2022
9
UK Direct-to-Consumer Market Report 2022
2022-05-04T04:03:36+01:00
OX1100879
2195
150970
[{"name":"Retail","url":"https:\/\/store.mintel.com\/industries\/retail"}]
Report
en_GB
“Selling directly to consumers is not a new concept, but the rise of ecommerce over the past decade has provided for the foundations for it to be a more disruptive…

UK Direct-to-Consumer Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Direct To Consumer report identifies consumer attitudes towards the online retailing market, DTC retail sales trends, and DTC purchasing levels in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Direct To Consumer market in the UK.

Current Market Landscape

While direct-to-consumer (DTC) brands are often viewed as a niche element of the retail sector, there is a surprisingly high number of consumers who are aware of D2C brands. However, the reality is the rise of ecommerce across the past decade has broken down barriers for the D2C model and has blurred the lines between what it means to be a D2C or a ‘traditional’ brand.

  • 75% of consumers are aware of at least one direct-to-consumer brand.
  • 64% of this group have made a purchase from a D2C brand.
  • 63% of consumers believe brands should offer lower prices when purchasing their products from them rather than retailers.

While many consumers believe D2C brands should offer lower prices when buying directly than through retailers, there are only a handful of fully vertically integrated D2C brands that can achieve this price differential. Many brands within the D2C market are small and/or start-up in nature and, therefore, they are more exposed to supply chain disruption and inflation, with their smaller scale less able to mitigate the impacts of both factors on their prices to consumers.

Future Market Trends in Direct To Consumer

The biggest threat to a D2C brand is that it does not create the purchasing frequency and loyal early adopter customer base that allows the foundations for more mass-market led growth. Online growth has democratised access to consumers and meant that innovative products and ideas could quickly find a niche audience. However, current D2C buyers skew significantly younger and more affluent and, as such, are more promiscuous and can quickly move purchasing to a new brand. To guard against this, many of the recent success stories have built subscriptions into their models to create a more stable stream of income.

The pandemic is expected to give a significant legacy boost to online purchasing, and as such, this will bring greater opportunities for D2C brands operating in this space, particularly if, as we expect, transactional capability becomes baked into social platforms. While some D2C brands may create businesses on a pure D2C model, for most, the ability to sell directly to consumers is an opportunity to show retailers that their brand has proof of concept and make it easier for them to find partners in this space to find an even greater audience.

Read on to discover more details or take a look at all of our UK Consumer Lifestyles, Marketing and Promotion market research

Quickly understand

  • The size of the online retailing market and the position of D2C within this.
  • Profiles of leading D2C categories across a range of consumer-facing product categories.
  • Awareness levels of these leading D2C brands.
  • Purchasing levels from D2C brands across a range of consumer-facing product categories.
  • Where consumers find information on D2C brands.
  • What would encourage more/consumers to start purchasing from D2C brands.
  • Attitudes towards shopping with D2C brands.

Covered in this report

Brands: Made, Allbirds, HelloFresh, Glossier, Gymshark, Grind, Smol, Ace & Tate, LoveHoney, Gousto, Beauty Pie, Smile Direct Club, Who Gives a Crap, Castore, Nourished, Everlane, Patch Plants, Sézane, Desmond and Dempsey, Blueland, Colgate.

Expert analysis from a specialist in the field

This report, written by Nick Carroll, a leading analyst in the Retail sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Selling directly to consumers is not a new concept, but the rise of ecommerce over the past decade has provided for the foundations for it to be a more disruptive concept across all sectors, from automotive to media distribution. For retailers the modern D2C model has proved the platform for large brands to reduce dependency on retailers, and provided a significant channel to market for new start-ups. It is not a golden ticket to success and for most active in the market retail listing is still the ultimate goal, but it is a growing aspect of the ecommerce sector and one with much room to grow.

Nick Carroll - Research AnalystNick Carroll
Category Director – Retail Insights

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Market context
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for direct-to-consumer selling
      • Figure 1: Category outlook, 2022-27
    • The market
    • Online channels add further growth in 2021, following a record 2020
      • Figure 2: All online retail sales (including VAT), market size and growth, 2016-21
    • Stores reclaimed a majority of non-food sales as online-only players reclaim a majority of online sales
      • Figure 3: Estimated share of total non-food sales, store versus online and other non-store, 2020-22
    • Consumers’ financial wellbeing has slipped from its recent high point
      • Figure 4: Household financial wellbeing index, 2019-22
    • Inflation is the key concern for 2022 for consumers, brands and the economy
      • Figure 5: CPI, overall index and core categories, 2021-22
    • Companies and brands
    • Most new entrants to the retail space are online-first, but this is no guarantee of success
      • Figure 6: Percentage change in the number of VAT and/or PAYE retail enterprises within the UK, by major retail category, 2014-21
    • Subscription-led services allow D2C to flourish in the FMCG sector…
      • Figure 7: Grind product and subscription example, 2022
    • …particularly when the solutions are convenient
      • Figure 8: smol | laundry detergent delivered through the letterbox, 2022
    • Making customers invested in the brand
      • Figure 9: Body Hero campaign of Glossier, 2022
    • Fashion D2C moves into the mainstream
      • Figure 10: Ace & Tate, Seven Dials, London, 2022
    • Expertise and proof of concept can make D2C brands the go-to for retailers
      • Figure 11: Lovehoney, international women’s day post, 2022
    • The consumer
    • D2C brands are just brands to most consumers
      • Figure 12: Attitudes towards understanding of a direct-to-consumer brand, 2021
    • 75% of consumers are aware of a D2C brand
      • Figure 13: Awareness of direct-to-consumer brands, 2021
    • Younger D2C brands target affluent youth, but maturity comes when a broader base is engaged
      • Figure 14: Demographic profile of those aware of select D2C brands, by age and household income, 2021
    • Fashion, food and BPC key D2C categories
      • Figure 15: Product categories purchased from and interest in future purchasing, 2021
    • D2C purchasing coming from a very specific element of the market
      • Figure 16: Demographic profile of D2C purchasers, by category, 2021
    • Price and promotion key to growing awareness
      • Figure 17: Factors which would encourage direct-to-consumer purchasing, 2021
    • TV and online drivers of awareness for D2C brands
      • Figure 18: Where consumers heard about D2C brands, 2021
    • Brand identity much more important for the core younger audience
      • Figure 19: Attitudes towards awareness and brand connection with D2C brands, 2021
    • Convenience a barrier for D2C brands
      • Figure 20: Attitudes towards pricing, convenience and service of D2C brands, 2021
    • D2C can trade on lower environmental impact
      • Figure 21: Attitudes towards ethical and sustainability benefits of shopping with D2C brands, 2021
  3. Issues and Insights

    • D2C: understanding the model
    • D2C: is it right for my brand?
    • D2C: foe or friend of the high street?
  4. Market Drivers

    • Consumers’ financial wellbeing has slipped from its recent high point…
      • Figure 22: Household financial wellbeing index, 2019-22
    • Inflation is the key concern for 2022 for consumers, brands and the economy
      • Figure 23: CPI, overall index and core categories, 2021-22
      • Figure 24: Consumer concerns about household finances, 2021-22
    • The conflict in Ukraine will hurt the UK economy
    • The post-COVID-19 bounceback will be followed by a period of slower growth
    • Online market moves into decline as retail rebalances
      • Figure 25: Online retail sales, annual growth by major category, 2020-22
    • Additional online use dips as concern levels hit new low
      • Figure 26: COVID-19 Tracker: concern levels regarding COVID-19 and shopping behaviour change as a result of the pandemic, 2020-22
    • Greater interest in social commerce will drive growth in the D2C market
      • Figure 27: Factors which would encourage more social media shopping, 2021
    • Most new entrants to the retail space are online-first, but this is no guarantee of success
      • Figure 28: Percentage change in the number of VAT and/or PAYE retail enterprises within the UK, by major retail category, 2014-21
      • Figure 29: Survival rate of newly born enterprises in 2014, by category, 2014-19
  5. Online Market Size and D2C

    • Online channels add further growth in 2021, following a record 2020
      • Figure 30: All online retail sales (including VAT), market size and growth, 2016-21
    • Stores reclaimed a majority of non-food sales as online-only players reclaim a majority of online sales
      • Figure 31: Estimated share of total non-food sales, store versus online and other non-store, 2020-22
      • Figure 32: Share of online retail sales, by type of retailer, 2018-22
    • Marketplaces an attractive proposition for D2C brands
      • Figure 33: Online-only retail sales, estimated breakdown by retailer/channel, 2019/2021
  6. Food & Drink: leading D2C players

    • HelloFresh: from start-up to scale-up
      • Figure 34: Hello Fresh Meal Kit delivery service
      • Figure 35: Brand summary: HelloFresh brand, 2022
    • Gousto: a data business that loves food
      • Figure 36: Gousto Flavour Saviour, 2022
      • Figure 37: Brand summary: Gousto brand, 2022
    • Grind goes global
      • Figure 38: Brand summary: Grind brand, 2022
    • Nourished: 3D-printed personalised vitamins
      • Figure 39: Nutristacks: Nourished in Partnership with Colgate, 2022
      • Figure 40: Brand summary: Nourished brand, 2022
  7. BPC & Household: Leading D2C players

    • Glossier makes the customer a part of its brand
      • Figure 41: Body Hero campaign of Glossier, 2021
      • Figure 42: Brand summary: Glossier brand, 2022
    • Beauty pie disrupts the traditional beauty industry
      • Figure 43: James Molloy ‘Deluxe Eyes’ Masterclass, 2022
      • Figure 44: Brand summary: Beauty Pie brand, 2022
    • SmileDirectClub takes on orthodontics industry
      • Figure 45: Brand summary: Smile Direct Club brand, 2022
    • smol: eco homecare brand
      • Figure 46: smol | laundry detergent delivered through the letterbox
      • Figure 47: Brand summary: smol brand, 2022
    • Who Gives a Crap strong on social responsibility
      • Figure 48: The limited-edition sustainable coffee and toilet paper bundle
      • Figure 49: Brand summary: Who Gives a Crap brand, 2022
    • Blueland to eliminate single-use plastic
      • Figure 50: Blueland’s new plant-based sponges
      • Figure 51: Brand Summary: Blueland brand, 2022
  8. Fashion: Leading D2C players

    • Gymshark disrupting the fashion industry
      • Figure 52: “United we Sweat” campaign
      • Figure 53: Brand summary: Gymshark brand, 2022
    • Allbirds positioned as comfortable and sustainable footwear
      • Figure 54: Allbirds X Jeff Staple partnership
      • Figure 55: Brand summary: Allbirds brand, 2022
    • Castore: British high-performance brand
      • Figure 56: Castore X McClaren
      • Figure 57: Brand summary: Castore brand, 2022
    • Everlane offers radical transparency
      • Figure 58: Everlane’s “Next Collective” Grant Program
      • Figure 59: Brand summary: Everlane brand, 2022
    • Sézane: cult French brand
      • Figure 60: “On Wednesday we wear pink” charitable initiative
      • Figure 61: Brand summary: Sézane brand, 2022
    • Desmond and Dempsey expands as sleepwear market grows
      • Figure 62: The Desmond & Dempsey x H&M collaboration
      • Figure 63: Brand summary: Desmond and Dempsey brand, 2022
    • Ace & Tate takes on accountability
      • Figure 64: Ace & Tate publishes list of bad decisions
      • Figure 65: Brand summary: Ace & Tate brand, 2022
  9. Miscellaneous Specialists: Leading D2C players

    • Peloton thrives in pandemic
      • Figure 66: Lanebreak: the Intersection of Fitness and Gaming
      • Figure 67: Brand summary: Peloton brand, 2022
    • Made.com capitalises on home being the renewed focus
      • Figure 68: Instagram shopping
      • Figure 69: Brand summary: Made.com brand, 2022
    • Patch Plants has taken urban gardening online
      • Figure 70: The world’s first hotel for plants by Patch Plants
      • Figure 71: Brand summary: Patch Plants brand, 2022
    • Lovehoney
      • Figure 72: Brand summary: Lovehoney brand, 2022
  10. Advertising and Marketing Activity

    • Significant differences in above-the-line spending capability
      • Figure 73: Total above-the line, online display and direct mail advertising expenditure by select D2C brands, 2021
      • Figure 74: Total above-the line, online display and direct mail advertising expenditure by select D2C brands, 2017-22
    • Digital favoured but TV important for maturing brands
      • Figure 75: Total above-the line, online display and direct mail advertising expenditure by select D2C brands, by advertising media type, 2021
    • Nielsen Ad Intel coverage
  11. D2C Brand Awareness

    • 75% of consumers are aware of a D2C brand
      • Figure 76: Attitudes towards understanding of a direct-to-consumer brand, 2021
    • HelloFresh has broken into the mainstream
      • Figure 77: Awareness of direct-to-consumer brands, 2021
    • Younger D2C brands target affluent youth, but maturity comes when a broader base is engaged
      • Figure 78: Demographic profile of those aware of select D2C brands, by age and household income, 2021
  12. Sources of Information on D2C Brands

    • TV and online drivers of awareness for D2C brands
      • Figure 79: Where consumers heard about D2C brands, 2021
    • TV gives the broadest demographic reach, but changing habits means a multi-channel strategy is required
      • Figure 80: Where consumers heard about D2C brands, by age, 2021
    • Creating the personal connection can bring long-term results
      • Figure 81: Attitudes towards awareness and brand connection with D2C brands, 2021
  13. Product Purchasing and Future Intentions

    • Fashion, food and BPC key D2C categories
      • Figure 82: Product categories purchased from and interest in future purchasing, 2021
    • D2C purchasing coming from a very specific element of the market
      • Figure 83: Demographic profile of D2C purchasers, by category, 2021
    • Higher barrier to purchasing among older consumers
      • Figure 84: No purchasers, future interest level by age, 2021
    • Breaking down the trust barrier
      • Figure 85: Attitude toward trust of new brands on social media, 2021
  14. What Would Encourage Use of D2C Brands

    • Price and promotion key to growing awareness…
      • Figure 86: Factors which would encourage direct-to-consumer purchasing, 2021
    • …particularly among those who show future interest
      • Figure 87: Factors which would encourage direct-to-consumer purchasing, by previous purchasing/future interest, 2021
    • Brand identity much more important for the core younger audience
      • Figure 88: Factors which would encourage direct-to-consumer purchasing, by age, 2021
  15. Attitudes to D2C Brands

    • Convenience a barrier for D2C brands…
      • Figure 89: Attitudes towards pricing, convenience and service of D2C brands, 2021
    • …meaning other factors must compensate
      • Figure 90: Attitudes towards service from D2C brands, by age, 2021
    • D2C can trade on lower environmental impact
      • Figure 91: Attitudes towards ethical and sustainability benefits of shopping with D2C brands, 2021
      • Figure 92: Attitudes towards the environmental benefits of shopping directly from brands, by age, 2021
  16. Appendix – Data Sources, Abbreviations and Supporting Information

    • Data sources
    • Financial definitions
    • Abbreviations
    • Consumer research methodology

About the report

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

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

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 databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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