DTC Brands meaning Direct-to-Consumer Brands have seen an uptick in patronage recently, with e-commerce driving consumers' demand for them. Typically, a DTC brand creates a linear product-consumer relationship, eliminating the middlemen while delivering more quality at a competitive price. All of these sound excellent for the consumer, but it gets even better: DTC business models shine under the upsurge of online purchases. In the article below, we go through DTC features and take a look at some of the Direct-to-Consumer companies you can follow right away.
DTC Brands Meaning
DTC brands are organizations that try to sell directly to the consumer instead of going through the middlemen. However, what a Direct-to-Consumer business model does is modify the shopping experience so that the consumer becomes the central focus. It implements product choices based on buying habits, removing redundant options and avoid analysis paralysis.
Furthermore, the best DTC brands drive fair manufacturing competition in the industry and give startups a better leeway into the market. Direct-to-consumer brands became mainstream around the turn of the decade and began with products with low shipping costs. Even now, DTC brands have steady growth and are excellent options for startups and consumers alike.
Pros and Cons of DTC
The DTC distribution model has its highlights and pitfalls, which you should expect from any model in production. Below are some key pros and cons to Direct-to-Consumer branding to give an idea of how much impact it would have on your startup business:
Pros
1. Complete Image Control: With DTC, your company can always determine the communication and branding strategies that most suit your needs.
2. Better Fulfillment Capacity: DTC can improve your capacity to meet consumer demands within a set period. You can achieve better online awareness through e-commerce, and by extension, you can simultaneously fulfill customer demands.
3. Cost-Effective Traffic Gains: You get to drive more traffic to your product lineup, thanks to DTC. It works excellently with a branded website that you update with Search Engine Optimized content. You won't have to pay for the resulting traffic and leads.
4. Control over Customers' Data: It helps if the business knows more about its kind of consumers, and with DTC, your brand has control over how it gathers customers' data. For instance, you could request buyers' email addresses to populate your mailing list for a better reach in email marketing in the long term.
5. Chances of High ROI Strategies: Direct-to-Consumer model opens your business up to newer and more innovative strategies, which require marginal investments at the start. With the internet, robust social media tools such as hashtags, video advertisements, and digital marketing, you can get a much higher ROI than traditional business models.
Cons
1. Operation Costs Become Brand's Sole Responsibility: DTC does not leave room for businesses to segment production and marketing costs, and you'd have to cater for the brand's lifecycle, from the manufacturing stage to sales and every component in between.
2. Incompatibility with Retail Platforms: One of the most noticeable Direct-to-Consumer drawbacks is the lack of support for traditional retail outlets. However, running the DTC model as a complement to the existing retail platform could still yield some gains.
3. Customer Service Becomes the Company's Sole Responsibility: Since the DTC branding allows the business to fulfill customer demands directly, you get to the whole aspects of customer service – from customer support to user experience optimization.
Top 30 DTC Brands to Inspire You
With the insistent push for more commercial digitization worldwide, there is an uptick in the number of brick-and-mortar stores and startup businesses embracing the DTC model. While you might think that particular industries would have more advantages over the others, the benefits of DTC spread more randomly.
For instance, there are many successful DTC furniture brands as many as there are DTC apparel brands. Furthermore, most lists of DTC brands highlight the year-on-year revenue increase and a correlating uptick in online traffic. Below is a list of some of the fast-rising DTC startups you need to know, as well as some of the top DTC brands by today's standards.
1. Peloton: Had a 206% YoY growth as of 2020
2. Function of Beauty: Had over 1.7 million monthly visits in 2020
3. Thuma: A home and appliances brand which grew 210% in 2020
4. Tea Drops: Has $1.9 million in funding value as of 2020
5. Mented Cosmetics: Raised $3 million funds in 2018
6. By Humankind: Got $4 million from BoxGrup and several other investors
7. Rowing Blazers: An apparel brand with a total funding amount of $3.3 million
8. For Days: Recorded 348% yearly growth in 2019
9. Liquid I.V.: Got almost 400,000 average webpage visits
10. Great Jones: Had 401% Year-on-Year growth in 2020
11. Cuup: A fashion brand with a 409% 2020 YoY growth
12. Youth To The People: Has a $2 million funding valuation
13. Nonda: A Series-A DTC brand worth $10 million
14. Atoms: Secured $8.1 million in the Series A funding rounds
15. Misfits Market: Raised $85 million in the Series B rounds
16. Warby Parker: Has a net value of $1.75 billion
17. Casper and Harry's: Both DTC brands have a combined value of $1.5 billion
18. Glossier: Skincare/Beauty DTC brand worth $390 million
19. Bonobos: Acquired by Walmart for $310 million in 2017
20. Barkbox: Has a net worth of around $150-200 million
21. Dollar Shave Club: Sold to Unilever for $1 billion
22. Leze the Label: Saw a sales growth of 300% after e-commerce store launch
23. Sara Gabriel: A DTC fashion brand with $700,000 in revenue
24. Shoko Shop: A clothing store combining handmade fabric sourcing with e-commerce
25. The Candi Factory: A Toronto-based women's underwear DTC brand
26. Walker & Company: A DTC beauty brand worth $33.3 million
27. Dolls Kill: An online-only women's clothing store with $10.9 million in capital
28. Allbirds: Sold out an investor stake for $1.4 billion in 2018
29. The Honest Company: A baby product company currently worth $1 billion
30. Naturebox: Raised $10.5 million for a health snack business model
Wrapping up
The DTC business model offers tangible benefits, regardless of the industry from which you might be operating. Make the switch today, and open your business to the immense opportunities Direct-to-Consumer branding has to offer.
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