US Direct-to-Consumer Retailing Market Report 2024
£ 3,695 (Excl.Tax)
Report Summary
Inflation is causing consumers to shop DTC brands less often. Brands are trying to minimize this behavior by eliminating barriers like shipping fees or offering discount incentives. Looking to a competitive, future retail landscape, DTC brands will need to discover new ways to connect with consumers, which will require an omnichannel presence.
DTC Retail Market – Current Outlook
Direct-to-consumer retailing continues to evolve as the lines between DTC and traditional retail become increasingly blurry. While DTC brands have become known for offering a more unique product, retailers can no longer survive on this alone. Leveraging marketing efforts that create community, incorporate experiences and demonstrate shared values can help DTC brands advance personal connection.
For DTC brands to thrive in the increasingly competitive retail landscape, having a physical store presence is becoming a baseline expectation. While it’s necessary to connect with consumers through an omnichannel presence, DTC brands will have to be careful not to lose their core brand equities of personalization and price.
US DTC Retail – Market Statistics
- DTC Retail consumer behavior: 49% of adults agree that rising prices are causing them to shop DTC brands less often.
- Consumer preferences of DTC brands: 62% would be more likely to shop a DTC brand if it has a physical store location.
- Consumer purchase motivations: 29% say a DTC brand’s lower price compared to traditional retailer is a top reason for purchase.
US DTC Retailing Market Report – What’s Inside?
Key Topics Analyzed in the Report
- Incidence of recent purchases from DTC brands, and interest in future purchase
- Discovering where DTC purchases are made and what product categories users are open to buying DTC
- Awareness of DTC brands and where users discovered them
- Top reasons driving DTC purchases, as well as barriers for not buying
- Attitudes toward DTC brand retail preferences, attributes, and comparisons to traditional brands
- Consumer behaviors when shopping DTC brands
Report Scope
For the purposes of this Report, Mintel has used the following definitions:
Direct-to-consumer (DTC) is a retail strategy where brands sell their products directly to their customers without necessarily leveraging the help of third-party wholesalers or retailers. This is often, but not exclusively, completed online.
Readers of this report may also be interested in our US Adult Clothing Market Report, or our range of Retail Market Research.
Meet the Expert Behind the Analysis
DTC brands offer affordability and uniqueness to shoppers. As omnichannel behaviors become more the norm, DTC brands must evolve to meet consumers where they are.
Vince DiGirolamo
Director, North America Reports
Table of Contents
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Executive Summary
- What you need to know
- Consumer trends: key takeaways
- Market predictions
- Opportunities
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Market Dynamics
- Market context
- Market drivers
- Annual inflation sits at 2.9% as of July, the lowest it has been since March 2021
- Graph 1: headline CPI and shelter CPI, 2021-24
- Inflation continues to impact shopping behavior
- Shipping prices present be a barrier to purchase
- Graph 2: top barriers for not wanting to purchase from a direct-to-consumer (DTC) brand, 2024
- Consumer sentiment remains down, but is expected to rebound soon
- Graph 3: consumer sentiment index, 2022-24
- eCommerce growth outpaces total retail growth
- Graph 4: total retail sales growth versus ecommerce sales growth 2019-28
- Consumers with healthy financial situations engage with DTC brands
- Graph 5: “Have you made any purchases from direct-to-consumer (DTC) brands in the past 12 months? And would you be interested in doing it again?”, 2024
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Consumer Insights
- Consumer fast facts
- Consumer fast facts (cont.)
- DTC purchases
- Growth opportunities for DTC brands to reach new users
- Graph 6: DTC purchase behavior/interest, 2024
- Men are more likely to make DTC purchases; women offer opportunity
- Graph 7: DTC purchase behavior/interest, by gender, 2024
- Younger generations more engaged with DTC brands
- Graph 8: DTC purchase behavior/interest, by generation, 2024
- Majority of parents are buying DTC brands – thanks to social media
- Graph 9: DTC purchase behavior/interest, by parental status, 2024
- DTC shopping methods
- DTC brands shopped mostly in-store
- Graph 10: DTC shopping method, 2024
- The in-store experience appeals to Gen Z and Millennials
- Graph 11: DTC shopping method, by generation, 2024
- Physical stores and retail partnerships appeal to consumers overall – especially younger generations
- Graph 12: impact of DTC physical presence and retail partnerships, by generation, 2024
- DTC categories purchased
- Clothing and personal care are top categories of interest
- Graph 13: DTC categories purchased, 2024
- Food and drink DTC brands could offer potential among key cohorts
- Graph 14: DTC categories purchased, by generation, 2024
- Graph 15: DTC categories purchased, by parental status, 2024
- DTC food and drink focusing on convenience and health
- DTC brand awareness
- Brand building efforts and a multimedia presence can help drive awareness
- Graph 16: select DTC brand awareness, by gender, 2024
- The Farmer’s Dog and Warby Parker known among Boomers
- Graph 17: select DTC brand awareness, by generation, 2024
- The Farmer’s Dog and Warby Parker known among Boomers
- hims & hers brand awareness elevated among Millennials
- Graph 18: select DTC brand awareness, by generation, 2024
- DTC discovery
- DTC brands continue to be discovered on social media and TV/streaming
- Social media can be more impactful than traditional retailers; yet both are key to driving greater awareness
- Graph 19: DTC select sources of discovery, by gender, 2024
- A social strategy is essential in reaching young adults and traditional content can fuel connection
- Graph 20: DTC sources of discovery – social media; traditional retailer, by generation, 2024
- Digital media is a huge channel for parents, but traditional formats can garner their attention while they are on the go
- Graph 21: select DTC sources of discovery, by parental status, 2024
- Discovery on social media
- Facebook, YouTube and Instagram are most effective social platforms in creating awareness for DTC brands
- Graph 22: social media platforms driving awareness, 2024
- YouTube is particularly impactful with men
- The influence of social media platforms shifts by generation
- Graph 23: social media platforms driving awareness, by generation, 2024
- Purchase drivers
- Price and availability are key purchase drivers for DTC brands
- Graph 24: drivers for purchasing more from DTC brands, 2024
- DTC brand users are influenced by recommendations and reviews
- Graph 25: drivers for purchasing more from DTC brands, by users/non-users, 2024
- Purchase drivers differ among generations
- Graph 26: drivers for purchasing more from DTC brands, by generation, 2024
- Misfits Market engages younger consumers with quality perceptions and authentic positioning
- Parents are driven by aesthetics and products that match their style
- Graph 27: drivers for purchasing more from DTC brands, by parental status, 2024
- Barriers to purchase
- Biggest barriers for DTC brands are accessibility, tangibility, and shipping
- Graph 28: barriers to purchase, 2024
- Gen Z values one stop shopping and ease of purchase
- Graph 29: select barriers to purchase, by generation, 2024
- Boomers prefer in-store shopping – avoiding high shipping costs
- Graph 30: select barriers to purchase, by generation, 2024
- Attitudes toward DTC Brands
- The hallmark of DTC brands is uniqueness
- Graph 31: attitudes toward DTC brands – any agree, 2024
- Personalization is a key attribute of DTC brands
- Graph 32: attitudes toward DTC brands – any agree, 2024
- Gen Z and Millennials have positive perceptions toward DTC brands over traditional brands
- Graph 33: attitudes toward DTC brands – any agree, by generation, 2024
- Younger generations plan to shop DTC brands more often in the future, though rising prices could deter behavior
- Graph 34: attitudes toward DTC brands – any agree, by generation, 2024
- DTC brands have stronger support among parents
- Graph 35: attitudes towards DTC brands – any agree, by parental status, 2024
- Parents seek out DTC brands that fit their needs
- Graph 36: attitudes toward DTC brands – any agree, by parental status, 2024
- Behaviors toward DTC brands
- Customer reviews weigh heavily when shopping DTC brands
- Graph 37: behaviors when shopping DTC brands, 2024
- The power of consumer feedback prompts change
- Women seek reviews and trials before purchasing DTC
- Graph 38: select behaviors when shopping DTC brands, by gender, 2024
- Gen Z gravitates toward DTC brands’ physical stores and temporary locations; Boomers rely on customer reviews
- Graph 39: behaviors when shopping DTC brands, by generation, 2024
- Parents engage with DTC on social media and share reviews
- Graph 40: select behaviors when shopping DTC brands, by parental status, 2024
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Innovation and Marketing Trends
- Competitive strategies
- Develop strategy for in-store placement
- Wayfair extends brand to meet the needs of in-store shoppers
- Halara tests physical retail with pop-up shop
- Create connection with consumers
- Allbirds leverages the power of social media and community to create a buzz around their brand
- Vuori taps immersive experiences to engage its target audience
- Athletic Brewing’s storytelling attracts users with shared values
- Athletic Brewing uses community to drive innovation
- Using social commerce to reach consumers where they are already shopping
- Sponsored ads on social media help DTC brands increase awareness and drive revenue
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Appendix
- Market definition
- Consumer research methodology
- Consumer research questions
- Generations
- Abbreviations and terms
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