How 4 Direct to Consumer Brands are Taking Share from Traditional Retailers
By Tricia McKinnon
Direct to consumer brands are giving traditional retailers a run for their money. D2C startups, in particular, are one of the highest growth segments within eCommerce. These digitally native brands have become experts at creating and maintaining relationships with their customers and providing a more seamless shopping experience online. One of the key success factors for the best direct to consumer brands is creating a value proposition that makes them stand-out from the crowd. From the helpful beauty advice given in Glossier’s Into the Gloss Blog, to Everlane’s commitment to radical transparency to ThirdLove’s embrace of women of all sizes these brands know how to solve customer painpoints. Not being able to leverage bricks and mortar stores for initial traffic and growth, forced these brands to carve out their spot within crowded markets and its working. Here are four of the best direct to consumer brands.
1. Glossier emerged out of the popular blog Into the Gloss which was launched by Emily Weiss in 2010. The blog gained traction due to her popular interviews with beauty mavens such as Kim Kardashian. Overtime Weiss became known as a beauty expert and the blog also enabled her to gain a deep understanding of what types of beauty products customers want.
Weiss translated a dedicated millennial readership as well as an Instagram following into a set of loyal customers when she launched Glossier in 2014. Instead of launching many products at once, similar to Kylie Cosmetics which started out with a small product line, Weiss launched with only four items: Soothing Face Mist, Perfecting Skin Tint, Balm Dotcom and Priming Moisturizer. Fast forward and it is estimated that Glossier generated $100 million in revenue in 2018 and is now valued at $1.2 billion.
2. ThirdLove started out with the simple goal of providing women with a better fitting bra. Customers shopping at ThirdLove, can start the online shopping process by taking a fit finder quiz. The quiz provides a bra recommendation in as little as 60 seconds. Afterwards customers have the option to “try-before-you-buy”. If this option is selected, customers can choose a bra from one of three styles to try on at home. Once they receive the bra, ThirdLove says customers should: “Wear it. Wash it. Live in the bra for 30 days”. Bras that customers try on but don’t keep are cleaned then donated by ThirdLove to charities that focus on women in need. Returns and exchanges are free within a 30-day period. If a customer decides to keep the bra they are charged $68.00.
ThirdLove caters to the needs of women of all sizes by offering bras in 78 sizes including half sizes. ThirdLove has a valuation of more than $750 million and it has generated more than $100 million in annual revenues.
3. Everlane is a clothing brand that launched in 2010 that mostly sells high quality basics (cashmere sweaters, cotton t-shirts and jeans) but at lower prices than retailers such as J.Crew or Banana Republic who sell similar items. The company is committed to “radical transparency”. Customers shopping on everlane.com can see how much the materials, hardware, labour, transportation and duties for each item cost. Everlane also shows the difference in the markup for its products vs. a traditional retailer on its website.
Everlane is also environmentally conscious and plans to eliminate all virgin plastic from its supply chain by 2021. The first step towards achieving that goal is Everlane’s launch of a new line called ReNew, a collection of puffer jackets and fleece that is made from three million recycled plastic bottles. Everlane’s goal is to recycle 100 million plastic bottles within five years. It is estimated that Everlane passed the $100 million in revenue mark back in 2016.
4. California based shoe company Allbirds started out with a wool sneaker in 2016. Their shoes became a Silicon Valley staple. As a result of this Allbirds went on to sell one million pairs of shoes within two years. Its shoes are made of natural and environmentally friendly materials including eucalyptus tree fibre and merino wool. Its shoes are also comfortable with Time magazine calling them: "the world's most comfortable shoe." Last year Allbirds launched a flip flop called SweetFoam with soles that are made from sugar cane. Tim Brown, Allbird’s Co-Founder has said: “our thought is, if we can put a man on the moon, you should be able to make a T-shirt and a pair of sneakers that are carbon negative or carbon neutral”. Allbirds has raised over $75 million and is valued at $1.4 billion.