The DTX Company, Tim Armstrong’s DTC investment firm and marketing service, today launched a new concept called Unbox that will build a platform for brands in the program to reach new customers through events, offline retail activations, catalogs, TV and mobile, targeting areas largely untapped by young direct-to-consumer companies that have so far focused their marketing energies on the coasts.
Compared to Facebook and Instagram, Pinterest offers direct-to-consumer brands access to a smaller user base. But, it's starting to become a greater part of their marketing mix, albeit a smaller one, as brands look for cheaper traffic elsewhere as advertising costs on Facebook and Instagram continue to rise.
Accurate consumer data is a goldmine for companies. While businesses have sought out feedback to inform future product design, DTCs provide a strengthened relationship between brand and customer. With this, more digitally-native startups are able to capitalize on data to receive quick and informative feedback.
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 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.
Nike's direct-to-consumer sales continue to grow consistently, but investments in digital capabilities and real estate continue to eat into the athleticwear company's profit margins. The athletic apparel company reported during its fourth quarter earnings on Thursday that sales from Nike Direct totaled $11.8 billion during its fiscal year 2019, up 13% from last year. To grow DTC sales, Nike has focused on directing customers to sign up for its free NikePlus app.
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.
Haus, which launches online today, is a new aperitif brand selling directly to customers online. Co-founder Helena Price Hambrecht, which has a background at Silicon Valley startups like Skillshare and Uber, worked with her husband Woody Hambrecht, a winemaker, to plot out a modern spirits brand using the sourcing, processing and bottling systems they already owned. The resulting aperitif is wine-based, and contains 15% alcohol.
Iris Nova, the DTC beverage company that launched in 2015 with Dirty Lemon, plans to invest a total of $100 million into startup consumer brands by 2021. The goal is to build out a modern portfolio company for brands in the CPG space to compete with legacy companies like Coca-Cola and Pepsi.
The round was led by VCs and angel investors including Randa Digital, Amity Supply, Cherry Tree VC, Brian Spaly and Scott Belsky.
For 10 Grove, a bedding brand competing in a category already crowded by other players like Brooklinen, Snowe and Parachute, its vertically integrated supply chain is the cornerstone of how it plans to build a “genuine” direct-to-consumer business, according to founder Rana Argenio.
There are no one or two go-to-retailers whose stores fitness startups can start selling their products in before opening their own physical retail space, to learn how their products do in stores. Retailers need to be willing to dedicate floor space for product demos, and to assist with delivery and installation of the bulky equipment. So, startups have been experimenting with pop-ups that allow them to leverage existing retail space to get a better sense of what customers want.
It’s normal for digital marketers to feel overwhelmed when dealing with the challenges that can come with a major launch, but when armed with the right tools and know-how to combat the most common obstacles, your team can set sail without a hitch.
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