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Direct to consumer

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Note from the editor

Direct to consumer is more than just a retail buzzword. In recent years, a slew of digitally native brands cropped up in just about every sector in retail and disrupted traditional models.

The direct-to-consumer revolution led to the creation of oral healthcare startups, multiple personal hygiene brands — a trend perhaps first started by Dollar Shave Club, but now inclusive of female-focused companies like Billie as well — and a lot of private label responses from bigger players like Amazon and Target. And it almost resulted in a major acquisition, until the prospective buyer for Harry's balked after the Federal Trade Commission blocked the brand's sale.

There's been some high profile challenges too, not least of which is the impact the COVID-19 crisis has had on consumer spending, shopping habits and economic realities. Flaws in the DTC model, already beginning to show, are likely to be exasperated as the retail world rethinks how it operates in light of the global health crisis. 

Casper, once a vaunted poster child for DTC potential and an early unicorn, was the focus of scrutiny during its much-hyped IPO as financial disclosures raised questions about its profitability. Customer acquisition costs continue to be high. And smaller startups must compete with the e-commerce efforts of established national players who may look to further diversify how they reach customers as comfort levels with purchasing online continues to grow.

All of which is to say: There's a lot happening in the direct-to-consumer space right now, and it's not going away anytime soon. This report covers several different aspects of the trend, including:

  • How the pandemic could change the DTC and e-commerce reality
  • Funding patterns 
  • How individual direct-to-consumer brands are shaping their businesses
  • What problems could be challenging former DTC darlings
  • The relationship between brick and mortar and direct to consumer

These aren't the only things we're watching, but they are some of the main themes we've picked up on as retailers adapt to a new era. 

Cara Salpini Editor

What the coronavirus means for DTC brands

Digital natives may not face the massive store closures brick-and-mortar retailers are grappling with, but they have their own obstacles.

Raising capital: What investors look for before writing a check

When it's still just a pitch deck, how can founders make investors believe in a brand as much as they do?

The pandemic revealed e-commerce challenges

As stores were forced to close, digital sales were expected to take over. They've soared, but serious constraints are also now on display.

E-commerce companies eye physical retail

Retailers are grappling with the limits of online sales.

30 minutes with Article's top marketing execs

This DTC brand wants to make shopping in the category easy. How? By limiting choice and taking back control of the last mile.

What stumbles at Harry's and Brandless mean for e-commerce

Federal regulators nixed one brand's takeover deal, and venture capital burned the other. Both moves reveal hard truths about direct-to-consumer retail.

Why Brooklinen didn't open its first permanent store in SoHo

CEO Rich Fulop says its Brooklyn location is one of "a lot of stores" the brand plans to open.

30 minutes with the CEO of Birchbox

Co-founder Katia Beauchamp breaks down the beauty brand's model, marketing changes and why she chose Walgreens as a partner.