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There's a new sought-after investor for tech startups that serves a lot of direct-to-consumer brands -- and it isn't a traditional private equity or venture capital fund. It's Shopify. That was made clear last week, when Shopify announced that it invested in Yotpo.
Workwear has long been dominated by big players, such as Dickies, Carhartt and Duluth. While other apparel categories have been taken over by digitally-native brands, workwear had remained stagnant until now. A new crop of DTC startups want to change that.
When CPG startup Brightland launched in 2018, it launched with just two products: two different varieties of olive oil. Since then, the company has expanded its product line to include four different flavored olive oils, two different varieties of vinegar and this week, launched a line of honey. Brightland typically partners with other companies, and does limited-edition runs, in order to test out new products.
Brands are raising money, and venture capitalists have seemingly endless money to throw at them. And it's happening at a record pace. It's a big change from a little over a year ago, when DTC brands were said to be facing a reckoning.
The weekly "drop" is quickly becoming a major release tactic among direct-to-consumer food brands. Take for instance, Last Crumb, a luxury cookie brand that launched in May and has a growing lottery-like waitlist of eager customers. The weekly release method, long used by streetwear and sneaker brands, is being applied to the food space.
Direct-to-consumer startups have now been grappling with manufacturing delays, increased prices of raw materials and astronomical costs for shipping containers for close to a year and a half now. And the challenges show no signs of subsiding.
In its S-1 filing with the SEC, DTC footwear brand Allbirds unveiled its goal for a sustainable public equity offering,” or an “SPO." The document also unveiled major operating losses and a lack of profitability for the well-funded company.
For the past few years, Warby Parker has been cited as an example of the rare direct-to-consumer startup capable of turning a profit -- the company first noted in 2017 that it achieved profitability on an EBITDA basis. But when the company filed its S-1 last week, it revealed that the path to profitability remains bumpy -- and it served as a good proxy for the biggest challenges DTC brands face in 2021 in turning a profit.
In the past, Cupshe focused on selling low priced swimwear on Amazon and its own DTC site, driving $150 million in revenue this year. Last week, following a $15.5 million funding round in March, the brand is expanding to athleisure and diversifying its marketing streams.
Warby Parker is the latest direct-to-consumer company planning to go public. The eyewear brand, which was founded in 2010 and currently has 145 stores, is preparing for a direct listing on the NYSE. The debut will come after years of major revenue growth coupled with operating losses.
After years of scooting by on beautiful aesthetics, some startups are feeling the ripple effects of DTC disillusionment. That is, customers (and high-profile writers) are increasingly expressing remorse after spending a premium to buy beautiful cookware or bedding from a startup that they think is more ethical than traditional retailers.
Despite the fact that shoppers are likely to receive a dozen-plus emails from retailers each day, direct-to-consumer startups are constantly trying to wedge their way into people’s promotions tabs. And email marketing is only likely to become more crucial -- and more complicated -- for any burgeoning DTC startups, thanks to privacy-focused changes in the digital marketing landscape.
With holiday planning well underway, DTC startups are planning for the 2021 holiday season to be just as chaotic as last year's. While they hope that carriers like UPS and FedEx will be better equipped to deal with the surge in e-commerce orders, port delays are shipping container shortages are in some cases worse than last year.
Rarely, if ever, does a startup’s first year in business go according to plan -- but DTC founders who launched their businesses in 2020 had to deal with an unprecedented amount of chaos. Now, going into their second year of business, these startups are ramping up marketing investments, and resuming some of the brand-building tactics they previously had to put on hold.
Within the past several years there has been an explosion of new specialty marketplaces through which e-commerce brands can also sell their products. As a result, e-commerce brands have more options than ever before when considering where to sell their products online -- and many of them are expressing more interest in moving beyond DTC distribution earlier on.
Watch this on-demand webinar where experts discuss the changes to the back-to-school season and what it means for retailers now and in the future.
In 2020, Amazon Logistics delivered 4.2 billion parcel shipments, up from 1.9 billion in 2019. It now makes up, by volume, 21% of the parcel shipments in the U.S., behind the USPS (38%) and UPS (24%) but ahead of FedEx for the first time (16%).
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