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Since launching earlier this year, DTC furniture brand Sabai Designs has been on a mission to incorporate its Instagram followers' feedback into the design process. This process of releasing color and design combinations that early followers voted on has resulted in high conversion rates. However, Sabai also found there are advantages and drawbacks to crowdsourcing design ideas from social media.
Levi Strauss & Co has been building out its direct-to-consumer business for years, seeking to lessen its reliance on struggling wholesale partners. But that still didn't fully prepare the denim brand for the new shopping methods every retailer would have to embrace during the coronavirus. For example, Marc Rosen, who joined the company six years ago from Walmart and is now the president of Levi's America's business, told Modern Retail that Levi's had yet to roll out buy online pickup in store. But once its stores closed due to stay at home orders, it had to get the service up and running in a matter of weeks. Rosen spoke with Modern Retail about how the coronavirus has accelerated Levi's tech roadmap.
After surviving the Black Friday rush, direct-to-consumer brands have a new challenge at hand: how to ensure their holiday sales aren't hampered by long shipping delays and going out of stock on certain items. Founders say that they are trying to incentivize customers as much as possible to order early, as well as giving as many details as possible about warehouse and supply chain challenges, in the hopes that shoppers will be as patient as they were in the spring.
One year ago, Clorox launched a direct-to-consumer supplement label called Objective Wellness. Now, Objective is taking another page out of the DTC playbook by partnering with Gravity Products, the maker of the weighted Gravity Blanket. The two are selling 'beauty sleep kits' on each of their respective websites. The move shows that even big CPGs are taking cues from the DTC playbook.
In the five days following Thanksgiving, there's usually a wave of retailers offering anywhere from 20% to 50% off of their products. But this year, the wave of brands offering deals between Black Friday and Cyber Monday will feel more like a never-ending tsunami as brick-and-mortar retailers try to make up from revenue lost during the spring. Still, eight direct-to-consumer startups Modern Retail spoke with said that they plan to swim against the current, and don't plan to offer any steeper discounts during Black Friday than they did last year.
In August of 2019, the Atlanta-based pet supplement company Goodboy launched with a series of products to help dog-related health problems. The site was clean, featuring green and orange colors, and asking shoppers to take a quiz to get a personalized assessment of what products they should buy. Then, the founders began noticing other sites doing similar things. "It was hard to pawn it off as just inspiration," said co-founder Kari Sapp. But this is anything but a unique problem.
Eight years ago, startups turned to Shopify primarily to sell products online. Now, a startup might turn to Shopify to help fulfill orders, get some cash for their business, or use its point of sale system when it opens a physical store. As the startups that launched on Shopify, like Allbirds and Glossier, have grown up, Shopify's influence over the e-commerce ecosystem has ballooned. Now, the company is at an inflection point. The bigger that Shopify gets, the more calls the company faces for it to launch services that solve the biggest pain points of its merchants -- but it could risk diluting Shopify's focus.
Podcast advertising is booming -- particularly in light of the news Spotify recently announced that it is acquiring podcast advertising and publishing platform Megaphone. And direct-to-consumer startups are helping fuel that boom, considering the long-running joke that Blue Apron, MeUndies and Casper are essentially underwriting the shows they advertise on. The Spotify-Megaphone deal could have significant implications for what types of DTC brands are able to advertise on podcasts.
Skincare startup Topicals, which launched earlier this year, has said that it wants to market itself to the idiosyncrasies of Gen Z. With that, much of its content is posted on Twitter or TikTok, rather than Instagram. And its aesthetic and voice has been much more unvarnished rather than the preened tone many people expect from certain brands. On the most recent Modern Retail Talk, Topicals co-founders Olamide Olowe and Claudia Teng spoke about how the company has positioned itself and why it has attempted to rethink its overall brand messaging.
As a behind-the-scenes restaurant vendor, dinnerware brand Jono Pandolfi has relied on wholesale sales for nearly a decade. However, when hospitality and fine dining all but shut down this year, the ceramics company found revenue opportunity in a new segment of customers. Since focusing on growing its DTC revenue, online sales have tripled year-over-year, with overall profits up by nearly 400%.
For many direct-to-consumer brands looking to sell and ship their products through someone's website besides their own, there's still only one dominant choice for them in the U.S., and that's Amazon. Despite the emergence of dozens of direct-to-consumer startups in every category from cookware to mattresses to pet food, no marketplaces have emerged to focus solely on these direct-to-consumer brands. That, in theory, leaves an opening for a new marketplace to create an alternative to Amazon for these direct-to-consumer brands.
One of the dominant moods of 2020 has been paralyzing uncertainty, and it's been particularly prevalent this week as Americans wait for the results of the presidential election. The election isn't the only thing on direct-to-consumer startup executives' minds -- after all, once the election is over, Black Friday is right around the corner. But Election Day also can't be business as usual.
For years, direct to consumer brands had been pouring their marketing budgets into physical flagship stores in hopes of real-world discovery. Now that storefronts are going through a transformation, brands and curators like Naked Retail and Showfields are rethinking the role of popups and stores. Here's what the new DTC showrooms are looking like in the coronavirus world.
There's a new most-talked about acronym in the DTC world these days: SPAC, which stands for special purpose acquisition company. SPACs give startups an alternative way to go public, without going through the traditional IPO. In a SPAC, a group of individuals raise money in order to acquire a company with the purpose of taking it public. At least one direct-to-consumer startup, Hims has already opted to go the SPAC route. But investors caution that SPACs won't entirely replace the traditional IPO process.
Quip's latest retail partnership shows that direct to consumer brands know they need to get into the hands of mainstream consumers to scale globally. It can also help drive subscriptions. As Quip CEO Simon Enever told Modern Retail, establishing brand ubiquity at national retailers “has always been a part of the plan."
With in-person sales largely out of the picture this holiday season, brands must adapt to deliver the frictionless experiences that online consumers expect and demand.
At the same time as retailers are racing to perform ever-faster shipping times, they also appear to be upping the incentives for slow delivery. Retailers, including Amazon, Target and Macy's are all offering shoppers discounts in exchange for longer shipping times. And that split might signal a changing mindset for some retailers -- rather than focusing on speed at all costs, some are taking a more nuanced approach to logistics.
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