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Description

Description

Covered in this report

The direct-to-consumer market is booming, and retailers of all sizes are looking to understand how to compete with these up-andcoming disruptive brands. DTC brands know how to create value for their clients and engage them with an authentic, inviting brand story. As the category looks for growth, they will need to move into what is considered more traditional methods of retail, leveraging small brick and mortar stores and mass media to boost consumer confidence in buying their products.

"The direct-to-consumer market disrupted many CPG categories and left big brands scrambling to change their tone. DTC companies did and continue to do a phenomenal job of giving their brands personalities and purpose. As they look to expand, though, these brands will find themselves leveraging more traditional marketing and retail tactics in order to reach a broader number of consumers."
- Katie Yackey, eCommerce Analyst

This report looks at the following areas:

  • Consumers are highly interested in the DTC category
  • DTC knows how to create value for consumers
  • Some consumers still see DTC as a novelty purchase

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Market overview
          • Top takeaways
            • Consumers are highly interested in the DTC category
              • Figure 1: Frequency of DTC purchases, November 2019
            • DTC knows how to create value for consumers
              • Figure 2: Reasons consumers would purchase from a DTC company, November 2019
            • Some consumers still see DTC as a novelty purchase
              • Figure 3: Barriers to purchase, November 2019
            • What it means
            • The DTC Market

              • DTC models need traditional methods to expand reach
                • Figure 4: DTC companies consumers are aware of, November 2019
            • Market Factors

              • 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

                      • 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

                            • The race to unicorn status: $1 billion valuation
                              • Warby Parker: valued at $1.75 billion
                                • Figure 5: Warby Parker
                              • Casper: valuated at $1.1 billion (lost this valuation January 2020)
                                • Figure 6: Casper
                              • Allbirds: valuated at $1.4 billion
                                • Figure 7: Allbirds
                              • There’s always a bigger fish in the pond
                                • 2016: Dollar Shave Club and Unilever
                                  • Figure 8: Dollar Shave Club
                                • 2017: Bonobos and Walmart
                                  • Figure 9: Bonobos
                                • Coming soon, 2020: Billie and P&G
                                  • Figure 10: Billie
                                • What it means
                                • What’s Happening

                                  • The return of mom and pop shops
                                    • Allbirds versus Amazon: DTC faces the Goliaths
                                      • Figure 11: Allbirds CEO open letter
                                  • What’s Struggling

                                    • Building trust on social media is shaky at best
                                      • There’s no place to hide for DTC brands
                                      • What to Watch

                                        • DTC faces hurdles ahead
                                          • For Now could help DTC forever
                                            • Figure 12: For Now pop-up location
                                          • Product expansion builds consumer relationships
                                          • The Consumer – What You Need to Know

                                            • 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

                                                      • Consumer interest in DTC continues to grow
                                                        • Figure 13: Frequency of DTC purchases, November 2019
                                                      • DTC can still win with plenty of consumers
                                                        • Figure 14: Openness to DTC purchases, November 2019
                                                        • Figure 15: Openness to DTC purchases, by age, November 2019
                                                      • Low-risk products ease consumers into the purchase cycle
                                                        • Figure 16: Products consumers are comfortable purchasing through DTC companies, November 2019
                                                      • Categories with personalization opportunities win over consumers
                                                        • Figure 17: Products consumers are comfortable purchasing through DTC companies, November 2019
                                                    • Attitudes toward DTC

                                                        • Consumers crave a tactile experience
                                                          • Figure 18: Attitudes toward DTC, November 2019
                                                        • Build rapport by reaching more people
                                                          • Figure 19: Attitudes toward DTC, by openness to purchase, November 2019
                                                          • Figure 20: Attitudes toward DTC, by openness to purchase, November 2019
                                                        • Let personalization shine through
                                                          • Figure 21: Attitudes toward DTC, by openness to purchase, November 2019
                                                          • Figure 22: Care/Of individual packets
                                                      • Channels of Learning and Motivation

                                                        • Traditional does not mean ineffective
                                                          • Figure 23: How consumers first learn about DTC companies, November 2019
                                                          • Figure 24: Warby Parker Commercial
                                                          • Figure 25: Casper Commercial
                                                        • Big names in DTC showcase traditional media’s power
                                                          • Figure 26: Where consumers first learned of a specific DTC brand, November 2019
                                                          • Figure 27: Allbirds Creative
                                                        • Media + Word of Mouth = brand awareness and trust
                                                          • Figure 28: Where consumers learn about DTC companies, by openness to purchase, November 2019
                                                        • DTC capitalizes on consumers’ need for value
                                                            • Figure 29: Reasons consumers would purchase from a DTC company, November 2019
                                                            • 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
                                                            • Figure 32: Reasons consumers would purchase from a DTC company, by openness, November 2019
                                                          • Reviews provide encouragement to purchase
                                                            • Figure 33: TURF Analysis – motivation to purchase, November 2019
                                                        • Barriers

                                                          • Consumers need to see to believe in DTC products
                                                            • Figure 34: Barriers to purchase, November 2019
                                                          • Remember, remember direct-to-consumer
                                                            • Figure 35: Barriers to purchase, by age, November 2019
                                                          • Experience does not always succeed
                                                            • Figure 36: Barriers to purchase, by openness, November 2019
                                                        • Brick and Mortar Experience

                                                          • Opportunity to move beyond four walls
                                                            • Figure 37: DTC brick and mortar stores visited, November 2019
                                                          • Stores give consumers a place to play
                                                            • Figure 38: Driving factors for in-store DTC visits, November 2019
                                                            • Figure 39: Neighborhood Goods
                                                            • Figure 40: Neighborhood Goods yoga class
                                                          • Brick and mortar increases consumer confidence
                                                            • Figure 41: Driving factors for in-store DTC visits, by age, November 2019
                                                          • Physical retail is a testing ground for curious consumers
                                                            • Figure 42: Driving factors for in-store DTC visits, by openness to purchase, November 2019
                                                        • Overall DTC Experience

                                                          • Value wins over price alone
                                                            • Figure 43: What consumers like about the DTC experience, November 2019
                                                          • Brand exposure instill trustworthiness
                                                            • Figure 44: Repertoire – number of DTC products comfortable purchasing, November 2019
                                                          • Consumers do not want to be left in the dark
                                                            • Figure 45: What consumers dislike about DTC, November 2019
                                                          • Younger consumers don their research caps
                                                            • Figure 46: What consumers dislike about DTC, by age, November 2019
                                                        • Word Association

                                                          • DTC categories get clumped together under one umbrella
                                                            • Figure 47: Word association for each DTC category, November 2019
                                                        • Appendix – Data Sources and Abbreviations

                                                          • Data sources
                                                            • Fan chart forecast
                                                              • Consumer survey data
                                                                • Behavioral data
                                                                  • Consumer qualitative research
                                                                    • Abbreviations and terms
                                                                      • Abbreviations
                                                                        • Terms
                                                                        • Appendix – The Consumer

                                                                            • Figure 48: Consumers 18-24 years old retail shopping segmentation index
                                                                            • Figure 49: Consumers 25-34 years old retail shopping segmentation index

                                                                        This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

                                                                        • Market

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                                                                        • Consumer

                                                                          Mintel's proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

                                                                        • Brand/Company

                                                                          Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

                                                                        • Data

                                                                          Market reports provide appendices of data to support the research and insight produced. Our tables of data are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

                                                                        Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

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