The Direct To Consumer Business Trend (And How To Get In)

I recently attended Facebook’s semi-annual, Build To Break event, a workshop conference of some sorts, where disruptive companies gather that have uprooted entire industries (ex. Casper in the mattress market or Calm in the meditation space) or created categories of their own (ex. Lyft with the ride share market).

What was most fascinating about the event was NOT the speakers or breakout sessions, but the majority of direct to consumer (D2C) companies that made up the guest list.

MVMT, Smile Direct Club, Zillow, and dozens of others had used Facebook to gain new and repeat customers, at scale AND a low cost per acquisition.

Albeit part of the demise of brick & mortar retail, direct to consumer has taken the slow moving, old-boys club culture of retail and injected it with startup steroids to make them fast, customer pleasing, quick growing machines.

When did this all happen?

Where did it start?

And is there any room to begin your own D2C startup?

There might be more hope than you think.

What began with meal kits (think Blue Apron, Hello Fresh, and Home Chef) and gift packages (Loot Crate, Birchbox), quickly expanded into dozens of industries that have been laden with high prices,  retail middle men, and hyper competitiveness for shelf space.

People simply started asking a simple question.

“Why?”

Why is a quality watch $250+ or a mattress $1500+?

And then they did something about it.

Although D2C brands tend to fall into a handful of categories (apparel, eyewear, watches, personal care, mattresses), they all share 3 common characteristics:

  1. Heavy emphasis on brand marketing (often minimalist logos, beautiful web design, and brand consistency from ad all the way to packaging)
  2. Below market-rate prices while NEVER sacrificing quality
  3. Extremely fast shipping.

Have an idea yourself for a D2C product? Although some consider it a crowded market, I think we’ve only just begun to see a movement to a new medium for retail.

Here are the ingredients needed to see if your idea has what it takes:

  • Traditionally high priced (ex. Eyewear has traditionally cost $300+ for a frame, Warby did it for 200% less at a cool $100)
  • Emphasis on brand marketing and experience (think Apple with their store fronts, packaging, and product experience all being clean, modern, and suspenseful)
  • Experimental (testing new products, colorways, partnerships, even product names through digital marketing and sample group testing)
  • Data driven (learn from customer buying habits and then tailor products accordingly; ex. The Horse creating The Mini Original after listening to customers who voiced the desire for less big-faced watches and more minimal designs instead)

As always, please share this with a friend if you find this valuable. Comments or think differently about D2C companies? Share them below!

~JK

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