Many DTC brands are no longer happy selling just products. Instead, they're expanding into services and platforms. But is this strategy to scale achievable or just empty promises to investors?
Children's apparel brand Rockets of Awesome is opening its first pop-up store in New York City on August 8. As a company that caters to both children and parents, it's looking at its store as a way to figure out how they want to shop together.
When five-year-old startup Eight Sleep released a new product in February, a $1,995 smart mattress that offers dynamic temperature adjustment, the company used the launch to kick off a "pretty intense testing phase" of new marketing channels, according to senior vice president of growth Ori Klein.
Most digitally-native retail brands start small, but as they grow they increasingly need to scale their customer service program. Recent headlines from growing companies like Rent the Runway illustrate the growing need DTCs have for centralized and proactive customer service programs.
Outdoor Voices is dipping its toes further into the editorial game. The athleisure brand launched today a content marketing platform, The Recreationalist, which includes a blog and a zine. Outdoor Voices' overall mission, according to the brand, is to "get the world moving" and to "free fitness from performance." The Recreationalist will be speaking to that ethos as a hub of "guidance, inspiration and motivation."
Like other digitally native brands, ThirdLove is opening its retail store to get in front of customers they weren’t reaching online through marketing efforts, or because they didn’t want to shop a brand for the first time online. By opening a store now, ThirdLove is catching up to other direct-to-consumer brands that have already tested temporary retail stores and are opening permanent ones.
As subscription startups grow up, they're finding that they constantly have to add more flexibility and variety to their offerings in order to grow their customer base. Startups like Bark, Stitch Fix and Rent the Runway built their value proposition on the fact that they offered more flexible terms than traditional subscription services that arrived like clockwork on the first of the month, and required 30 days notice to cancel.
As a number of startups are now competing to build more modern stores for direct-to-consumer brands, they are starting to think about how they can help these brands grow beyond just giving them a space to sell their product. Startups like Bulletin, Neighborhood Goods and Showfields increasingly want to build solutions to help brands grow online and offline.
Direct-to-consumer health care brands are starting to grow up, but still face an uncertain road ahead as some doctors express concern about the rapid growth of telemedicine. Companies like Ro and Hims, which got their starts selling generic erectile dysfunction and hair loss medication respectively direct-to-consumer, have now grown to encompass multiple brands
Last year, VC firm Greycroft announced that it was launching a joint $50 million fund with grocery chain Albertsons to invest in startups and platforms to power the grocery sector. Greycroft partner and co-founder Ian Sigalow, who manages the Albertsons fund, broke down the fund's playbook, how the firm is approaching grocery and how he sees traditional brick-and-mortar chains like Albertsons evolving.
Robin Li, principal at GGV Capital, believes that as more e-commerce and direct-to-consumer brands are looking to diversify their marketing mixes, they should be more open about sharing what's working for them on different channels.
Lalo is approaching its expansion with a steady drip of product launches that establishes category expertise, decluttering a confusing shopping experience for baby products, but without relying on the hero product approach that can box new brands into a specific one-product niche early on.
New alcohol brands are using online content and marketing strategies to appeal to younger demographics and apply a DTC sensibility to booze, one category that – unlike mattresses, razors, athletic wear, beauty and household products – has only recently seen the rise of direct-to-consumer contenders.
As Boxed continues to add to products to its private label brand, Prince & Spring, it's looking for more ways for the brand to stand out outside of Boxed, and continues to experiment with which promotion type will drive up average order value. Boxed launched Prince & Spring four years ago. Now, approximately 100 of the 1,800 SKUs that Boxed carries are Prince & Spring products, and Prince & Spring accounts for about 15% of Boxed's sales.
Earned media isn’t free. But brand founders are increasingly prioritizing eye-catching branding and a hefty PR strategy at launch in order to separate themselves from the Instagram brands that audiences are now conditioned to scroll past, and are also growing increasingly skeptical of.
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