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For DTC brands, the year of profitability will have to wait

A month ago, I was talking to the founder of a one-year-old direct-to-consumer startup who was out fundraising. The founder told me it was a weird time to be fundraising. The coronavirus outbreak was just starting in the U.S, and some investors were already starting to get hesitant about deploying capital. Additionally, many of the investors the founder was meeting with were looking for companies that could display a surefire path to profitability, but without sacrificing high growth rates. In the month since then, things have only gotten weirder. Months ago, steps that were being billed as smart and necessary in order for an e-commerce company to become profitable, like expanding wholesale partnerships and opening their retail stores, have now turned into logistical nightmares as most stores remain closed.

Latest Stories

  • APR 03, 2020

    As the DTC reckoning accelerates, founders turn to each other for advice and sanity

    The reckoning was a while in coming. It just wasn't expected to come like this. After all, people on Twitter, that favorite platform of the direct-to-consumer startup community -- and plenty of articles on this site as well -- love to talk about one of a few things: If there's a direct-to-consumer ceiling; the best way to acquire customers, and the inevitable slowdown and burst of the DTC bubble as unprofitable businesses are due to run out of cash, with no investors left to fund them. And thanks to the coronavirus outbreak, that last one seems to have accelerated. "The coronavirus outbreak notwithstanding, there were a lot of issues that were spread out through the rest of the DTC ecosystem going into the first-quarter of this year," said Jeremy Cai, CEO of Italic, which sells luxury bedding and handbags. "I feel like we are settling into a new normal in many ways of being conservative," he said.

  • MAR 30, 2020

    The future of toy stores isn’t in selling you toys

    Toy stores haven't fared well over the last century. But a new crop of retailer are trying to rethink the entire category — and make it less of a toy store and more of an experience. Will it work?

  • MAR 27, 2020

    Mall Rats: Gen-Z shoppers are rerouting the future of physical retail

    As “retail apocalypse” rumors continue to fly, teenagers are reviving shopping centers’ foot traffic. Among the draws are a social experience, immediate gratification, a personal branding opportunity and a much-needed break from their mobile phones.  

  • MAR 26, 2020

    The coronavirus is upending the direct-to-consumer calculus

    As brands struggle to stay afloat in light of the coronavirus's spread, what the DTC industry will look like is a big question mark. Big brands will likely adopt DTC-like tendencies, and small startups will probably die. The one thing that's for sure is that earlier doomsday predictions have rapidly accelerated.

  • MAR 26, 2020

    As the concept of a summer job changes, businesses seek to woo Gen Z

    There's more ways than ever for teens to make money. Some teenagers are foregoing the typical 20 hours per week part-time job in favor of starting their own side hustles, like promoting sponsored content on their Instagram pages or selling secondhand clothes. As a result, businesses that rely on a lot of young employees are having to offer more perks in order to convince teenagers to work for them

  • MAR 23, 2020

    How internet culture and Instagram changed the rules of internships

    When 21-year-old Hunter College student Kenneth Pabon began looking for a fashion internship during his spring 2019 semester, he took a little bit of a different approach to finding his gig. Pabon did not use Hunter College’s career advising office or scour online job boards like LinkedIn, where he does have a profile, or Indeed. Instead, he Instagram direct-messaged two of his favorite fashion influencers, Sophie and Charlotte Bickley, sisters behind the website and social media accounts Yin 2My Yang.

  • MAR 20, 2020

    How brands are adapting to the expectations of an increasingly vegan generation

    Studies suggest around 80% of Gen-Zers expect to consume fewer animal-related products in the coming year, over 30% intend to be on entirely meat-free diets by 2021 and 44% think being vegan is cooler than smoking. But Gen Z’s culture and attitudes surrounding plant-based products are very different than those of their elders, and what’s resonated with Millennials isn’t going to cut it with a new generation of consumers for whom availability of non-animal-based products is expected.

  • MAR 19, 2020

    The saddest generation: Why Gen Z is the most anxious generation ever

    Alex is a 22-year-old social media manager for a startup. Six months ago, while standing in a crowded No. 3 express train on the way to work, he had a panic attack. “I was staring at my phone, trying to simultaneously respond to a Slack message from my boss but also scrolling through Instagram and texting a friend when I thought I was going to die,” says Alex (who didn’t wish to use his last name because he doesn’t want to be known as “the depressed guy” at work). “I literally thought I was being crushed under what felt like a mountain of work, overwhelmed, and messages were coming at me from everywhere, and I just wanted to die.”

  • MAR 19, 2020

    TikTok Royalty: Here are the stars you need to know

    Most adults have probably never heard of Loren Gray. But plenty of teens know all about the TikTok celebrity with 38.4 million followers. What exactly makes a creator like Gray soar in popularity is somewhat of a mystery, but those who “understand trends and become early adopters are more likely to gain more traction,” says Ariadna Jacob, CEO of Influences.

  • MAR 16, 2020

    The New QVC: Gen Z is driving a livestreaming boom

    QVC may still be a dominant player in interactive shopping, but new entrants include app providers focusing on livestreaming shopping and social media companies building out their commerce capabilities. 

  • MAR 12, 2020

    Explainer: What are Chinese KOLs?

    Here is how China's peer to peer KOL marketing, known as the drivers of “social commerce,” help brand achieve sales.

  • MAR 05, 2020

    Since launching in-house delivery program, DTC furniture company Article now delivers half of its orders in under a week

    Last January, direct-to-consumer furniture brand Article took a step that's still relatively unusual for a startup: it launched an in-house last-mile delivery program. As an online-only startup that has yet to open a single store, Article viewed building its own in-house delivery operation as a necessary customer service investment. The biggest benefit of launching ADT is that it has allowed Article to reduce delivery times. The company is now able to deliver roughly half of its orders in under a week, compared to 30% in 2018

  • SEP 17, 2020
    Sponsored

    For marketers, 10 tactics are driving advertising success on Amazon

    One thing is true for nearly all conversions on Amazon: They’re captured by products on page one of the search results. And a significant share of purchases go to just the top few results.

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