into account the pros and cons of getting immediate business through the door now when it may be more prudent to wait.
Despite virus exposure fears, individualized samples aren't always the answer, said Deciem co-founder and CEO Nicola Kilner. Despite launching a successful virtual try-on program, "The Abnormal Beauty Company" will continue allowing customers to test products at home for up to a year.
It took a trip to London for Emily Schildt to realize that American grocery stores could do better. "I came back personally really yearning for a grocery store experience like I had there," she said on the Modern Retail Podcast. "They were just beautiful spaces in which to shop -- gorgeous products, but really thoughtful display and design." Whole Foods changed with its acquisition by Amazon in 2017, Schildt feels, and another bright spot, Dean & DeLuca, has closed doors and scrapped expansion plans. Last year Schildt founded Pop Up Grocer, a traveling showcase of a few hundred products that sets up in U.S. cities for a month at a time.
Read MoreAt the Modern Retail Virtual Forum, we’ll bring together senior retail marketers online to discuss the challenges they’re facing and the solutions they’re seeking in the era of smarter retail.
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