Direct-to-consumer (D2C) brands are on a rapid ascent, disrupting traditional retail. These digitally native brands are experts at cutting out costs and efficiently acquiring customers. They are also succeeding as “brands” in a very traditional sense—by identifying the unmet needs of modern consumers.
What’s driving the growth of D2C brands? Estimates peg the number of D2C brands at more than 400 today, while online trends suggest web traffic has roughly doubled in the past two years. Though affordable merchandise is clearly attracting new customers, D2C companies are also building powerful brands that stand for quality and innovation.
Which categories are being disrupted by D2C brands? D2C brands have found success with lifestyle categories like apparel, beauty and home furnishings. They are also having an impact on the massive consumer packaged goods category as food and beverage and personal care challenger brands emerge.
Which marketing strategies are used by D2C brands? D2C brands have historically relied on performance-based digital advertising strategies. Many leverage Facebook and Instagram to target audiences and direct response podcast ads to drive conversions. Even unconventional business-to-consumer (B2C) tactics like content marketing are being used to go “over the top” of traditional media channels to reach and acquire customers.
Why are D2C brands moving from digital to physical retail? With many D2C brands having already established their online customer bases, they are now looking to expand into brick-and-mortar. Many are introducing pop-up stores, partnering with larger retailers and opening their own flagship stores. D2C brands with an already established brick-and-mortar presence are now looking to expand their store footprints while delivering a seamless omnichannel experience.