As more direct-to-consumer startups launch every day, agencies are finding that they constantly have to expand their wheelhouse of skills. Branding agencies are starting to take on performance marketing work, while marketing agencies are taking on more early stage design work. In November, branding agency Red Antler, which did work for Casper and Allbirds, launched a performance marketing arm called Good Moose
There are a bunch of DTC brands that look very very similar. Meanwhile, there are others that solve problems way outside the scope of digital commerce. What's happening is both a mad dash to cash in on the DTC craze, as well as a realization that new brands need to find some sort of competitive advantage -- even if their products look similar to others'.
When Great Jones launched in 2018, co-founders Sierra Tishgart and Maddy Moelis decided to take what they called a "maximalist" approach to design, in order to ensure that their brand stood out many other direct-to-consumer startups at the time that seemed to be taking a minimalist approach to branding. Now, less than two years after Great Jones officially launched, Tishgart already feels like the maximalist approach that was once unique to Great Jones is no longer a novelty.
Amazon has been wooing direct to consumer brands for years by offering them an array of services including financial backing and inventory management via the Fulfilled By Amazon program. For many founders, being on the platform was something to be avoided. But even some that were lured by Amazon’s benefits early on have been gradually making the move off the marketplace.
Venture capitalist and Shark Tank star Kevin O'Leary recently invested in the DTC eco-friendly cleaning product brand Blueland. In his opinion, online remains the best place to grow a business. Modern Retail sat down and talked with him about the direct-to-consumer landscape, and he had a few warnings for companies that don't have their margins in check.
When CPG conglomerate Edgewell announced in May that it was acquiring razor brand Harry's for $1.37 billion, the news was viewed as a win for direct-to-consumer startups. Now, what was once viewed as a surefire deal might no longer happen. On Monday, the Federal Trade Commission announced that it was suing to block Edgewell's proposed acquisition of Harry's.
A few years ago there were only a few DTC cookware brands. Now there are dozens, and they all are trying to tell a similar but unique story. As a result, more of these companies are honing their brand story and trying to figure out product differentiation.
DTC startups didn't invent the practice of bombarding customers multiple times a week with emails. But DTC brands do face a unique challenge compared to other retailers: how to get customers to keep opening their emails when they only have a few products to promote.
In its early days, being direct-to-consumer meant lower prices. Because there was no middleman, so the theory went, companies were offering better quality goods at more competitive prices. But as the industry matures, there has been a shift away from branding DTC products as the most affordable alternative to traditional retail shopping for personal products. The strategy to offer “no markups” was integral for the success of Warby Parker and Everlane, among others when they launched a decade ago. However, that’s no longer the case, as evident from a new crop of luxury DTC brands that are looking to duplicate the model’s biggest success stories, in diamonds, luxury fashion and more.
A new type of restaurant is becoming popular, and you can't sit down in it. Called "ghost kitchens," these delivery only establishments are catching entrepreneurs' eyes and investors' capital.
Robotics has been considered a disruptor for years now. But we haven't quite seen how the automated technology will transform the retail industry. While a number of well-funded robotics startups crash and burn, a few others operating in the background have shown a growing demand for retail robotics.
As more DTC companies face cultural growing pains, Lola's co-founders are trying to build a culture that supports all of its employees.
As subscription startups look to boost their retention rates, they are doing away with the term subscription. Instead, they're pitching customers on joining a membership, where they'll get access to more than just product. The hope is that by giving subscribers access to more exclusive perks like events or special sales, they will stick with the service longer, and spend more money with the company
As CAC costs continue to rise, DTC brands may begin to feel the stress of business reality. The question remains: what comes next for businesses that grew online and are expected to scale beyond $50 million. While some may be able to build solid omnichannel businesses, others may be in the midst of a reckoning.
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Exclusively for Modern Retail+ members: Hear from Colin Darretta, CEO and Founder of Wellpath, on the future of direct to consumer business.Subscribe