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.
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.
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.
Companies like The RealReal, which is now public, StockX and Poshmark have been garnering increased attention and shining a light on the business of reselling goods. This kind of commerce has been around for years, but these startups believe they're part of a burgeoning and soon-to-be dominant retail industry.
As direct-to-consumer brands have started to branch out from their bread-and-butter digital marketing channels like Facebook and Google and explore channels like TV, out-of-home and direct mail, pressure is building to figure out which of these channels are most effective at driving sales.
Most, if not all, DTC companies don't launch with a loyalty program. Given that these brands are often first built around a single "hero product," that doesn't leave them with much room to offer customers additional add-ons once they spend a certain amount. But, six-year-old lingerie brand ThirdLove decided to launch a loyalty program, called Hooked, in November in conjunction with a revamp of its promotional offerings.
To Harbinger Ventures founder Megan Bent, there are three forces at play in CPG that makes it a ripe category for new investment: Customers are seeking out brands that fit a new set of expectations around ingredients and positioning; big corporations, meanwhile, aren’t innovating and bringing new brands to market as fast as startups; and retailers need differentiated selection to bring customers into stores.
Late last year, DTC footwear brand Allbirds surpassed a $1 billion valuation, making it one of the largest DTC success stories of the last decade. But while an eventual IPO from either Allbirds or one of the other comparable DTC juggernauts like Warby Parker seems inevitable, it won't necessarily open the floodgates for others in the space.
Scott Cutler, the new CEO of StockX, has experience getting brands to work with, not against, resale marketplaces. As the former president of StubHub, Cutler was responsible for signing partnerships with entertainment companies and sports teams to bring a greater air of legitimacy to the resale ticket marketplace. Now, Cutler is looking to convince more brands to join forces with StockX as the sneaker resale landscape gets more crowded.
As Ro, the parent company of telemedicine brands Ro, Rory and Zero, looks to diversify its marketing mix, the company is looking to partner more with institutions that its target audience already trusts. Earlier this month, Roman, its men's focused brand which sells generic hair loss and erectile dysfunction medication over the internet, announced that it signed a multi-year deal with Major League Baseball to sponsor its television and digital media coverage around Father's Day.
A growing number of health and beauty brands are turning to cloud-based systems that can handle customer, financial and inventory data across all processes, from production to payment.
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