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As direct-to-consumer brands rush to sign leases, swimwear brand Andie is taking a more methodical approach. The swimwear brand has two pop-ups in the works – one in Sag Harbor that opened at the beginning of the month, and another in Berkeley that’s scheduled to open on May 27," “It’s still early for us in our retail journey, and I think there’s a lot for us to learn,” founder Melanie Travis said.
Umamicart launched in March 2021 as an online grocer offering Asian products. Early on, the company began adopting a shoppable recipe strategy to drive sales and meet consumers’ needs. Now, over 50% of Umamicart’s sales come from its shoppable recipes.
At the Modern Retail and Neighborhood Goods Future of Commerce Panel held in New York on Tuesday, three founders of DTC brands – Thousand Fell, Maude and Act+Acre – spoke about how they choose retail channels, not just for sales but also as a platform for discovery.
Direct-to-consumer glasses brand Warby Parker is focused on widening its suburban store footprint to grow sales. The retailer opened eight stores in the first quarter and plans to open 40 total across 2022, primarily in suburban locations. While analysts interviewed by Modern Retail praised the strategy as a smart diversification tactic for the brand, they warn about the costs of expanding too quickly in an inflationary environment.
Like many brands attempting to drive sales and build a following, Brutus Broth has also partnered with online content creators, albeit the furry kind. The dog food brand has partnered with pet influencers like Haddie the Pirate Dog, Dachshunds Of NYC and Dogumentary of Jake, all of whom boast thousands of followers on Instagram, to drive sales to local stores that carry Brutus Broth and boost brand awareness.
Armed with new funding, retailers and traffic growth, sneaker marketplace Kicks Crew aims to help more mom-and-pop sneaker retailers launch a digital presence. Sneaker marketplace Kicks Crew enables itself to list over 400,000 styles from brands like Nike and Adidas by serving as an e-commerce aggregator for smaller retailers and boutiques across the globe. Kicks Crew lists, ships and authenticates products across these retailer partners in what it calls a "business to business to consumer" model, similar to Farfetch.
As inflation continues to rise, more companies are betting on bundles to drive sales. With bundles, the ultimate goal is to create bigger basket sizes, as well as to drive up repeat purchase rates in specific categories. However, some brands are also using the strategy to help reduce supply chain-related costs, such as shipping and packaging.
At Peloton, revenue dropped 23% year-over-year to $964 million in the brand's fiscal third-quarter earnings presentation today. Losses, meanwhile, grew to $757.1 million in the quarter. To return to growth, the brand plans to focus on growing membership in its fitness app, cutting prices of products to drive sales and expanding customer acquisition cheaply by entering third-party retail.
The direct-to-consumer startup boom has subsequently created a growing arms race in fulfillment over the past couple years, but which hit a peak last week. Last week, Shopify announced that it was acquiring Deliverr, a fulfillment startup that integrates with marketplaces like Amazon, Walmart and eBay for $2.1 billion.
After pausing physical expansion during the height of the pandemic, piercing studio startup Studs is plotting a rapid expansion throughout 2022. In the past few weeks, Studs opened two new shops, bringing its total to 11 locations across the country. Five of Studs’ current stores opened during the first four months of the year. As it expands its footprint, Studs is trying to strike a balance between shops in high-trafficked shopping hubs and residential neighborhoods.
These days, many brands start out online, where they have control over their merchandising and displays. However, once they start selling through retail partners, they face more challenges such as competing for shelf space and high-traffic aisles. This is why blender brand BlendJet is creating its own store fixtures to cultivate a store-within-store feel.
It’s easier than ever to start a direct-to-consumer brand, but it’s harder to scale one. But this changing landscape has given rise to a new realization: that there’s never going to be one marketing channel, one community-building tactic, or one product development strategy that every brand can embrace to rise above the competition.
For many direct-to-consumer brands, entering physical retail has become a standard growth strategy. At this week's Modern Retail DTC Summit, Fly by Jing founder Jing Gao highlighted the opportunity and challenges of selling through national retailers.
Fast growth comes with added obstacles, as many direct-to-consumer brands have shown over the years. Growing a digitally-native brand, both online and through wholesale partnerships, requires "failing fast and moving quickly," said luggage brand Béis' president Adeela Hussain Johnson.
After relying on digital sales for a couple of years, DTC brands are back to investing in physical retail. At this year's Modern Retail DTC Summit, Brooklinen's vp of retail explains how the bedding and homeware brand is going about its store expansion.
Target's operating margin dropped from 30% to 26% year-over-year, as the retailer discounted inventory, navigated supply chain issues and increased staff wages. Analysts explained that Target's earnings highlight the increasing difficulty of getting the right product at the right time amid headwinds ranging from inflation to continued supply issues.
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