Growth Spurt: How D2C Brands Mature

Direct-to-consumer brands are growing up.  For some, like oral care brand Quip, growth means developing an end-to-end solution including services like Quipcare, a dental insurance alternative that complements its electric toothbrushes.  

Quip’s desire to further monetize its existing consumer base, as well as appeal to untapped and under-engaged consumers, motivates the brand’s creation of services adjacent to its core products.  Quip is activating a playbook similar to that of eyeglass brand Warby Parker, which introduced eye exams and vision insurance in 2018.  

In the same vein, luggage brand Away, fresh off a $100 million round of funding, plans to offer apparel and skin care, extending its roots beyond luggage.  

As D2C brands venture into new verticals, they spread their costs of acquisition across multiple products and services while becoming more than stylish point solutions.      



As they grow, D2C brands don’t necessarily compete with incumbent brands for target audience attention but rather with other D2Cs influencing the archetypal, digitally savvy D2C consumer.  

As I have mentioned before, consumers of D2C brands are typically wealthy, urban millennials prone to sharing online about products they use.  When marketed to on the right channel at the right time, these consumers form a community that chooses D2C products to satisfy many unrelated needs — like Mack Weldon for underwear, Mirror for a home gym, Burrow for a couch, or Dirty Lemon for a drink.  

This community is horizontal, not vertical.  This community expresses loyalty to the D2C purchase experience, the D2C aesthetic and its pop cultural relevance rather than, for example, the functional value of a Leesa mattress versus a Sleepy’s.  D2C consumers tend to privilege form over function (though the strongest brands master both), making “direct-to-consumer” more than a business model or marketing strategy. It’s become a distinctive look and feel, curated by agencies like Bullish and Derris, that applies to a variety of verticals, practically regardless of the product being sold.     

Though their look and feel may not change as they mature, D2C brands’ relationship with the media they use does.  D2Cs retain an intense focus on customer acquisition cost as they scale beyond search and social to embrace cost-efficient reach on awareness media like out-of-home, direct mail and TV.  

Testing offline media comes, in part, from D2Cs realizing fewer cost efficiencies on Facebook and Google.  There’s an economic limit to the volume of undervalued media available on Instagram, now filled with brands competing for audiences that are desensitized to lookalike digital ads.   

Compelled by performance-oriented arguments for growing offline, D2Cs are embracing the rich storytelling opportunities of offline media.  They’re embracing the canvas of TV, in particular, to appeal to consumer escapism and our need for proof.  A good example is Gravity Blanket’s recent "Happy Place" commercial, featuring palm-frond-adorned bedrooms and a statistic about the company’s blankets’ ability to improve sleep.  

Moreover, offline growth has caused D2C brands to rightly hold offline media providers accountable for the rigor of measurement and optimization that’s standard to digital marketing.  Now, awareness media like TV is measurable at a cost-per-acquisition level while the way that TV’s bought and sold, once transacted via phone and email, is being automated to increase D2Cs’ speed to market.

For clues about what’s next, look at watershed events like Casper’s IPO, Gin Lane’s transformation into a D2C holding company, and the mixture of retail and editorial excellence at brands like Glossier and Dote.

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