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During its fourth-quarter earnings call, Allbirds executives said they would begin ramping up their wholesale business in 2022. Allbirds' shift is indicative of an industry-wide realization. So-called DTC startups are increasingly expanding to wholesale in search of better margins and access to a wider customer base.
For many venture capitalists these days, direct-to-consumer brands no longer hold the luster they once did. In recent interviews with both VCs and angel investors, many have said they’re investing less frequently in direct-to-consumer brands and focusing more on B-to-B, SaaS and Web3 opportunities.
It's been a turbulent few years for Reformation, but the women's clothing and accessory brand is forging ahead. According to CEO Hali Borenstein, the focus now is on building trust both with customers and employees. "It is all about walking the walk," she said on the Modern Retail Podcast.
Abbott Kinney in Los Angeles, 12 South in Nashville, and M Street in Georgetown are some of the upscale retail neighborhoods that are becoming increasingly populated with DTC brands. Executives at these startups like to say they are not operating on a herd mentality basis, but they all target similar customers and as such, are flocking to the same neighborhoods.
Unbundled, a new free online database made by VC firm Interlace Ventures, aims to bridge the gap between growing brands and their back-end technology stacks. The concept is simple: Unbundled looked at 50 popular online brands currently on the market -- from Warby Parker and Olipop -- and then used publicly available information to list the retail technologies powering their businesses.
After partnering with Bed Bath & Beyond last year, Safely is entering its second physical retail partnership with Walmart. The brand said the tie-up allows the brand to inch closer to its goal of having more than 50% of its business done through wholesale.
DTC startup Firebelly Tea is hoping to help the hot steeped beverage reach the celebrity status of coffee. That's according to co-founder and CEO David Segal, who joined the Modern Retail Podcast this week. Segal isn't new to the tea world -- he founded one of the biggest tea retailers in North America, DavidsTea. After selling his shares in the company in 2016, he is now embarking on a new tea journey.
Travel-focused retailers were in big trouble in the pandemic's early days, losing millions in sales and undergoing mass layoffs. Not Monos though. Thanks to its nimble pandemic pivot the company was able to achieve 400% year-over-year revenue growth in 2020.
Direct-to-consumer sales are becoming harder to sustain for young brands. The customer acquisition cost along is reason to diversify beyond DTC, experts say. That's why DTC home essentials brand Public Goods is leaning harder into supplying small businesses and hospitality spots to grow its wholesale arm.
Last week during its fourth-quarter earnings call, executives from Meta (the company formerly known as Facebook) said that they expected that iOS updates would cost the company $10 billion in revenue this year It's indicative of how, nearly one year later, direct-to-consumer brands are also still struggling to adapt their marketing strategies in a post iOS-14 world.
Direct-to-consumer paint brand Backdrop recently announced its latest retailer partnership: a paint and paintwear collaboration with Madewell. Only 25% of the brand's sales come from retailers. However, the model serves as a longer-term customer acquisition strategy: when customers are actually ready to paint, they'll have been introduced to Backdrop on previous apparel shopping trips.
Last week, clear dental aligner brand Candid announced it was shutting down all 45 of its stores as well as its direct-to-consumer business in favor of its dental clinic model, CandidPro. Candid's CEO and cofounder Nick Greenfield believes the changes in iOS and advertising have made direct-to-consumer sales increasingly untenable, even though the model currently account for over 90% of the company's revenue.
For decades, the powdered baby formula space has been largely dominated by large CPG conglomerates. However, an ongoing shortage and parents' concerns over ingredients have created issues for both suppliers and retailers. These factors are positioning DTC formula brand Bobbie for growth, its co-founders tell Modern Retail.
For the past two years, direct-to-consumer startups have been riding high on a wave of increased online shopping. But that period of exponential growth may be coming to an end if Peloton’s fortunes are any indication.
Upscale grocer Erewhon has struck a unique “affiliate retail” partnership with subscription wellness company Seed Health. As part of the deal, Erewhon will stock the startup’s sole probiotic supplement at its seven locations in Los Angeles from March until the end of the year. The grocer will then net an additional fee as the lead generator when an in-store customer signs up for online refills.
Away's new line is yet another sign that retailers are catering to new travel habits, which involve an increasing amount of car trips, close-to-home getaways, and outdoor adventures.
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