Table of Contents
Executive Summary
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- Market overview
- Top takeaways
- Consumers are highly interested in the DTC category
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- Figure 1: Frequency of DTC purchases, November 2019
- DTC knows how to create value for consumers
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- Figure 2: Reasons consumers would purchase from a DTC company, November 2019
- Some consumers still see DTC as a novelty purchase
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- Figure 3: Barriers to purchase, November 2019
- What it means
The DTC Market
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- DTC models need traditional methods to expand reach
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- Figure 4: DTC companies consumers are aware of, November 2019
Market Factors
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- CCPA could make online personalization more complex
- What is CCPA?
- What does it mean for ecommerce retailers?
- Ohi gives small brands an edge
Key Players – What You Need to Know
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- Big brands snatch up DTC companies to stay competitive
- There is no room for bad behavior
- Small DTC players need one another to make their mark
The Rise of Direct-to-Consumer: Where Are They Now
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- The race to unicorn status: $1 billion valuation
- Warby Parker: valued at $1.75 billion
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- Figure 5: Warby Parker
- Casper: valuated at $1.1 billion (lost this valuation January 2020)
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- Figure 6: Casper
- Allbirds: valuated at $1.4 billion
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- Figure 7: Allbirds
- There’s always a bigger fish in the pond
- 2016: Dollar Shave Club and Unilever
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- Figure 8: Dollar Shave Club
- 2017: Bonobos and Walmart
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- Figure 9: Bonobos
- Coming soon, 2020: Billie and P&G
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- Figure 10: Billie
- What it means
What’s Happening
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- The return of mom and pop shops
- Allbirds versus Amazon: DTC faces the Goliaths
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- Figure 11: Allbirds CEO open letter
What’s Struggling
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- Building trust on social media is shaky at best
- There’s no place to hide for DTC brands
What to Watch
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- DTC faces hurdles ahead
- For Now could help DTC forever
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- Figure 12: For Now pop-up location
- Product expansion builds consumer relationships
The Consumer – What You Need to Know
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- There is plenty of room for growth
- Brands need traditional marketing to increase consumer reach
- DTC needs to show why they are needed
- Brick and mortar boosts consumer confidence
- Consumers do not distinguish one DTC brand from another
DTC Awareness and Interest
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- Consumer interest in DTC continues to grow
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- Figure 13: Frequency of DTC purchases, November 2019
- DTC can still win with plenty of consumers
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- Figure 14: Openness to DTC purchases, November 2019
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- Figure 15: Openness to DTC purchases, by age, November 2019
- Low-risk products ease consumers into the purchase cycle
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- Figure 16: Products consumers are comfortable purchasing through DTC companies, November 2019
- Categories with personalization opportunities win over consumers
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- Figure 17: Products consumers are comfortable purchasing through DTC companies, November 2019
Attitudes toward DTC
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- Consumers crave a tactile experience
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- Figure 18: Attitudes toward DTC, November 2019
- Build rapport by reaching more people
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- Figure 19: Attitudes toward DTC, by openness to purchase, November 2019
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- Figure 20: Attitudes toward DTC, by openness to purchase, November 2019
- Let personalization shine through
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- Figure 21: Attitudes toward DTC, by openness to purchase, November 2019
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- Figure 22: Care/Of individual packets
Channels of Learning and Motivation
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- Traditional does not mean ineffective
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- Figure 23: How consumers first learn about DTC companies, November 2019
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- Figure 24: Warby Parker Commercial
- Figure 25: Casper Commercial
- Big names in DTC showcase traditional media’s power
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- Figure 26: Where consumers first learned of a specific DTC brand, November 2019
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- Figure 27: Allbirds Creative
- Media + Word of Mouth = brand awareness and trust
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- Figure 28: Where consumers learn about DTC companies, by openness to purchase, November 2019
- DTC capitalizes on consumers’ need for value
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- Figure 29: Reasons consumers would purchase from a DTC company, November 2019
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- Figure 30: Motivation to purchase, by age, November 2019
- Figure 31: Everlane note to community
- DTC brand enthusiasts see the company as a reflection of themselves
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- Figure 32: Reasons consumers would purchase from a DTC company, by openness, November 2019
- Reviews provide encouragement to purchase
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- Figure 33: TURF Analysis – motivation to purchase, November 2019
Barriers
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- Consumers need to see to believe in DTC products
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- Figure 34: Barriers to purchase, November 2019
- Remember, remember direct-to-consumer
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- Figure 35: Barriers to purchase, by age, November 2019
- Experience does not always succeed
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- Figure 36: Barriers to purchase, by openness, November 2019
Brick and Mortar Experience
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- Opportunity to move beyond four walls
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- Figure 37: DTC brick and mortar stores visited, November 2019
- Stores give consumers a place to play
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- Figure 38: Driving factors for in-store DTC visits, November 2019
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- Figure 39: Neighborhood Goods
- Figure 40: Neighborhood Goods yoga class
- Brick and mortar increases consumer confidence
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- Figure 41: Driving factors for in-store DTC visits, by age, November 2019
- Physical retail is a testing ground for curious consumers
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- Figure 42: Driving factors for in-store DTC visits, by openness to purchase, November 2019
Overall DTC Experience
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- Value wins over price alone
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- Figure 43: What consumers like about the DTC experience, November 2019
- Brand exposure instill trustworthiness
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- Figure 44: Repertoire – number of DTC products comfortable purchasing, November 2019
- Consumers do not want to be left in the dark
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- Figure 45: What consumers dislike about DTC, November 2019
- Younger consumers don their research caps
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- Figure 46: What consumers dislike about DTC, by age, November 2019
Word Association
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- DTC categories get clumped together under one umbrella
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- Figure 47: Word association for each DTC category, November 2019
Appendix – Data Sources and Abbreviations
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- Data sources
- Fan chart forecast
- Consumer survey data
- Behavioral data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Consumer
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- Figure 48: Consumers 18-24 years old retail shopping segmentation index
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- Figure 49: Consumers 25-34 years old retail shopping segmentation index
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