The Future of DTC Marketing PDF Free Download
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THE FUTURE OF DTC MARKETING
2022
ON THE FUTRE OF DTC AND GROWTH MARKETING
DTC brands are at a turning point. There is a growing realization that the DTC approach serves
more as a start-up playbook, rather than as a modus for scaling a retail brand. The hope that
startup DTCs could ride a digital-only approach to category leadership has faded. There is a point
where the CAC/LTV metrics of a Facebook focused plan just don’t hold up.
To that end, growth focused DTC brands are graduating to more complete, more holistic marketing
strategies. At the same time larger (“traditional”) brands are borrowing heavily from the DTC
playbook to support major transformation efforts, becoming more digital, more customer focused,
and more agile.
Moving forward, we expect there will be a retail marketing playbook which brings together the
best from DTC brands, with the tried-tested strategies from mature brands. The space in the
middle is where the most attention needs to go in answering the questions of; (1)how do DTC
brands make the leap to becoming category champions, and (2)how do mature (sometimes staid)
brands revitalize themselves and again become higher growth companies.
For answers to these questions, we draw on; (a)our experiences working with large and small
brands, at all stages of growth, (b)our data analyses of the World’s leading DTC brands, and (c)our
unique blend of expertise with brands both in China and on the Global stage.
High growth brands in China (a market which is 5yrs+ ahead on digital marketing) make for an
extremely insightful study on how to accelerate growth for brands internationally. So, in this
analysis we also look to China for inspiration on where the future of digital marketing is headed.
All of this is set against the growing realization that the US and World economies are headed into a
recession. These economic headwinds will pose significant challenges to retail brands. Many of the
weaker DTC will likely be forced out of the market by the weight of these economic headwinds,
rising costs and challenges with data and customer acquisition.
Chris Baker
Founder, HipArray
ABOUT THIS REPORT
Jun 2022
CONTENTS
1
OVERVIEW
2
TOP 200 BRANDS
3
GROWTH INSIGHTS
4
FUTURE-FORWARD
5
REGIONAL INSIGHTS
DTC MOVEMENT STALLING?
5
RECESSION LOOMING
19
TEN KEY CONSIDERATIONS
23
THE TOP 200 LIST
36
CATEGORY ANALYSIS
45
SOCIAL CHANNELS
46
GROWTH & SCALE
47
TOOLS & TECH
48
BRAND GROWTH FRAMEWORK
50
STRATEGIES & CASE STUDIES
55
GROWTH PARAMETERS
66
NORTH AMERICA
96
LATIN AMERICA
99
ASIA PACIFIC
102
EUROPE
105
OCEANIA
108
GLIMPSE INTO THE FUTURE
73
FIVE TRENDS FROM CHINA
74
MEDIA PORTFOLIO
83
APPS & OPS TO WATCH
86
OVERVIEW
1
DTC MOVEMENT STALLING?
5
RECESSION LOOMING
19
TEN KEY CONSIDERATIONS
23
DTC is (was) a really good launch playbook,
and over the past decade this playbook was
supported by strong tailwinds:
-Low (no) barriers to entry
-Minimal capital input requirements
-Favorable CAC/LTV economics
-Cost-efficient supply chains (eg. Dropshipping)
At its most basic level, it was possible to
startup a DTC over the course of a weekend:
-Find a unique product on AliExpress
-Design a Shopify Website
-Slap a minimalist logo onto a Website
-Wrap the story around a unique, well targeted
audience cohort
-Lock-in a formula for ads on Facebook & Google
-Lead with a purpose and demonstrate empathy
DTC brands now face significant headwinds,
with; rising advertising costs, deteriorating
supply chains, and a more crowded
competitive landscape.
IS THE DTC MOVEMENT STALLING?
Source: eMarketer Feb 2021
DTC MARKET SCALE & GROWTH
DTC ECOMMERCE SALES (2019 - 2023)
‘DIRECT' SALES HAVE BEEN
ACCELERATING, FOLLOWING THE RISE IN
OVERALL RETAIL ECOMMERCE. 2020-21
WERE RECORD YEARS FOR GROWTH IN
BOTH ECOMMERCE AND ‘DIRECT’ SALES
ONLINE. GIVEN THE SURGE IN 2020-21,
GROWTH RATES MAY, IN FACT, FLATLINE
IN 2022-23.
DTC brands represent only a small share of the overall
‘direct’ market. Dedicated DTC brands are increasing
their share - and growing slightly more quickly than
the overall market.
0
45
90
135
180
2019
2020
2021
2022 (e)
2023 (e)
All DTC Ecommerce Sales
DTC Brands
44.7
38.3
32.3
27
19.3
175
151.2
129.3
111.5
76.7
44.7
38.3
32.3
27
19.3
USD Billions
5%
10%
15%
20%
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Source: Statista 2021
ECOMMERCE AS SHARE OF TOTAL US RETAIL
Source: eMarketer Feb 2021
DTC MARKET SCALE & GROWTH
NIKE DTC REVENUE AS PERCENT OF TOTAL
LARGER, INCUMBENT BRANDS HAVE VERY
CLEAR GOALS AROUND GOING ‘DIRECT.’
THESE GOALS REPRESENT A SHIFT FROM
PRODUCT LEAD MARKETING TO
CUSTOMER-CENTRIC COMMUNICATIONS.
The rise of ecommerce and related CRM systems have
supported this shift toward DTC. Incumbent brands
have followed the shift to ecommerce, by moving
away from 3rd party distributors, to capture more
value, direct-from-consumer.
2015
2016
2017
2018
2019
2020
2021
DTC as % of Total Rev.
38.7%
34.8%
31.6%
28.7%
25%
22.9%
20.5%
ADIDAS
UNDER ARMOR
NIKE
PUMA
27%
35%
40%
41%
25%
32%
34%
33%
2019
2020
Source: Statista 2021
DTC REVENUE AS PERCENT OF TOTAL
DTC brands are no longer adhering to the
strict parameters of selling only online
through ‘owned’ websites but have:
-Added off-line retail shops
-Bringing distributors & wholesalers into the fold
-Augmenting ‘owned’ online sales with platform
sales channels like Amazon
-Are selling through traditional, volume retail
channels (WholeFoods, Walmart)
-Partnering with other brands (including
traditional brands)
So, by the strict definitions of DTC (from
5-10years ago), there are now, very few pure
play DTCs.
And, at the same time, larger, incumbent
brands have incorporated large parts of the
DTC playbook into their operations.
The lines have become blurred BUT the
fundamental insights that DTCs brought to
light remain, and are important.
REDEFINING DTC
REDEFINING DTC
SCALING DTC IS A CHALLENGE
The narrowly defined DTC playbook has proven itself to be
good up to US$10.0 million. After that point, most brands
reach limits and have to re-formulate their approach to
unlock the next growth tier.
Some of the ‘poster kids’ of the DTC movement were able to
ride the playbook to massive highs (IPO). But at some point
all DTCs need to evolve and mature. Look at the challenges
faced by DTC champions like Casper after its IPO.
At the best of times, there are inherent limits to scaling the
DTC playbook. Add in the recent economic headwinds, and
it’s clear that the potential of the DTC playbook needs to be
re-evaluated.
The ‘DTC movement’ is at an inflection point. It is not ‘dead’
but will require a new set of perspectives…to quote Ben Lerer
in his HBR article from 2020…
“DTC was an insight 10 years ago,” said Ben Lerer, managing partner at
venture firm Lerer Hippeau and early investor in Casper and Warby
Parker. “There’s still a lingering idea that DTC is innovative. That simply
isn’t the case anymore …It’s about how you do it now that’s innovative.”
Sources: Shopify, PipeCandy, McKinsey. 2021
110,000
- 120,000
US DTC BRANDS
874,500
US SHOPIFY MERCHANTS
95%
According to McKinsey,
95% of all eCommerce sites
in the US have annual
revenues below $1.0 million.
70%
According to PipeCandy,
70% of DTC brands in the
US have annual revenues
between $1.0 - $5.0 million.
Totem monitors the top 2,000
DTC brands. Our 2022, “Top
200” List comes from this
select group of players.
HEADWINDS FOR DTCS
NARROWING TAM
DTCs which are focused on super
narrow niches could face challenges
making important gains.
While the laser focus on a specific
audience group was a great launch
tactic, it can be a perilous balancing
act keeping the core audience
happy while expanding to new,
larger audience cohorts.
Is the segment (TAM) large
enough? Can the identity of the
brand and utility of products be
extended to a larger audience? And,
if the brand expands, can it keep its
core (niche) happy?
1
TOO BOTTOM-UP
The majority of digital native, DTC
brands are over-reliant on Facebook
and Google performance ads.
As the efficiency (for acquisition) of
these performance ads starts to fall
down (with rising CAC across major
channels), DTC brands are going to
struggle to make real break-
throughs.
Successful brand growth relies on
both bottom-up and top-down
strategies. The transformative gains
for most successful brands will
increasingly come from more top-
down (brand-focused) efforts.
2
NOT DISTINCT ENOUGH
Early DTC brands exploited a gap in
time where larger, incumbent
brands were not yet fully tooled up
to succeed online. During that
honeymoon period of time, DTC
brands were able to enjoy a large
part of the category online, to
themselves. Being accessible online
was enough.
Now that incumbent brands,
together with a hoard of other DTCs
have flooded digital channels, DTCS
must start competing more on
being memorable, distinct and
compelling.
Too many early DTCs have still not
yet done a good enough job of
building distinctiveness. The market
is awash with forgettable brands
with san serif fonts and me-too
products.
3
WEAK UNIT ECONOMICS
The VCs that funded many of the
early winners in the DTC space did
so with the expectation that DTC
brands could achieve SaaS level unit
economics.
As digital ad costs have risen
sharply over the past few years
(CPMs on Facebook are up over
5,000% since 2012), the unit
economics for DTCs have
deteriorated. Costs of acquisition
(CAC) have shot up.
LTV metrics are also looking
suspect. They are far from the
reliable MRR/ARR metrics of SaaS
technology firms
Brands who cannot find more
innovative, resourceful paths to
scaling customer acquisition will
start to fall by the wayside.
4
CLOUDY CONDITIONS
Economic headwinds, rising costs,
increased competition, together
with supply chain challenges, are all
creating uncertainty for DTC
brands.
DTC brands that want to survive in
the next interval will have to take
bold strategic moves and decisive
actions to improve brand
performance.
The reality is that most online
brands will fail out of the market in
the coming years. And, the major
reason most will fail is that they
were not able to build a clear plan
under a cloud of market uncertainty.
5
DTC brands are at a cross-roads. As they move through 2022 and into
2023, there is a rising set of external and internal challenges they must
face, if they wish to take the key steps to scaling beyond their start-up
phase.
-100%
0%
100%
200%
300%
400%
500%
600%
Jun '19
Sep '19
Dec '19
Mar '20
Jun '20
Sep '20
Dec '20
Mar '21
Jun '21
Sep '21
Dec '21
Mar '22
DOWNWARD PRESSURE ON VALUATIONS
LEADING DTC BRAND SHARE PRICES
There is a top-down destruction of valuations in the DTC
brand space. The champions of the DTC start-up space
(Peloton, Casper, Warby Parker…) have seen their share prices
get slashed in early 2022. Peloton is down more than 80%
from its highs in 2021.
DTC brands will have a very difficult time raising funds in this
environment (significant ‘down-rounds’ notwithstanding).
Growth focused DTC brands will have to stretch current
funds much further and adjust the growth playbook to;
(1)reduce acquisition costs (CAC), (2)improve customer
retention metrics (LTV), while (3)re-calibrating expectations
on maximizing TAM potential. In short, DTCs need to get lean
and focus on becoming cashflow positive much more quickly.
There is also a notable decline in pre-IPO funding of ‘start-ups.’ The
valuations of start-ups are going to get massively compressed in the
coming year+. Added to this, most of the start-up funding goes to tech
firms which have much better metrics for scaling than DTCs have. A
B2B SaaS firm with reliable MRR/ARR are going to be in much better
shape than high-burn DTC brands will be.
SHARE PRICE INCREASE/DECREASE VS S&P 500
Peloton
AllBirds
Warby Parker
Casper
S&P 500
GLOBAL VENTURE DOLLAR VOLUME THROUGH Q1 2022
$100B
$200B
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Angel-Seed
Early Stage
Late stage
Technology Growth
Source: Motley Fool 5Year Price Chart (+/- % based on Jun’17 base)
0%
Sources: Facebook Reports, Statista (2021 Advertiser is projected)
ADVERTISERS CROWDING INTO DIGITAL
FACEBOOK MAU VS ACTIVE ADVERTISERS
FACEBOOK HAS BEEN A CATALYST FOR DTC
BRAND GROWTH. LOW COST,
PERFORMANCE ADS ON FACEBOOK (AND
GOOGLE), HAVE BEEN THE CENTERPIECE OF
THE DTC MARKETING PLAYBOOK.
AD COST INFLATION NOW REPRESENTS A
MAJOR CHALLENGE FOR DTC BRANDS.
AS COSTS CONTINUE TO RISE ON
FACEBOOK, MANY DTC BRANDS WILL BE
PRICED OUT, OR FACE MARGIN PRESSURE.
While Facebook has been able to keep the cost of CPC’s
relatively consistent over the last many years, overall
efficiency has dropped significantly. Facebook has
become crowded and costly - making it hard for brands
(especially newer ones) to break through.
Between 2015-2021, the number of MAUs on Facebook
increased by 95.3%, while the number of active
advertisers has increased by 500x, so there are a lot
more brands competing for user attention. During the
same time period, CPMs have gone up more than 370%.
CPM’s are up 5,000+% since 2012.
2
4
6
8
10
12
2015
2016
2017
2018
2019
2020
2021
12
10
7
66
4
2
2.91
2.70
2.41
2.23
2.00
1.71
1.49
MAU (Billions)
Monthly Advertisers (Millions)
Sources: Sellics, Statista, HipArray, Totem 2021
DTC MARKET SCALE & GROWTH
COMPARATIVE CPC AND CPM RATES IN USD (2021)
TOGETHER, FACEBOOK, GOOGLE AND
AMAZON NOW HOLD A 65% SHARE OF
DIGITAL AD REVENUE. GIVEN THIS LEVEL OF
CONCENTRATION, IT IS REASONABLE TO
EXPECT THAT DIGITAL AD COSTS WILL
CONTINUE RISE.
DTC brands will have to diversify off-of Facebook and
Google and get much better at uncovering better value.
TikTok and Amazon represent immediate improvements
in cost, while newer, lesser known channels could be
better options in the long term.
FACEBOOK
TIKTOK
SNAP
YOUTUBE
GOOGLE (Display)
GOOGLE (Search)
AMAZON
WALMART
TWITTER
PINTEREST
30
6.46
9
1.4
11.6
3.4
7.4
17.6
1.50
0.45
1.00
0.75
2.32
3.21
0.20
1.35
CPC
CPM
20%
40%
60%
80%
100%
2019
2020
2021
2022
2023
26.4%
27.7%
28.6%
28.9%
31.6%
24.1%
24.2%
23.8%
24.9%
23.6%
14.6%
13.3%
11.6%
10.3%
7.8%
34.9%34.9%
36%
35.9%
37%
Others
Amazon
Facebook
Google
DIGITAL AD REVENUE SHARE BY COMPANY (2021)
Source: eMarketer Oct 2021
THE DTC PLAYBOOK MUST NOW BE
RE-EXAMINED AND EXISTING DTC
BRANDS MUST MOVE BEYOND THE
REALM OF PERFORMANCE DIGITAL.
The first crop of DTC brands were digital natives. What differentiated them from traditional retailers and
brands was that they engaged directly with customers via their own digital channels, be it for
communicating brand values, building a loyal community or for direct sales and service. These DTC brands
also leveraged customer behavior data to prioritize product decisions and to personalize communication.!
These DTC brands were fueled by abundant venture capital, and thrived in an environment of low
competition and advertising on (previously) underpriced social media platforms
What sets DTCs apart is the fact that brand
owners know exactly who their customers
are, what online behavior led them to their
initial contact with the brand, and what
they’re likely to buy next. These insights
create opportunities to build deep and
lasting relationships with customers.
Even as DTC brands start to incorporate
more channels and, on the surface appear
more like traditional brands, community and
customer empathy continue to be core
differentiators and provide native DTCs with
sustainable advantages.
This advantage can be seen with DTCs
providing customers a high degree of input
into key business decisions - including co-
creation of new products and conception of
marketing strategies.
While community will remain a strong
differentiator going forward, the challenge
for modern brands with mass ambitions is to
successfully scale that intimacy as they
move beyond DTC.
CUSTOMER CENTRICITY IS KEY
A NEW MANIFESTO FOR DTCS
CUSTOMER CENTRIC
Meeting customers where they
shop, listening to them carefully and
responding powerfully. It means not
outsourcing the customer
relationship to a distributor or
retailer but, at every touchpoint,
engaging, and responding to
customer needs.
It’s also about controlling your own
messaging and keeping the brand
identity clear, undiluted.
The past decade has seen a massive
shift in the retail experience for
customers. DTC brands have been a
catalyst for changing the rules of
engagement between brand and
customer. Retail used to be about
what was convenient for the brand.
It is now much more tailored to
what is easy and effortless for the
consumer.
1
PRO-ANALYTICS
Proactive analytics. Data and
analytics play a much larger role in
the work of DTCs. Data and
feedback represent the
understanding of a conversation
that a brand is having with its
customers (at scale and across all
channels).
Tightly linking data/analytics from
customers to the R&D process.
Unlike traditional brands who first
develop a product and then test it
with prospective customers (to
validate company decisions), the
DTC model is one which will engage
customers early and often in new
product, brand and communication
decisions.
2
SPECIFIC, NICHE
Consumers have an extremely wide
set of interests and demand for
unique, more customized products.
The DTC movement has exposed
mass brands for having been too
generic and one-size-fits-all.
Satisfying the interests for a wide
array of tribes (by geography,
culture, age, mindset) is a trend
which is still in the early innings.
People want to be represented in
the products and services they
purchase.
Start-up and mature brands will
both continue racing to match
these nuanced demands.
3
LESS SILOED
More closely connecting the
marketing, logistics, design/
manufacturing, customer service
and support functions of the
business.
One of the paramount insights from
the DTC movement has been that
all of these business functions must
be aligned under the banner of
customer care.
Traditional brands by comparison -
where all of the above functions
were siloed - appear to be
pathological (disjointed, multiple
personality syndrome).
Customers expect the brands they
deal with to operate sanely, like
people, with emotional intelligence.
4
EMPHATHIC
It is within this context that
customers respond to brands that
demonstrate values, ethics, mission
and ‘purpose.’
And, in many cases the specific
‘purpose’ being expressed may be
less important than the empathy
demonstrated by the brand.
Having a purpose and mission act
as a signal to customers that they
are engaged with a brand that is
more human.
5
As DTC evolves and is no longer strictly about selling online, direct, the
principles of DTC are imperative for all brands - large and small.
The following characteristics will continue to be essential advantages
to/for DTC brands moving forward:
LACK OF STRATEGIC FOCUS, TOGETHER
WITH FOGGY GROWTH PLANNING ARE
MAJOR IMPEDIMENTS FOR DTC BRANDS.
Most DTC brands are very unclear about who they want to be when they grow up. The bottom-up
approach that many have taken to reach a first major tier of growth, has left many groping to a find clear
path forward. Brand strategy must now provide a framework for growth. Brand and product positioning
must get more sharp, more distinct and compelling to reach ever wider audience sets.
Rising economic headwinds will put pressure on DTCs to figure things out much more quickly. The
timeline to get clear on strategy is now very, very tight.
HEIGHT
DISRUPTORS
DIFFERENTIATORS
CREATE NEW CATEGORIES OR RE-COMBINE/
RE-FRAME SEVERAL EXISTING CATEGORIES
HIGH ENTRY COSTS
(CONCENTRATED)
LOW ENTRY COSTS
(FRAGMENTED)
Un-locking value from “closed”
categories with high barriers to entry
(Warby Parker vs. Luxxotica)
Applying
new technology to
big consumer challenges.
(Smile Direct vs.
Orthodontics)
Creation of new category
(Lululemon: Yoga X Athleisure Fashion)
Functional
Differentiation through
advantages in product
features/functions.
Brand
Differentiation via image.
Distinct, engaged,
compelling identity.
Audience
Take advantage of
fragmentation in consumer
taste, values, locations to
carve out niches. Brands participate in
existing categories.
To move up the value
pyramid, brands at this
level must look to
improved category and
service design
Disruptors jump over
high barriers to entry
with revolutionary
changes. To sustain
value, “Disruptors” must
move quickly and erect
barriers to further
competition.
Unlocks large value …and
then must protect from
competition.
Must compete fiercely to
liberate value, and work
bottom-up to add/sustain
value.
VALUE UNLOCKED BY DTCS
EASY TO START, HARD TO SCALE
Starting a DTC brand and scaling a DTC brand are two
very different challenges. The past 10-15 years have
presented an amazingly efficient window to start-up a
new venture; low costs to advertise, new sales channels
(online), easy access to factories, and an abundance of
un-tapped, niche TAM’s.
For decades, there was a growing debt of unmet
customer needs, as mass brands controlled production
and sales channels. The best DTC brands have
unlocked the areas of most inefficiency (as disruptors
such as Warby Parker did with eyeglass oligopolists
Luxxotica). Innovators such as Smile Direct have taken
expensive (inaccessible) treatments such as
orthodontics directly to customers, making the process
of getting braces cheaper and more efficient.
For every disruptor at the level of Smile Direct Club,
there are a thousand small DTC brands who have
simply exploited low barriers to entry to take a small
share of a fragmented category.
DTC brands that want to survive and thrive will have to focus
on the strategic questions of category design, positioning and
how to move up the value chain. Understanding how to take a
small advantage with a niche audience and parlay it into
category leadership requires a different skillset. Startup hustle
needs to be augmented with brand bravery and strategic
vision. Niche distinctiveness must be recalibrated to scale.
HIGHER VALUE
Going into the pandemic, there was a great
deal of expectation for a recession. The
downturn didn’t happen and for a wide
range of consumer brands (selling physical
products), it was a massive boom.
For a large range of physical products,
demand was pulled forward during the
pandemic. Low interest rates, stimulus, and
the wealth effect (surge in equity) all
contributed to a significant boom in
spending during 2020 and 2021.
With a general re-opening, we are now
seeing a pull-back in demand for many of
the big winners from the pandemic (Peloton
is the poster child for this pullback). Demand
has been shifting toward services,
entertainment and travel.
Rising inflation and interest rates are having
an even more profound effect on consumer
spending and demand. Spending decreases
across-the-board are now expected, as the
economy signals trouble.
RECESSION LOOMING
STAGE 1
RECESSION LOOMING
DTCs must evaluate current market conditions
While we expected a demand pocket in the wake of the Covid boom,
its setting up to be a more long-lasting downturn for consumer brands
- especially online only brands.
The next couple of years hold a great deal of uncertainty for DTC
brands. And, recession is a growing possibility.
The growing likelihood of a general downturn should play a key role in
planning for 2022 and 2023. We see a downturn occurring in three
phases:
STAGE 1
There is a sharp shift down in consumer demand (and sales volume for
brands). Marginal players - with weak positioning and/or financials -
will dropout of the market, together with a wave of consolidation
(M&A). Brands must assess/implement:
-Impact of downturn on category
-Risk assessment; burn rate, CAC vs LTV
-Top-of-funnel vs Bottom-of-funnel evaluation
-Adjust (cut) marketing spend
STAGE 2
A weak market with changing, uncertain conditions, defined by general
malaise and pockets of growth/optimism (with niche consumer groups
relatively better off). Brands must assess/implement:
-Strong loyalty (repeat-purchase) incentives
-Understand/respond to customer sentiment/motives
-Emotionally powered creative ads and strong sales incentives
-Projections on return to trend line
STAGE 3
A slow, uncertain market recovery. Select regions (countries)
recovering more quickly than others. Brands must assess/implement:
-Quickly increase advertising spending to capture market share
-Marketing spend in sync (and slightly above) category trend lines
2023
2021
2020
2025
2022
2024
Demand Pocket
Below Trend Sales
Down-Shift
Demand to remain lower
for expended period
Growth Trend
Ave. Growth/Demand
Demand Pulled Forward
Covid Spending Boom
Recovery
Uncertain, ‘patchy’
recovery’ generally
below previous trend
CONSUMER PRODUCTS DEMAND GROWTH
Aggregate consumer spending on retail consumer products
2026
STAGE 2 STAGE 3
ADJUSTING APPROACH TO MARKETING IN RECESSION
Products/Pricing
Positioning/Promotions
Place
NEGATIVE
-Smaller, cheaper formats
-Lower cost brand extensions
-Private labels
-Free/low cost “moments of joy”
courtesy of the brand
-Trade-In & Financing Programs
-Promote monthly payment plans
-Promote exceptional deals and
low-cost financing
-Offer DIY options
-Emphasize your product/service
as the one that gets the job done
(no fear of wasting budget)
-Concentrate “value” messaging
into volume and lower cost
channels such as Walmart,
Amazon…
-Evaluate regional disparity in
customer sentiment
NEUTRAL
-Loyalty and points system to
incentivize loyalty/retention
-Bonus packs to encourage
purchase
-Promote savings in buying now
(dont postpone and miss out)
-Promote after-sales service,
together with generous returns
policy
-Emphasize dependability
-Use core (mass) channels
demonstrating general empathy,
signaling value (minus the steep
discounts)
-Extend brand into other regions
(countries) where possible to tap
into more neutral-positive
customer cohorts
POSITIVE
-Maintain higher-priced options
into appropriate channels
-Enable discrete purchasing
options
-Offer Trade-Up Programs
-Live now, enjoy now messaging
-Advertise products as treats/
rewards and things your deserve
-Demonstrate superior quality
-Private events, experiences
-Concentrate “spendy” messaging
DTC, based on VIP customer data/
insights
-Focus on cities/locations with
higher “positive” sentiment values
CONSUMER MINDSET
MARKETING DURING RECESSION
ADAPTING TO CUSTOMER MINDSETS
Adjusting to changing market conditions requires brands
to take an approach which is deeply informed by up-to-
date customer insights and understanding.
Broader economic events (such as Covid or impending
recession) do not affect all customers equally. Location,
affluence, age and a number of other factors influence the
outlook (optimism/pessimism) of customer groups.
Brands must take a nuanced approach which addresses
the unique concerns of different customer groups - from
negative-neutral-positive in outlook. To take a one size fits
all solution, is to put the growth of your brand in real
jeopardy during a period of real uncertainty.
The benefit of working across multiple channels is that it allows for
discrete customer communications, which are designed around
unique goals, depending on the outlook (positive/negative) of
customers.
In the context of a recession, volume channels such as Walmart,
Costco, Amazon can be focused much more around
demonstrating value (to negative-to-neutral customers), while DTC
(direct) channels can be used with VIP and price insensitive
customer groups.
Lululemon's trade-in program, “Like New” allows customers to sell-back products directly to the company. In turn, Lululemon, re-
sells the “lightly used” products directly on its website. The re-sold products are labeled by Lululemon with a “Like New” label to
demonstrate authenticity. In addition to repeat purchase goals, the hope is that the “Like New” program will also help the brand
tap into a younger, first-time buyer - getting them on the buying cycle.
MARKETING DURING RECESSION
IMPROVING LIFETIME VALUE
Lululemon has announced two programs aimed at
improving repeat purchase (loyalty and LTV) within one
month of each other; (1)a trade-in program for lightly
used clothes, called “Like New,” and (2)a membership
program.
1. The “Like New” trade-in program: is useful in;
(a)prompting current customers to trade-up and repeat
purchase, while (b)widening the customer base to
younger, less affluent groups, by offering lower cost
product options. This program is well designed for
customers with a neutral-to-negative outlook, as it
facilitates brand participation at a lower cost.
2. The membership program: is more about tapping into
the most valuable customer groups and extracting more
from already strong commitments to the brand. This
program is also well suited to customer cohorts who have
a neutral-to-positive outlook.
As recessionary headwinds grow, look for more brands to
rollout similar programs.
The membership program has a free version offering customers
early access to new products, exclusive items and invitations to
community events. The paid version (priced at $39 per month) will
be merged with the benefits currently extended to Mirror
subscribers - namely, access to workout classes and content.
This effort is largely about helping to increase and expand the
audience for Mirror. But, it's also critically focused on retention and
repeat purchase.
BIG PICTURE INSIGHTS
CONSIDERATIONS
10
10 CONSIDERATIONS
The conditions shaping DTC brand growth in
2022-23.
BIG PICTURE INSIGHTS
6. INCUMBENTS STRIKE BACK
1. VALUATION RESETS
5. DIGITAL TO OMNI-CHANNEL
10. GOING GLOBAL
8. NEW MEDIA RISING
3. DATA DISRUPTIONS
9. MORE POWER TO PLATFORMS
4. VIDEO TO BREAKTHRU
2. CAC INFLATION
7. CONSOLIDATION UPSWING
1. VALUATION RESETS
There is tremendous downward pressure on company
valuations - from top technology companies through to
retail/DTC brands. The buoyant valuations of the past
several years are turning the other direction, quickly.
Coming off the highs of 2021, public markets are down
bigly in 2022. Investor appetite for the retail brands that
were big winners during the pandemic is now very low.
High-growth stories are no longer sufficient to excuse
excessive burn rates and negative EBITDA.
As the public markets get slammed, there will be a major
valuation reset for early stage DTC brands. There will be a
ripple effect, making it near impossible for DTC brands to
raise new financing, at increased valuations.
As a result, DTC brands will need to shift strategies
quickly; (1)reducing burn rates, (2)improving profitability,
(3)refactoring growth/marketshare timelines. Overall
growth ambitions will have to be reset in favor of
sustainability and profitability.
There was a period of time over the past decade where investors
decided that it was rational to apply tech start-up metrics to DTC
brands.
The hope was that tech savvy DTC operators could achieve results
similar to SaaS businesses - with low CAC and an expanding
customer base (LTV growth). While the costs of acquisition may
have been comparable, there simply isn’t the same reoccurring
revenue from DTC retailers. LTV metrics in consumer retail are
generally weak (save for a small number of categories and
exceptional brands).
Listed DTC brands like Allbirds, Peloton, Casper and Warby Parker have seen share prices plummet in the past
several months. Even more scalable, tech companies (Shopify, Amazon) are down considerably.
10 CONSIDERATIONS
2. RISING ACQUISITION COSTS
Over the past 10 years there has been a steady rise in ad
costs for all major channels. Estimates are that Facebook
ad costs rose 9.6x from 2012 to 2017, as the number of
advertisers exploded. During a similar time period, Google
ad costs rose 4.0x.
The crowding effect - where many more brands are
competing for audience attention - is a similar, if not
larger, problem when it comes to measuring the full cost
of advertising through major channels.
Ad cost inflation between 2020 and 2021 was epic. Data
from MediaPost showed CPM costs inflation between July
2020 and 2021, as follows; Google/Youtube (up 108%),
Facebook (up 89%), TikTok (up 92%).
With the pandemic boom behind us, ad inflation should
drop significantly in 2022 and 2023. However, its a very
concentrated industry (big players have serious pricing
power). Google, Facebook and Amazon collectively hold a
65% share of US digital advertising spend.
Any significant economic downturn should reduce pressure on ad
cost inflation from major channels, as overall demand for ad space
drops. Ad volume onto Facebook and Google is already declining,
as brands start to pull budgets back heading into a tighter market
for 2022/23.
It would in fact be smart for Facebook and Google to get ahead of
this downward trend by dropping ad costs significantly ahead of
time. So, there may be some cost relief for brands on those
channels.
DTC brands started prior to 2015-16 (when the number of Facebook advertisers jumped from 2-to-5 million), had a good, long
run, with low costs of acquisition. The runway for growth was long and cost effective. Younger DTC brands (especially those
started in the past couple of years) have hit a serious wall of costs, making it very difficult to scale up.
10 CONSIDERATIONS
3. DATA DISRUPTIONS
By the end of 2022, Chrome will join other popular
browsers, in withdrawing support for “third party”
cookies. On mobile, Apple has applied a formidable
privacy filter with iOS14. These restrictions will have
profound effects on digital advertisers;
1. Spending to reach new customers will push higher.
According to Hubspot research 44% of brands project
having to increase budgets to achieve same results
2. Brands will have to do a much better job of collecting
and interpreting 1st party data
3. Audience surveys, focus groups, cohort analyses to
play a larger role in CRM planning
4. AI will become a (more) critical tool in stitching
together more fragmented data sets to identify
patterns, opportunities
5. Email contacts to be engaged more frequently, more
strategically. Expect brands to acquire more email lists
and devise more sophisticated drip campaigns
6. Similarly chat/messenger social should enjoy another
leg up in usage. Brands must extend the investment
into follower growth on social, to improve customer
engagement (chat) and private traffic opportunities
7. Brands will have to become more adept at identifying
and converting on ‘micro-moments’ and subtle
opportunities to move customers along purchase
paths (through Websites, Email, Chat)
Brands with large pools of first-party data will be able to defray
some of the impact, but will still need to refill the top-of-funnel.
Many high-churn DTC brands who live hand-to-mouth will face
greater pressure to pivot toward new tactics.
3rd Party cookies have allowed brands to efficiently target (and re-target) customers across the Web as those interest-qualified
audiences move from one site to the next. These strategies meant that that entire Web could be used to cultivate sales. Blocking
3rd party cookies could have some unintended consequences. It’s possible that big platforms (eg. Facebook) will become even
more important for advertisers - while the Web (which cannot be re-targeted) gets de-emphasized.
10 CONSIDERATIONS
4. VIDEO TO BREAKTHRU
Video has always held a key place in the growth
marketer’s playbook. As brands face rising challenges,
video needs to move into a more primary position for
DTC brands.
The bottom-up, performance focused tactics (Facebook/
Google PPC ads) will increasingly hit their limits. Moving
forward, brands will need to seek out more break-thru
moments to jump from one tier to the next.
Efforts with video should be directed towards the
following opportunities;
1. TikTok videos. The 30-45 second TikTok video is
destined to become the foundational social media
advertising unit. Being able to create impact with this
short format video is imperative.
2. Livestream video is also revealing itself to be an
important opportunity. Experience in China shows that
brands can use it for a range of goals; selling, creating
brand experiences & entertainment, customer service
and product demonstrations.
3. Longer form, branded content still has an important
place in the mix also, especially where brands can
create shared experiences.
Experience from China where there are no truly effective bottom-
up ads solutions, show how critically important video is for fueling
brand growth. Short videos, livestreaming and long-form video all
play a key role in building the audience attention that brands
subsequently convert to sales.
Great videos can secure more deeply rooted emotional connections with audiences - connections which engender trust, affinity -
connections which last. And, as brands face a confluence of challenges (rising ad costs, limitations on 3rd party cookies and valuation
resets), video may offer the break-thru moments that brands need to make larger gains in share of voice (and share of market).
10 CONSIDERATIONS
5. DIGITAL TO OMNI-CHANNEL
DTC brands have moved beyond being online-only, to
becoming more fully omni-channel. Leading DTC brands
are rolling out offline stores rapidly.
In the aftermath of Covid lockdowns (where digital
surged), there is a rebalancing currently underway, with
offline sales rebounding, while online has slowed
significantly.
It is now essential for DTC brands to have offline retail
strategies. While that could mean opening up ‘owned’
shops, there are other avenues open to DTC brands;
1. Organizing short-term retail (eg. pop-ups) through
platforms like Storefront, who package retail real
estate into shorter time period for smaller brands (or
brands testing a new city)
2. Selling through DTC specialty department stores such
as Showfields
3. Leveraging wholesalers and distributors into new
geographies
4. Opening up and selling through larger omni-channel
retailers (Walmart, Costco, Target and Amazon)
As DTC brands become more multi-channel, customer
engagement is the key to maintaining the principles of being
customer-first and customer focused. The link between mobile-
social, together with customer service (chat) and engagement
(asking customers what they want, like …and dont like) are the
difference between success and failure as DTCs become more
multi-channel. Mobile, social, chat and conversational AI all provide
important links as audiences move between channels.
AR/VR holds the potential for allowing brands to be present (maintaining a consistent experience) across all channels.
Customer service and support are the glue that keeps the customer in focus, helping to keep a consistent presence, while
ensuring engagement and happiness across fragmented touch points.
10 CONSIDERATIONS
6. INCUMBENTS STRIKE BACK
Larger, traditional brands have addressed the challenges
faced by up-start DTC brands in the following ways;
1. They have introduced ‘boutique’ brands to go head-to-
head with DTC offerings (P&G’s Native Deodorant and
“King C. Gillette” razors are examples of this)
2. They have improved digital capabilities and introduced
more online/direct sales channels
3. Have improved the quality (and image) of many
products (especially around concerns of health,
environmentalism, etc)
Covid acted as an accelerant for many of these
transformations. And with inflation (and problematic
supply chains) as growing concerns, larger brands will be
able to exercise advantages in pricing and accessibility
(sustainability) over many of their smaller rivals.
Objectively, most incumbent brands are functionally more
capable than most of their DTC competitors - at least
when it comes to ‘hard skills.’
It’s the ‘soft skills’ where DTCs still exercise real advantages. At the
core of most successful DTC brands lie three characteristics;
1. A tight connection to a well defined audience group (through
social media), where there is a genuine two-way dialogue about
the needs of the customer and the solutions from the brand
2. A niche (unique) point of view (mission/purpose/positioning),
which, by the standard of the industry leader is too narrow &
nuanced to address
3. A culture which is more agile, and more willing to take bold risks
and in the face of challenges
Larger, ‘legacy’ brands have been working tirelessly over the past decade to become more direct and less dependent on 3rd party
retailers. Sportswear brands such as Puma, Nike, Adidas are all now more than 30% DTC in revenue. There is a growing sense
among leading brands that selling through too many channels undermines the brand image. In that context become more DTC is
also about cleaning up brand detritus.
10 CONSIDERATIONS
7. CONSOLIDATION UPSWING
For DTC brands trying to improve repeat purchase and
customer LTV, there is strong motivation to add new
products, and expand beyond a very narrow positioning
(with many brands having only a single, hero product).
As CAC rises and acquisition budgets come under
pressure, more brands will have to answer the question of
whether to launch expanded product arrays or to stay
focused on a smaller product offering.
While aggregators have been gobbling up smaller
ecommerce brands over the past few years (eg. Thrasio,
Pattern), this trend should kick into high gear in the next
few years, with much larger DTC brands consolidating
and merging with one another, in order to:
1. Conserve capital
2. Create product offerings with wider appeal
3. Expand first party data (customer lists)
4. Resell, retarget and improve LTV
5. Gain economies of scale with operations
With valuations of top DTCs taking a tumble (Casper, Warby
Parker), the prospect of audacious exits are dimming. At the same
time, access to capital will be restrained, therefore, the willingness
of DTC brands to consolidate may increase very rapidly (as means
of ensuring continuity).
Consolidation will take many forms in the months ahead, and escalate as follows; (1)brand cross-overs (and collaborations), (2)informal
confederations of DTC brands to pool resources (customer lists, operational expenses, etc), (3)DTC brands merging with one another to
fill-out more complete product offerings to similar consumers, (4)buyouts from aggregators and private equity groups looking to pool
smaller DTCs together.
10 CONSIDERATIONS
8. NEW MEDIA RISING
A large percent of DTC brands rely too much on a narrow
selection of media channels. A frightening number of
brands are almost completely dependent on 1-2 channels.
It’s not uncommon to find brands who funnel 90% of
budgets into Facebook and Google.
While Facebook and Google can be reliable, they offer
very little prospect to upstart brands for MASSIVE break-
throughs. Once DTCs have secured a clear identity and a
rock solid customer engagement strategy, brands MUST
target break-through opportunities. The goal of growth
brands should be to hunt for under-priced attention …and
then maximize the impact of that attention.
The most high-profile opportunities exist around the
confluence of; (1)what’s happening with video on TikTok
(and Reels), (2)livestreaming, and (3)influencers.
Often overlooked opportunities also exist with;
(1)traditional PR, (2)with community management and
content seeding into emerging apps, and (3)out-of-home
(eg. stunts/guerrilla marketing) together with pop-ups.
Community focused efforts like these are more about
hustle than budget, so also well suited to DTC budgets.
For most DTC brands, opportunities in the “Metaverse” are too
much of a stretch, as the barriers to efficiently executing into this
environment are just too high.
Unless there are very easy (affordable) opportunities to gain
under-priced attention, experiments in newer media are more likely
to fall flat and exhaust enthusiasm for future attempts. An
experiment that is more than 5-10% of company effort/budget is
likely to product negative outcomes. (See Page 85)
Most brands would be well advised to widen the number of channels that they have presence on, balancing the need for steady
growth (from stalwarts like Facebook) with the breakthrough potential that comes from experimenting on other channels such as
TikTok, Discord, Reddit, Twitch. The more crowded the channel, the harder it is to - gain attention - and make real break-throughs.
10 CONSIDERATIONS
9. MORE POWER TO PLATFORMS
The unintended consequence of restricting 3rd party data
is that the Web may become a much harder place for
brands to cultivate new customers from.
Large platforms - Amazon, Facebook, TikTok - will likely
supersede the Web as THE environments to access new
audiences. In other words, without cookies and
retargeting across the Web, brands may have to buy/rent
more of that audience attention from the big platforms.
It seems almost inevitable that brands will end up
spending more of their acquisition budgets with the big
attention platforms; Facebook, TikTok, Google/Youtube in
the coming period of time.
This dynamic should also benefit Amazon.
From analysis by Totem in 2020, more than 60% of DTC
brands did not have presence on Amazon. While there
has been a strong cultural aversion among DTCs to go
there, the coming year+ may persuade them to get on
platform, in order to expand sales and reduce CAC. While
DTC brands may still covet direct customer relationships,
conversion costs of Amazon may end up being too
attractive to pass up.
And, while Facebook might be failing as an ecommerce channel
currently, it could flip a switch at some point and make it much
harder to convert traffic outside of its network. Imagine if it costs
5-10x to link outside Facebook. If that comes to pass, then brands
will want to redouble efforts with Facebook Shops.
Amazon has been working hard to accommodate and lure DTC brands onto its platform, making it a more high-quality environment. In
2021, Amazon purged 50,000 low quality sellers. More recently, it has been testing new features to acknowledge local champions (with
a program to allow boutique, local sellers to display badges). These efforts should intensify as Amazon needs to fill up its spare
capacity (the capacity it over-built in 2020-21), with new brands.
10 CONSIDERATIONS
10. GOING GLOBAL TO GROW SALES
Research conducted in 2020 found that the majority of
sales for DTC brands came from a home city - or a city
where a physical shop was located (77.% of brands sold
more than 50% in or near a headquarters or hub city).
The obvious insight is that most DTC brands are way too
local and need prioritize geographic expansion.
So, while native DTC brands bring new channels online
(wholesale etc), they should pay strong consideration to
planting the flag in new cities and countries.
Some of the strategies to scaling into new geographies
include:
1. Doing roadshows, with pop-up retail events or private
buying events
2. Applying focus to hyper-local PR (getting coverage
into local media …and with local influencers)
3. Cross-pollenating with brands from other geo’s
4. Using local distributors
5. Setting up on Amazon and ‘opening up’ new geo’s
Conventional logic says that ‘we are still not maximizing the
opportunity at home, so are not going to turn our attention to
other markets.’ This makes sense for very small DTCs, but for larger
brands, geographic expansion can offer big gains.
Brands take a long time to mature and grow. So by the time a
brand ‘has maximized’ its home market, larger opportunities may
have passed them by. The brand may find itself relegated to being
a city/regional champion, instead of true category leader.
The infrastructure to support international growth has expanded rapidly over the past couple of years. Shopify,
Amazon, Salesforce (among others) have made scaling internationally a real priority and are rolling out the tools
and support to help brands more efficiently expand.
10 CONSIDERATIONS
TOP 200 BRANDS
2
THE TOP 200 LIST
36
CATEGORY ANALYSIS
45
SOCIAL CHANNELS
46
GROWTH & SCALE
47
TOOLS & TECH
48
GLOBAL DTC BRANDS
THE TOP
200
METHODOLOGY
THE TOP 200
Industry reports, listings, leading
brands by category.
Requirements for Consideration of Brands;
(1)Is a consumer, retail brand, (2)Is digital-first,
digital-focused (at least at start-up),
(3)prioritizes a direct approach through its own
Websites and stores (rather than prioritizing
the use of Amazon or distributors).
Excluded from this list are; (1)Media and software
companies, (2)Retailers and distributors who sell 3rd
party brands/products, (3)Food subscription
services, and (4)Traditional brands who mainly sell
offline (even if they are ‘direct’) - IKEA is a good
example of a brand which is ‘direct’ but for the
purposes of this analysis we exclude brands like
IKEA, as they were not digital-first .
2000
BRANDS
TOTAL SAMPLE SET
1
1851
BRANDS
Website, Social Media &
Ecommerce Data, Jan-Apr 2022.
The following channels were used in evaluating
the digital footprint for DTC brands:
Social Media: Facebook, Instagram, Youtube,
Pinterest, Tiktok and Twitter.
Web Traffic Data: Similarweb
DIGITAL DATA AUDIT
2
200
BRANDS
Brand Score = Web Traffic (60%) +
Social Media (40%)
Social Media Weighting: Facebook (25%),
Instagram (25%), TikTok (20%), Youtube (15%),
Twitter (10%), Pinterest (5%)
FINAL RANKING
3
Our goal in building this list of “Top 200”
Global DTC brands, was to look at the
consumer brands which are having the most
impact directly with consumers - in terms of
brand/audience impact and potential.
Of the total sample set of 2,000 DTC brands, 1,851
brands had sufficient Web/Social presence for
inclusion in our rankings analysis.
BY CATEGORY
Fashion & Apparel outperform other
categories, followed by Beauty & Cosmetics.
Relative to its share of the total sample set
(24.7%), Fashion & Apparel way out-
performed in the Top 200, where it represents
44% out of the Top 200.
THE TOP 200
32
BEAUTY & COSMETICS
9
ACCESSORIES
Total: 82
Source: HipArray DTC Brand Database 2022
Sample Size of Companies: n=1,851 (featured in white), Top 200 (in pink)
Total: 317
88
FASHION & APPAREL
Total: 458
5
FITNESS, SPORTS
& OUTDOORS
Total: 33
9
ELECTRONICS
Total: 25
21
HOME & KITCHEN
Total: 229
3
MOM & BABY
Total: 48
17
HEALTH & WELLNESS
Total: 239
13
FOOD & BEVERAGE
Total: 367
3
PET CARE
Total: 47
0
TOYS & HOBBY
Total: 13
Total: 310
Accessories
Beauty & Cosmetics
Electronics
Fashion & Apparel
Fitness/Sport/Outdoor
Food & Beverage
Health & Wellness
Home & Kitchen
Mom & Baby
Pet Care
Toys & Hobby
0.7%
2.5%
2.6%
12.4%
12.9%
19.8%
1.8%
24.7%
1.4%
16.8%
4.4%
1.5%
1.5%
10.5%
8.5%
6.5%
2.5%
44.0%
4.5%
16.0%
4.5%
Top 200
Full database
BRAND REPRESENTATION BY CATEGORY
Full Database vs. Top 200 Brands
RANK
COMPANY
CATAGORY
COUNTRY
FOUNDED
SCORE
1
Yuya
Beauty & Cosmetics
MX
2017
1,500,624,131
2
Shein
Fashion & Apparel
SG
2012
43,026,007
3
Chewy
Pet Care
US
2011
17,030,722
4
Fashion Nova
Fashion & Apparel
US
2006
10,350,312
5
Boohoo
Fashion & Apparel
GB
2006
8,342,193
6
Kylie Cosmetics
Beauty & Cosmetics
US
2015
6,323,669
7
Torrid
Fashion & Apparel
US
2001
4,209,412
8
ipsy
Beauty & Cosmetics
US
2011
3,983,314
9
Colour Pop
Beauty & Cosmetics
US
2014
3,608,674
10
Infinix
Electronics
CN
2013
3,415,277
11
Gymshark
Fashion & Apparel
GB
2012
3,310,593
12
PrettyLittleThing
Fashion & Apparel
GB
2012
3,113,884
13
Fabletics
Fashion & Apparel
US
2013
2,906,628
14
JustFab
Fashion & Apparel
US
2010
2,841,737
15
Lulus
Fashion & Apparel
US
1996
2,748,968
RANK 1-15
GLOBAL DTC BRANDS
TOP 200 BRANDS
GLOBAL DTC BRANDS
TOP 200 BRANDS
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
SCORE
16
Casetify
Accessories
US/HK
2011
2,740,584
17
Made
Home & Kitchen
GB
2010
2,671,219
18
Dolls Kill
Fashion & Apparel
US
2012
2,651,382
19
Adore Me
Fashion & Apparel
US
2011
2,625,356
20
Zenni Optical
Fashion & Apparel
US
2003
2,483,579
21
Savage X Fenty
Fashion & Apparel
US
2017
2,466,572
22
Peloton
Fitness, Sports and Outdoors
US
2011
2,389,117
23
Morphe
Beauty & Cosmetics
US
2009
2,358,588
24
Stitch Fix
Fashion & Apparel
US
2011
2,350,008
25
SKIMS
Fashion & Apparel
US
2019
2,290,835
26
Bombas
Fashion & Apparel
US
2013
2,158,977
27
Everlane
Fashion & Apparel
US
2011
2,148,542
28
Food52
Home & Kitchen
US
2009
2,041,137
29
Ridge Wallet
Fashion & Apparel
US
2013
1,889,935
30
YETI
Accessories
US
2006
1,855,486
31
Boxy Charm
Beauty & Cosmetics
US
2013
1,842,516
32
Sézane
Fashion & Apparel
FR
2013
1,805,756
33
Fenty Beauty
Beauty & Cosmetics
FR
2017
1,747,176
34
Brilliant Earth
Fashion & Apparel
US
2005
1,744,878
35
Kylie Swim
Fashion & Apparel
US
2021
1,689,283
36
Minted
Home & Kitchen
US
2007
1,689,199
37
Touch of Modern
Fashion & Apparel
US
2012
1,575,302
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
SCORE
38
FabFitFun
Beauty & Cosmetics
US
2010
1,540,320
39
Gentle Herd
Fashion & Apparel
CN
1,453,606
40
Warby Parker
Fashion & Apparel
US
2010
1,446,667
41
BarkBox
Pet Care
US
2012
1,385,623
42
Highsnobiety
Fashion & Apparel
DE
2005
1,328,267
43
DECIEM
Beauty & Cosmetics
CA
2013
1,320,803
44
Reformation
Fashion & Apparel
US
2009
1,314,890
45
Rogue Fitness
Fashion & Apparel
US
2006
1,286,129
46
On
Fashion & Apparel
CH
2010
1,267,720
47
On Running
Fashion & Apparel
CH
2010
1,267,676
48
Scentbird
Beauty & Cosmetics
US
2013
1,217,498
49
Drizly
Food & Beverage
US
2012
1,203,907
50
BoAT
Electronics
IN
2016
1,189,026
51
Ruggable
Home & Kitchen
US
2010
1,156,527
52
Cuidado Con el Perro
Fashion & Apparel
MX
2004
1,145,257
53
Huckberry
Fashion & Apparel
US
2011
1,129,453
54
Glossier
Beauty & Cosmetics
US
2014
1,115,860
55
Princess Polly
Fashion & Apparel
AU
2010
1,115,618
56
Misfits MARKET
Food & Beverage
US
2018
1,108,946
57
Lenskart
Accessories
IN
2008
1,108,911
58
Flint and Tinder
Fashion & Apparel
US
2012
1,104,896
59
Mejuri
Fashion & Apparel
CA
2013
1,075,747
60
Scuf
Electronics
US
2011
1,039,211
RANK 16 - 60
RANK 61 - 100
GLOBAL DTC BRANDS
TOP 200 BRANDS
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
SCORE
61
G Fuel
Health & Wellness
US
2004
1,035,791
62
Article
Home & Kitchen
CA
2011
1,018,253
63
FIGS
Fashion & Apparel
US
2013
1,011,255
64
Hims
Health & Wellness
US
2017
995,585
65
Hodinkee
Fashion & Apparel
US
2008
987,831
66
Thrive Market
Health & Wellness
US
2013
987,151
67
Crumbl
Food & Beverage
US
2017
979,633
68
Grove Collaborative
Home & Kitchen
US
2012
970,946
69
Manscaped
Beauty & Cosmetics
US
2016
969,284
70
Beautylish
Beauty & Cosmetics
US
2010
944,083
71
Kith
Fashion & Apparel
US
2011
935,482
72
Alo Yoga
Fashion & Apparel
US
2007
875,733
73
MVMT
Fashion & Apparel
US
2013
865,498
74
Oura
Health & Wellness
FI
2013
856,892
75
Dollar Shave Club
Health & Wellness
US
2012
855,291
76
ButcherBox
Food & Beverage
US
2015
853,485
77
Allbirds
Fashion & Apparel
US
2016
849,868
78
Anker
Electronics
US
2011
847,076
79
Bimba Y Lola
Accessories
ES
2005
826,254
80
Pura Vida
Accessories
US
2010
825,092
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
SCORE
81
ModCloth
Fashion & Apparel
US
2002
822,548
82
Casper
Home & Kitchen
US
2014
813,521
83
Wilton
Home & Kitchen
US
1929
799,321
84
5.11 Tactical
Fashion & Apparel
US
2003
792,682
85
Blue Apron
Food & Beverage
US
2012
741,732
86
Purple
Home & Kitchen
US
2015
739,499
87
Black Rifle Coffee
Food & Beverage
US
2014
735,012
88
Threadless
Fashion & Apparel
US
2000
696,583
89
Suitsupply
Fashion & Apparel
NL
2000
691,737
90
Freshly
Food & Beverage
US
2012
684,594
91
Curology
Beauty & Cosmetics
US
2014
665,559
92
Rtic Outdoor
Fitness, Sports and Outdoors
US
2014
665,045
93
Brooklinen
Home & Kitchen
US
2014
662,952
94
Inkbox
Beauty & Cosmetics
CA
2015
655,966
95
Vuori
Fashion & Apparel
US
2015
653,221
96
Italic
Fashion & Apparel
US
2018
652,514
97
Thrive Causemetics
Beauty & Cosmetics
US
2015
647,711
98
Mobvoi
Electronics
CN
2012
641,209
99
Blackview
Electronics
CN
2013
638,146
100
MeUndies
Fashion & Apparel
US
2011
634,890
RANK 101 - 140
GLOBAL DTC BRANDS
TOP 200 BRANDS
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
SCORE
101
Eloquii
Fashion & Apparel
US
2012
632,716
102
amazfit
Electronics
CN
2015
604,788
103
Go Noise
Electronics
IN
2014
597,963
104
Flexi
Fashion & Apparel
MX
1935
594,577
105
Spanx
Fashion & Apparel
US
2000
592,576
106
James Allen
Fashion & Apparel
US
2006
572,747
107
ThirdLove
Fashion & Apparel
US
2013
565,464
108
Therabody
Health & Wellness
US
2016
559,997
109
Rent the Runway
Fashion & Apparel
US
2009
557,215
110
Birchbox
Beauty & Cosmetics
US
2010
554,477
111
Honest Company
Beauty & Cosmetics
US
2012
553,259
112
Papier
Home & Kitchen
GB
2015
551,036
113
Function of Beauty
Beauty & Cosmetics
US
2015
549,462
114
Mixtiles
Home & Kitchen
IL
2015
549,286
115
Tecovas
Fashion & Apparel
US
2015
548,233
116
Therabody
Health & Wellness
US
2016
537,722
117
Vessi
Fashion & Apparel
CA
2018
536,536
118
Moda Operandi
Fashion & Apparel
US
2010
532,089
119
Hi Smile
Beauty & Cosmetics
AU
2014
523,085
120
Pangaia
Fashion & Apparel
GB
2018
516,705
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
SCORE
121
Loot Crate
Fashion & Apparel
US
2012
515,998
122
GOOD AMERICAN
Fashion & Apparel
US
2016
515,922
123
Solo Stove
Fitness, Sports and Outdoors
US
2011
509,700
124
Athletic Greens
Health & Wellness
US
2010
504,439
125
Harry's
Beauty & Cosmetics
US
2013
503,602
126
Beauty Counter
Beauty & Cosmetics
US
2013
497,078
127
Farmers Dog
Pet Care
US
2014
489,852
128
Wakefit
Home & Kitchen
IN
2014
489,606
129
Aesop
Beauty & Cosmetics
AU
1987
485,854
130
LoveSac
Home & Kitchen
US
1998
480,489
131
Daily Harvest
Food & Beverage
US
2015
479,628
132
MyGlamm
Beauty & Cosmetics
IN
2015
479,471
133
Nectar Sleep
Home & Kitchen
US
2016
479,349
134
For Love & Lemons
Fashion & Apparel
US
2011
479,286
135
SmileDirectClub
Health & Wellness
US
2014
475,736
136
Chubbies Shorts
Fashion & Apparel
US
2011
471,434
137
Mascara de Latex
Mom & Baby
MX
470,859
138
Thread
Fashion & Apparel
GB
2012
467,224
139
NOBULL
Fashion & Apparel
US
2014
464,712
140
Parachute Home
Home & Kitchen
US
2013
457,279
GLOBAL DTC BRANDS
TOP 200 BRANDS
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
SCORE
141
Unice
Fashion & Apparel
CN
1999
457,050
142
Rothy's
Fashion & Apparel
US
2012
455,074
143
Black Milk
Fashion & Apparel
AU
2009
448,743
144
Heatonist
Food & Beverage
US
2013
447,337
145
BlendJet
Home & Kitchen
US
2017
443,902
146
Missoma
Fashion & Apparel
GB
2010
443,121
147
Florence by Mills
Beauty & Cosmetics
US
2019
442,808
148
Gymboree
Fashion & Apparel
US
1976
440,914
149
Dossier
Beauty & Cosmetics
NO
2000
439,640
150
Honeylove
Fashion & Apparel
US
2018
439,452
151
Tonal
Fitness, Sports and Outdoors
US
2015
437,236
152
Veja
Fashion & Apparel
FR
2004
433,010
153
Nurx
Health & Wellness
US
2015
431,117
154
Roman
Health & Wellness
US
2017
416,930
155
Stance
Fashion & Apparel
US
2009
414,417
156
tentree
Fashion & Apparel
CA
2012
410,703
157
Maisonette
Mom & Baby
US
2017
409,770
158
Goli Gummy
Health & Wellness
US
2019
406,790
159
Whoop
Accessories
US
2012
405,761
160
Huel
Food & Beverage
GB
2015
404,783
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
SCORE
161
Away
Fashion & Apparel
US
2015
402,441
162
Bonobos
Fashion & Apparel
US
2007
401,269
163
air up
Accessories
DE
2018
398,605
164
Sheertex
Fashion & Apparel
CA
2017
396,900
165
Armedangels
Fashion & Apparel
DE
2007
392,620
166
Beyoung
Beauty & Cosmetics
BR
2015
392,072
167
Oak + Fort
Fashion & Apparel
CA
2010
387,987
168
Ricky Sarkany
Fashion & Apparel
AR
1985
386,875
169
Burga
Accessories
LT
2016
386,648
170
BaubleBar
Fashion & Apparel
US
2011
376,323
171
Rag & Bone
Fashion & Apparel
US
2002
376,279
172
MNML
Fashion & Apparel
US
2016
373,543
173
PSD Underwear
Fashion & Apparel
US
2007
362,313
174
Snow
Health & Wellness
US
2017
359,201
175
Nativecos
Beauty & Cosmetics
US
2015
354,498
176
Vivo Barefoot
Fashion & Apparel
GB
2004
349,812
177
Luxy Hair
Beauty & Cosmetics
CA
2010
346,640
178
Man Crates
Food & Beverage
US
2011
345,609
179
HUM Nutrition
Health & Wellness
US
2012
344,880
180
Our Place
Home & Kitchen
US
2018
344,572
RANK 141 - 180
GLOBAL DTC BRANDS
TOP 200 BRANDS
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
SCORE
181
Joybird
Home & Kitchen
US
2014
338,745
182
Lume Deodorant
Health & Wellness
US
2017
338,404
183
Axel Arigato
Fashion & Apparel
SE
2014
337,966
184
Rad Power Bikes
Fitness, Sports and Outdoors
US
2007
336,250
185
Gousto
Food & Beverage
GB
2012
335,790
186
Blenders Eyewear
Fashion & Apparel
US
2012
335,340
187
Serena & Lily
Home & Kitchen
US
2003
326,841
188
Groove Life
Accessories
US
2015
325,989
189
Pact Apparel
Fashion & Apparel
US
2009
325,021
190
MILK Makeup
Beauty & Cosmetics
US
2014
324,684
191
Ritual
Health & Wellness
US
2015
324,096
192
Lovevery
Mom & Baby
US
2015
318,819
193
Fresh
Beauty & Cosmetics
US
1991
318,010
194
Rebecca Minkoff
Fashion & Apparel
US
2005
315,883
195
Ugreen
Electronics
CN
2012
313,323
196
Oliver Cabell
Fashion & Apparel
US
2016
309,108
197
Helix
Home & Kitchen
US
2014
303,779
198
Rubyrose
Beauty & Cosmetics
BR
1980
303,648
199
Keeps
Health & Wellness
US
2017
303,206
200
Bokksu
Food & Beverage
US
2015
302,176
RANK 181 - 200
CATEGORY ANALYSIS
Fashion & Apparel outperforms all categories
both in terms of percent of “Top 200” and in
terms of “Fastest 200” brands.
Looking at the largest and fastest growing
categories versus brands launched per
category since 2020, it appears that Food &
Beverage, together with Health & Wellness
categories have recently been over-invested -
in that they have the most new entrants while
having relatively fewer brands in the “Top
200” or the “Fastest 200” brands.
By contrast, Fashion & Apparel, together with
Beauty & Cosmetics appear to have ample
room for new entrants.
THE TOP 200
Accessories
Beauty & Cosmetics
Electronics
Fashion & Apparel
Fitness/Sport
Food & Beverage
Health & Wellness
Home & Kitchen
Mom & Baby
Pet Care
Toys & Hobby
2%
4%
0%
10%
21%
34%
1%
8%
0%
2%
0%
1%
3%
2%
18%
9%
11%
5%
34%
1%
11%
7%
1.5%
1.5%
10.5%
8.5%
6.5%
2.5%
44.0%
4.5%
16.0%
4.5%
0.7%
2.5%
2.6%
12.4%
12.9%
19.8%
1.8%
24.7%
1.4%
16.8%
4.4%
Full Database
In Top 200
Fastest Growing 200
Launched Since 2020
COMPARATIVE CATEGORY STATISTICS
Data: n=1,851 DTC Brands
Percent of brands per category
SOCIAL MEDIA
BRANDS PER SOCIAL CHANNEL
100%
FACEBOOK
100%
INSTAGRAM
97%
TWITTER
96%
YOUTUBE
95%
PINTEREST
BRAND FOLLOWERS PER CHANNEL
FACEBOOK
INSTAGRAM
TWITTER
YOUTUBE
PINTEREST
TIKTOK
50
100
150
200
<5K 5-50K 50-200K 200K-1M >1M
Number of Followers for Top 200 Brands Official Social Accounts for Top 200 Brands
THE TOP 200
Data: Top 200 DTC Brands List
86%
TIKTOK
Most of the Top 200 brands have setup and
maintain official presence across all major
social media channels.
All 200 brands have accounts on Facebook
and Instagram. Twitter, Youtube and Pinterest
each have more than 95% representation. And,
TikTok is currently sitting at 86%.
The same trends follow in terms of number of
followers per channel, with Facebook and
Instagram leading the way. Of the Top 200
brands, more than 50 of them have above 1.0
million followers on Facebook/Instagram.
Brands spend more time and money
cultivating audiences on Facebook and
Instagram than any other channels.
BRAND GROWTH & SCALE
Brands take time to build and grow.
Of the Top 200 brands, 71% were founded
before 2015. Only 0.5% of the Top 200 were
established after 2020.
Share of Web traffic also skews toward the
largest brands. The top five brands account for
23.9% of all traffic.
THE TOP 200
100%
939 BRANDS
78.2%
TOP 200 BRANDS
27.8%
TOP 10 BRANDS
SHARE OF TRAFFIC BY STRATA
The bulk of traffic goes to top brands
23.9%
TOP 5 BRANDS
25
50
75
100
Full DB
Top 200
Fastest 200
0.5%
8.2%
61.2%
27.5%
50.9%
28.4%
47%
30.1%
10.4%
24%
10.8%
Before 2010
2010-2015
2015-2020
After 2020
FOUNDING DATES OF BRANDS
Versus all brands, Top 200 and Fastest 200
Data: n=1,851 DTC Brands
TOOLS & TECHNOLOGY
THE TOP 200
Klavyio
Attentive
Disco
16%
24%
75%
MARKETING
Shopify
Shopify Plus
Next.js
12%
19%
84%
WEBSITE
Route
Loop
ShipBob
4%
6%
8%
OPERATIONS
Afterpay
Klarna
Affirm
5%
10%
14%
PAYMENT
Refersion
Outbrain
Teads
5%
8%
10%
ADVERTISING
Gorgias
Zendesk
Intercom
4%
19%
20%
CRM
Hotjar
Segment
Triple Whale
10%
11%
47%
ANALYTICS
Unbounce
Shogun
Back in Stock
13%
16%
19%
CONVERSION
Yotpo
Recharge
Okendo
12%
31%
33%
CUSTOMER RETENTION
Top three tools per category/type from DTC
brands sample set.
Data: n=1,851 DTC Brands
GROWTH INSIGHTS
3
BRAND GROWTH FRAMEWORK
50
STRATEGIES & CASE STUDIES
55
GROWTH PARAMETERS
66
Tracking data and performance of over
5,000 brands Globally, Totem has developed
its “Brand Growth Framework” as a template
for brand growth.
It provides key strategies needed by start-up
brands to become category leaders. And, at
the same time, provides tactics for
established brands to defend leadership
positions.
When set against the DTC marketing
landscape, the “growth framework” reveals
that DTC marketers tend to be strong on
performance and operational characteristics
(strong on incremental ads, social, CRM) but
weak on; (1)the breadth of media used,
(2)distinctiveness, (3)owning cultures/
categories, (4)break-through creative, and
(5)brand bravery.
Companies that do not continue to grow and develop,
loose momentum and die. Break-throughs require new
mindsets, cultures and strategies.
A very large share of DTC brands - many of whom had
rapid starts - are stuck at critical growth ceilings. They
need to move to the next tier. Similarly, established
brands have blindspots which inhibit higher growth.
TOTEM’S BRAND GROWTH FRAMEWORK
Brand “Bravery”
Own Category/Culture
1-2-1 at Scale (CRM)Advocacy & Trust
New Media Mindset
Virtualizing Experiences
To p - D ow n
MASS MEDIA
(CPM Focused)
Bottom-Up
TACTICAL MEDIA
(CAC Focused)
Pervasiveness
Social Media Engagement
Distinctiveness
Omni-Channel
BRAND GROWTH FRAMEWORK
NEW MEDIA
MINDSET
BRAND
“BRAVERY”
Brave brands have a purpose -
and resolve to take a stand.
They venture big gains with
bold, compelling campaigns.
Investing into underpriced
platforms ahead of the curve.
Well timed investments can
earn brands big rewards.
OWN CATEGORY/
CULTURE
PERVASIVENESS/
PENETRATION
When brands become
synonymous with a culture
and become intertwined with
it at every conceivable level.
Sheer power of presence.
Pervasiveness/penetration
underpins a large share of
market - scale for brands.
DISTINCTIVENESS
OMNI-CHANNEL
How well a brand stands out
against the crowd, or focuses
in on a particular niche. What
makes them memorable.
A full array of channels (offline
and online) ensures that a
brand is accessible at all times
for customers.
ADVOCACY &
TRUST FOCUSED
VIRTUALIZING
EXPERIENCES
Creating quintessential brand
experiences via new
technologies (VR/AR,
livestream, haptics and more).
A healthy relationship with
customers - brand delivers on
its promises and makes things
right for its customers.
1-2-1 AT SCALE
(CRM)
SOCIAL MEDIA
ENGAGEMENT
Systems to communicate with
individuals and segments at
scale, while keeping a
personal touch.
Social content which is highly
responsive, conversational and
focused on authenticity and
reciprocity with audiences.
PRODUCT
SUPERIORITY
ABOVE ALL
BRAND GROWTH TIERS
Bottom-Up
TACTICAL
MEDIA
(CAC Focused)
Top - Down
MASS
MEDIA
(CPM Focused)
STARTUP SCALING GROWTH MASS
$1 - 10M
$10 - 50M
$50 - 500M+
PERVASIVENESS/
PENETRATION
OMNI-CHANNEL
OWN CATEGORY/
CULTURE
ADVOCACY &
TRUST FOCUSED
BRAND
“BRAVERY”
VIRTUALIZING
EXPERIENCES
NEW MEDIA
MINDSET
1-2-1 AT SCALE
(CRM)
DISTINCTIVENESS
SOCIAL MEDIA
ENGAGEMENT
Early stage brands focus on bottom-up strategies, namely performance digital/social
(CAC). By contrast larger (more mature) brands focus on brand level, awareness
biased advertising (CPM). The space in the middle (owning a culture, brand bravery
and new channels) is where brands can tap into accelerated growth potential.
These middle characteristics are critical for;
(1)DTCs to jump up into higher tiers, and
(2)Mature brands to re-ignite growth.
Time
Sales uplift over base
Long-term driver of growth
Short-term sales lift
BRAND
BUILDING
SALES
ACTIVATION
Source: Binet & Field, 2013
BRAND BUILDING VS SALES ACTIVATIONS
60:40 SPLIT IN FAVOR OF BRANDING
Longitudinal research into how to balance branding and
sales tactics from Field & Binet has demonstrated that for
most brands (in most cases), the optimal split between
these activities is 60:40 in favor of branding.
Sales tactics work really well in the near-term but an over-
reliance on sales activations leaves brands operating on a
treadmill, paying high customer acquisition costs, offering
up discounts to convert, while retaining much lower
customer LTV.
Given the bias of DTC marketers toward “performance”
tactics, systematic under-investment in brand building is a
challenge for a large percent of brands.
To get out of this treadmill brands must balance short-
term sales efforts with longer-term brand building.
Branding creates; (1)identity, (2)wider awareness,
(3)emotional engagement and (4)trust when it comes to
the moment of truth (at purchase).
Brands who can elevate above key competitors - with strong
equity and enhanced pricing power - can reformulate the mix
between brand and sales focused tactics. In this context, the 60:40
brand-sales split advocated by Binet & Field can be re-formulated
to meet specific tactical goals of the business.
BRAND GROWTH TIERS
Bottom-Up
TACTICAL
MEDIA
(CAC Focused)
Top - Down
MASS
MEDIA
(CPM Focused)
STARTUP SCALING GROWTH MASS
PERVASIVENESS/
PENETRATION
OMNI-CHANNEL
OWN CATEGORY/
CULTURE
ADVOCACY &
TRUST FOCUSED
BRAND
“BRAVERY”
VIRTUALIZING
EXPERIENCES
NEW MEDIA
MINDSET
1-2-1 AT SCALE
(CRM)
DISTINCTIVENESS
SOCIAL MEDIA
ENGAGEMENT
Long-term
brand lift
Short-term
sales lift
BRAND
BUILDING
SALES
ACTIVATION
When a brand has been sufficiently established, advertising investment ratios can be re-evaluated.
The share of performance spend can be adjusted downward as brands build momentum from
equity over time. At key plateaus brands enjoy “halos” which provide lift even if advertising
expenses are reduced. Brands which reach plateaus should experiment more and invest more in
new initiatives (eg. “Brand Bravery, Virtualization).
$1 - 10M
$10 - 50M
$50 - 500M+
STRATEGIES & CASE STUDIES
FRAMEWORK
IN ACTION
FRAMEWORK IN ACTION
DISTINCTIVE
-NESS
Owning and amplifying the brand codes that
make Starface distinct give them the opportunity
to eventually own the category.
A STAR IS BORN EVERY MINUTE
Where most acne patches are purely functional, Starface
stands out from the crowd with a fun, fresh approach. Its
signature bright yellow “hydro-stars” are playful stickers
that “work well and make zits look fun,” according to
reviews on social media.
Product, brand and overall service delivery are all clearly
designed around balancing fun with functionality. With
over 187 million views on TikTok, Starface has the makings
of being a cult brand.
The challenge that a brand like Starface is likely to
confront is in having a deluge of look-alike, copycat
brands who dilute their distinctive and innovative identity.
Starface will have to continue to defend this position by
using highly distinctive branding and imagery to defend
its look, style and approach as THE approach…the one
that consumers want to be seen wearing over the others.
Distinctiveness is about consistently being on-brand and
clearly identifiable from competitors. Brand codes
(images/icons/colors) which are repeated and amplified
become barriers to protect category positioning from
competitors.
A fun, functional product has given
Starface considerable traction in its
category.
FIGS has created a new category from inside the
medical apparel industry, rescuing it (and medical
professionals) from being dull.
FRAMEWORK IN ACTION
OWN
CATEGORY
FIGS has created a new category (and culture) for
fashionable, more-functional medical apparel.
The stated goal of the brand is to be a premium brand in
an otherwise staid/dull industry, doing for medical apparel
what Starbucks did for coffee, and Lululemon did for
workout clothes. Just imagine how thankful all the (very)
affluent medical professionals are for FIGS’ fresh
approach.
When it IPO’d in 2021, FIGS was valued at $4.57 billion
within the $10 billion US medical apparel industry (Global
industry valued at $50 billion). While its share price has
followed other DTC players (downward) since its IPO, the
market segment (TAM) it is focused on is profound.
The lesson for DTC brands here is less about what
marketing can do, more about the importance of
category design, positioning and finding important (un-
tapped) TAM’s to focus on.
FIGS RESCUED A CATEGORY THAT
WAS ON LIFE SUPPORT
As the culture defining brand, FIGS is in
the drivers seat when it comes to
shaping the next moves in the category.
FRAMEWORK IN ACTION
PATAGONIA PUTS ITS MONEY
WHERE ITS MOUTH IS
Patagonia has a consistent track record of true brand
bravery. There is a genuine willingness to put sales
revenue at risk to stand up for what they believe in - the
environment, sustainability or politics.
A lot of brands make small contributions to CSR
initiatives (eg. A share of each sale given to a cause) but it
takes considerably more bravery to put your sales at risk,
by taking a bold stand for something. Patagonia, has
over-and-over taken such bold moves.
“Don’t Buy This Jacket” launched on the biggest
shopping day of 2011 was designed to put brand values
(and equity) ahead of short-term sales results.
With the 2020 “Vote the Assholes Out” campaign, they
put loosing half the US voting population at risk. While
Republican’s may have burned their Patagonia pants, the
brand cemented its position as an emblem for Democrats.
And, in 2021, in protest over the political connections of
Jackson Hole resort ownership, Patagonia refused to sell
its product in the small ski town.
Bravery counts for a lot in brand building. And, it’s often
addition by subtraction. Nothing ventured, nothing
gained.
BRAND
BRAVERY
During the 2020 US Presidential
Election, Patagonia took a political
stand with it’s “Vote the Assholes
Out” pants’ tags.
In 2021, Patagonia refused to sell its
products to ski resort Jackson Hole
in protest over connections to
republican representatives.
Patagonia ran its “Dont Buy This
Jacket” campaign during the 2011
Black Friday sales season to raise
awareness for sustainability.
FRAMEWORK IN ACTION
GROWTH BRANDS DON’T GET
SPOOKED BY NEW MEDIA
NEW MEDIA
MINDSET
The Nextdoor “Treat Map” is an interactive tool for
neighborhoods across the US to rally local communities
around Halloween. The Treat Map is like Waze or Google
Maps but for candy and decorations.$
Reese’s was the 2021 sponsor for the Treat Map on
Nextdoor. The Orange, yellow and brown of Reese’s was
present across the entire interactive feature. Product
related content and ads were also presented across the
Nextdoor App.
New media channels are extremely valuable for growth-
focused brands.
Innumerable studies have demonstrated that additional
media channels provide “incremental lift” for brands, with
each new channel providing 5-10 points of additional ROI
on campaigns.
While valuable for both DTC and incumbent brands, new
media are likely to be more profoundly important for
larger brands. New (especially innovative and
experimental channels) allow incumbent brands to re-
fresh audiences and stimulate renewed excitement.
Brands that use the same media channels too frequently, can see their messages fade into the
background. With its 2021 platform-level sponsorship on Nextdoor, Reese’s succeeded in putting its
brand at the center of Halloween, while entrenching its brand with new audiences.
QUIP has been among the more aggressive DTC brands when it comes to expanding to new media
channels. In addition to break-thru ads in Times Square, QUIP either has or will present ads on
Subways, Bus Shelters and through Digital OOH locations.
FRAMEWORK IN ACTION
QUIP BILLBOARDS BITE INTO THE
BIG APPLE
QUIP has been among the most active DTC brands when
it comes to diversifying ad mix away from digital, to build
a more complete (pervasive) presence across digital and
traditional channels.
Out of home (OOH) seems like an unlikely complement to
digital. OOH seems like a vestige of advertising’s more
blunt, in-your-face past. But that is exactly the point when
it comes to OOH, TV and some other more traditional
(mainstream) forms of media.
Billboards wrapped around Times Square together with
Subway ads peppering the city help QUIP move towards
a few important goals;
1. They get noticed: both locally where the physical OOH
ads are positioned and through the ripple effect of
social media and PR coverage
2. They signal trust: these larger ad formats carry a sense
of gravitas and signal to audiences that the brand is
legit.
Especially with higher consideration products - such as
healthcare - building trust is all-important. QUIP has
raised upwards of $160 million with the goal of building a
lasting, global business in the oral care market. In this
context, bottom-up (acquisition) just isn’t enough to fuel
growth
PERVASIVE
-NESS
Haven’s Kitchen, which was started as a cooking school has been able to get back to its roots in connecting instructional
content with commerce, using QR codes to drive customers to cooking videos and recipes on its site. A possible next
step for the brand might be in connecting customers to the cooking school location, and/or adding AR to QR scans.
QR CODES ARE A CRITICAL LINK
BETWEEN ONLINE, OFFLINE
QR codes are finally getting their due as a tool for
bridging online and offline. The low-touch, no-touch
environment during the pandemic, saw QR codes get
adopted much more widely by both brands and
consumers.
Haven’s Kitchen added QR codes to its retail boxes. Those
QR codes are linked to cooking videos - helping them
drive traffic from offline presence at Whole Foods and
Target, to their own Website.
The QR code scans from offline are resulting in significant
increases to Website traffic. Engagement with on-site
recipes increased by 70% in the first 30 days after the
new (QR code) pouches launched.
This tactic has helped the brand become more DTC,
where it would otherwise be very difficult for a
refrigerated product to go direct.
In addition to building potential for repeat (loyalty
related) purchases, the brand is able to gain important
customer insights (from when they scan, what they
engage with…).
FRAMEWORK IN ACTION
OMNI -
CHANNEL
Happy Socks’ Facebook Messenger bot taps into Facebook audiences with targeted ads and prospect messaging.
Interested customers are then in a position to narrow down the parameters for shopping by answering questions (for him/
her) and selecting from style/thematic options. The whole process is linked to check-out from inside Messenger.
FRAMEWORK IN ACTION
HAPPY SOCKS KICKS OFF
CUSTOMER CONVERSATIONS
For Christmas and Valentines Day, Happy Socks setup a
guided selling “gift bot” to help its customers find the
exact right products from its 300+ sock styles. These
seasonal, personalized shopping experiences resulted in
an average 3X ROAS.
The use of Conversational AI has exploded over the past
several years as brands endeavor to offer customers more
personal, careful solutions - at scale.
And, as data and privacy issues (namely the elimination of
3rd party cookies) expands, first party data coming from;
(1)owned channels, such as Websites and email lists, and
(2)from platforms …becomes essential for marketers.
In this context, building up more robust, conversational
(1-2-1) lines into Facebook is valuable in allowing brands
to access new audience groups and to pull audience data
from engaged followers.
In a world with 3rd party cookies, collecting this type of
data was outsourced to the ad networks. Moving forward
the onus is shifting back to the brand to collect customer
profiles and scale these data.
1-2-1 AT
SCALE
Users were able to take part in an AR experience that transported them to a tropical
destination where they could explore and shop a variety of lingerie in situ.
FRAMEWORK IN ACTION
VIRTUAL VACAY VISION
VIRTUALIZING
EXPERIENCES
Virtualization of brand (and product) experiences
advanced significantly during the pandemic - and will be
increasingly more important over the coming few years.
At present, Snapchat is providing stepping stone AR/VR
opportunities, allowing brands to count some easy wins.
Lingerie brand CUUP partnered with Snapchat to
implement a shoppable AR campaign in 2021. The
campaign transported shoppers to a virtual vacation spot
where they could imagine what different bra styles would
look like in situ.
The CUUP Shoppable Lens was viewed by over 5.56M
Snapchatters - mostly GenZ and millennial audiences. The
participants in this virtual window shopping x vacation
experience engaged with the experience for over 19
seconds on average.
Virtualization efforts are set to shift from the realm of
campaign/buzz building to being more foundational.
Increased attention on the Metaverse and Virtual Reality
will start to accelerate these initiatives. Brands need to
start understanding how/what works in this space.
In its experience with SMS Chat, Misfits has found
that customers who engage in conversation have a
19% higher LTV than average cohorts.
FRAMEWORK IN ACTION
YOUR BEST CUSTOMERS
DESERVE SWEET DEALS
Health and snack food company Misfits has made
extensive use of SMS & Chat based social media to
cultivate trust with its customers. Customer chats through
social and SMS are used to follow up on orders, gain
feedback on products and support sales and repeat sales.
The brand has recognized that the customers who
engage on SMS and social channels are also its most
engaged and loyal.
As a reward to these highly engaged customers (where
high levels of trust have been built), Misfits offers up first
dibs on its latest product drops. Misfits’ limited edition
Peanut Butter & Jelly bar was made available to its Chat
customers - by giving them exclusive access codes.
Finding small opportunities to reward your most loyal
customers is critical.
Access to limited edition drops, offered up over a Chat
feels a lot like visiting a neighborhood shop and getting a
small token of appreciation. These little tokens go a long
way to stimulating trust and advocacy that lasts.
ADVOCACY
& TRUST
The limited edition drop for Misfits’ PB&J
bar was first made available to its most loyal
customers from its Chat channels.
FRAMEWORK IN ACTION
AUDIENCES CO-AUTHOR A
STORYTELLING BRAND
H&M who owns Monki describes it as a ‘storytelling’
brand. As such, Monki looks to its audiences to help co-
author the brand story - its a highly collaborative
interplay between brand and customer.
Monki’s track-record in marketing reflects this co-creative
path to building a brand. Social media and audience
engagement provide the foundation for this collaborative
approach, where the brand provides incentives to the
audience for its on-going inputs. Audiences help drive the
direction of the brand, and the direction of product
design and merchandising.
Brand and audiences come together on a regular basis in
what’s called the “Club Monkisphere” where audiences
participate in crowd selecting/creating ideas with the
brand. Monki has done several capsule collections
together with its audiences.
User generated content also plays a pivotal role in Monki
Television and Monki magazine. And, Monki is an early
mover in the livestreaming space, which could end up
being the forum for the best quality co-creation
opportunities.
SOCIAL MEDIA
ENGAGEMENT
Sweatshirt as part of a crowd-
created capsule collection by
the Monki Community.
“Club Monkisphere” is a regular
competition that invites audience to
style their own favorite looks.
BRAND GROWTH FRAMEWORK
GROWTH
PARAMETERS
The prevailing strategy among DTC brands
is built on forming close engagement with
customer groups, providing sticky solutions
which drive strong LTV (repeat purchase) as
well as lower CAC (via word of mouth).
The bias toward improved LTV metrics, has
lead many DTCs to prematurely widen their
product range. Look at Casper who has
gone from marketing a single mattress to
becoming a ‘sleep store.’ Arguably, Casper
should’ve been seeking new customers
rather than improving existing LTV.
In the coming months, the question of
acquisition vs loyalty will be the core
challenge to sustaining growth.
By contrast, larger (incumbent) brands have a top-
down view which prioritizes continual acquisition.
Research from sources such as the Ehrenberg-Bass
Institute suggest that loyalty (and LTV) are over-
estimated and, that, to grow, brands must focus more
on acquisition. The research also suggests that brands
have very little power to curtail customer defection.
Our view is that both models must be supported.
AN EMERGING GROWTH DILEMMA
REFACTORING P&L VS “TAM” EXPECTATIONS
When the funding runs out, will there be a business there?
DTCs must improve CAC/LTV metrics and find quicker routes to
profitability. This will likely come at the expense of maximizing TAM
potential.
When it comes to planning out the question of how to balance TAM
potential with profitability, we group companies into two types; (1)Hero
Product Tacticians and (2)Solution Set Strategists.
“Hero Product Tacticians” - are focused on a very narrow product range
(often a product which is innovative and compelling).
“Hero Product Tacticians” are typically biased toward acquisition. True
disruptors should push to maximize TAM potential, while maintaining a
narrow product range. Brands with fewer competitive barriers (weaker
products/tech) should reduce CAC and shift more to LTV.
“Solution Set Strategists” - are more focused around satisfying a more
general consumer need or lifestyle interest. “Solution Set Strategists”
sometimes evolve from offering a single hero product. Alternatively, they
excel at audience engagement and brand building (people want to own
their brand because it’s an emblem or they trust them to deliver quality).
“Solution Set Strategists” are by their nature biased toward LTV metrics
and should therefore pull back on acquisition spending more quickly
(while developing loyalty, repeat purchase and user-get-user programs to
fuel organic growth).
Both types of companies should pursue opportunities to:
1. Locate and lock-in lower CAC
Brands should experiment more widely with alternative marketing
channels (eg. TikTok and Amazon over Amazon and Google).
2. Message a wider audience
DTCs often make the mistake of targeting too narrowly, when a wider
audience is at play. By doing so, they are imposing high CAC on
themselves. To scale, DTCs must adjust attitudes about narrow,
performance-based targeting and consider programs built more around
memorable, high-impact creative. Great creative (video in particular) has
break-through potential and can expand well beyond a narrow audience.
2. Expand to alternate geographies
New geographies hold untapped potential - both; cities in your home
country, as well as other countries. Launching into regions with lower
costs/competition offer an immediate bump. Adding a new geography is
generally more cost efficient than launching a wider product array.
TAM potentials to
go “un-realized”
2020 2025 2030 2035
“TAM” TOTAL ADDRESSABLE MARKET
PROFIT/LOSS
Profitability
Maximum
“TAM”
DTCs will have to become
profitable more quickly
BALANCING TAM POTENTIAL WITH PROFITABILITY
For venture backed DTCs, the timelines and goals of growth are shifting
DTC POSITIONING MATRIX
EXPERIENTIAL
Narrow
FUNCTIONAL
(Who/What)
Broad
(Why)
PRODUCTS
SOLUTIONS
PEOPLE
PURPOSE
COMPREHENSIVE
SEGMENTED
DTC BRANDS
Focusing on solutions
above just products alone,
DTCs break out of product
categories. Solutions
represent interests that go
beyond a single product
purchase, creating scope
for long-term engagement
with audiences (and
hopefully better LTV).
DTC BRANDS
DTC brands are good at
understanding the ‘codes’
and ‘ethics’ of their target
customers. Where
traditional marketers are
focused on demographics,
DTCs are focused on the
issues/causes that ‘move’
these audience groups -
and shared purpose.
The customer focused strategies of many DTC brands have allowed them to understand customer
needs quicker and more comprehensively. DTC brands have elevated the concerns of customers,
with purpose and solutions trumping products and demographics. By contrast traditional
(incumbent) brands view the world of marketing as product focused, where the needs of
customers (specifically those of unique segments) can go overlooked.
DTC POSITIONING MATRIX
EXPERIENTIAL
Narrow
FUNCTIONAL
(Who/What)
Broad
(Why)
PRODUCTS
SOLUTIONS
PEOPLE
PURPOSE
COMPREHENSIVE
SEGMENTED
Products are sold to
provide utility. Products
(units) are how categories
are measured.
(eg. Mattresses).
Solutions are needs that
go beyond an individual
product, connect to a
pervasive interest.
(eg. Sleep)
Brands focus on
segments to build
affinity. This is useful
early but limits growth.
(eg. GenZ)
Purpose (missions)
build depth with
audiences and point of
distinction.
(eg. Environmentalism)
Brands with truly innovative products can stay focused on marketing a single ‘hero’ product. More
and more DTCs however are moving ‘upstream’ by expanding the offering to address wider
customer opportunities (providing solutions). There is a delicate balance between (1)being too
focused on a narrow product range and/or a tightly defined audience set, and (2)expanding too
widely against a solution-set or purpose that the brand cannot uphold.
“Solution Set Strategists”
“Hero Product Tacticians”
Long-term driver of growth
Short-term
SOLUTIONS
PRODUCT
CAC VS LTV: CHALLENGE FOR SMALL BRANDS
GETTING SMART ABOUT LTV
Larger brands have favorable CAC vs LTV metrics and
often can achieve profitable outcomes simply due to
scale and brand favorability.
DTC and niche brands must (1)hunt down lower CAC
opportunities, and/or (2)improve LTV. As costs rise on key
channels, such as Facebook, more brands will have to get
good at extracting more, per customer.
Most DTC brands must stretch their category and
merchandise around a wider solution set, or sell a lifestyle
solution. This is why DTC brands ladder up from
functional product categories and pitch ‘solutions
focused’ or ‘purpose’ driven offers. It’s how smaller brands
succeed in the face of rising CAC.
For venture funded DTC brands, 1:1 CAC/LTV metrics may have
been acceptable (especially during launch and growth phases) -
as brands raced to capture market share (and maximize TAM).
However, as valuations for DTCs have tumbled, the expectations
around metrics will quickly change. And, as it becomes increasingly
difficult to raise follow-on capital, DTCs will have to improve CAC/
LTV metrics into the 2-3x range. At 2-3x, brands have the capital to
re-invest into acquisition and operational expenses.
5x
3x
1x
CAC
LTV
At 5x LTV/CAC, brands are
enjoying the benefits of strong
brand equity and an efficient
marketing funnel.
At/above 5x brands should
consider raising marketing spend,
as they might be leaving
marketshare gains on the table.
3x LTV/CAC is a benchmark ratio
for ecommerce brands globally -
a reflection of a healthy
marketing funnel.
At this level, every unit of
marketing spend is returning
three units of LTV. At this ratio,
brand and conversion metrics are
likely well tuned.
1x LTV/CAC is characteristic of a
new brand ramping up growth
OR of a stale brand with little
margin, low repeat sales.
For new brands, who must over-
invest to build marketshare, a 1:1
ratio may be justified but over
time, this metric should improve.
FUTURE-FORWARD
4
GLIMPSE INTO THE FUTURE
73
FIVE TRENDS FROM CHINA
74
MEDIA PORTFOLIO
83
APPS & OPS TO WATCH
86
Unencumbered by traditional media and
legacy marketing practices, China has
jumped fully into digital/mobile marketing.
In this future-forward environment, 90% of
all marketing budgets flow into digital.
And, from a consumer standpoint, (almost)
all of China’s consumers are fully involved
in mobile, social and mobile payments.
As a result, China is 5+ years ahead when it
comes to widespread adoption of tech in
marketing. Looking at what’s happening in
China marketing provides a glimpse into
the future for western brands.
Not all trends from China are transferrable.
QR codes really never materialized in the
West. Mobile messaging and chat based
social is still way, way behind. But there are
five characteristics from China’s future-
forward, ultra-mobile, digital ecosystem,
that seem destined to play a larger role in
the West as it evolves toward a more
digital-first mode of marketing.
A GLIMPSE INTO THE FUTURE
FIVE TRENDS FROM CHINA
Future-forward brands will want to take a closer look at
what is happening in China with the following five trends.
These trends are fully in-play in China …and on the cusp of
emerging more fully Globally.
FUTURE-FORWARD TRENDS
5. RETAIL RE-IMAGINED
1. BIG PLATFORMS DOMINATE
4. BRAND LIVESTREAMING
3. GAMIFICATION OF SHOPPING2. SOCIAL COMMERCE
1. BIG PLATFORMS DOMINATE
There are growing signs that the US digital ecosystem will
start to look more like China where; (1)the big platforms
operate more as ‘walled gardens’ and (2)the neutral
territory of the Web is less salient for connecting with
new customers. Ironically, it is the recent data and privacy
moves which are the catalyst toward this likely outcome.
In this context, brands will be less able to rely on
harvesting customers from the Web and will need to rely
more on large platforms - to both connect with and
convert customers.
2022-23 may be a pivotal time period for DTC brands as
they look to adjust to rising acquisition costs (CAC) and
improve performance - as they also face headwinds from
an emerging recession.
Amazon is particularly well placed to provide refuge to
struggling DTC brands. It has among the lowest
advertising costs and has over-built capacity, allowing it
to accommodate a massive increase in scale.
In a world where big platforms consolidate more of the market,
DTC brands (over time) may shift from being ‘owners’ to ‘renters’ …
eventually being forced to pay for customer conversion while not
retaining the customer data. Alibaba (and its core platforms Tmall and Taobao) account for more than 80% of all ecommerce in China. In China, brands (typically)
dont even setup Websites of their own, as the efficient path-to-purchase is through a big platform. Consumers looking to buy
something have historically gone straight to Taobao. As Amazon continues to expand, its role in the US could end up mirroring that of
Alibaba in China.
FIVE FUTURE-FORWARD TRENDS
PURCHASE
CONSIDERATION
AWARENESS
GLOBAL CHINA
PURCHASE
CONSIDERATION
AWARENESS
ENTERTAINMENT
ENGAGEMENT
PAYMENT
‘SUPER APPS’ FULLY
ENCIRCLE AUDIENCES
CUSTOMER JOURNEYS
ACROSS CHANNELS
*Advertising as
predominant
business model
*Digital platforms
prioritize eCommerce
business model
China doesn’t operate on the concept of funnels, where users jump
between apps on the open Web. Each platform is its own island, offering
up a full suite of content, commerce and social. Instead, brands are
incentivized to maintain mini-funnels, concurrently on multiple platforms
1. BIG PLATFORMS DOMINATE
2. SHIFT TO SOCIAL COMMERCE
China’s digital ecosystem is organized around the concept
of social commerce. The distinctions between social and
commerce have been eliminated. The goal on every
platform (WeChat, Tmall…) is to rally social attention (and
group validation) to ecommerce action.
Social CRM (private traffic), together with influencers
(and “Key Opinion Consumers”) represent waves of
collective attention/intent, which brands convert through
sales events (such as group, flash & livestreaming sales).
A core trait of social commerce is “private traffic” -
China’s answer to CRM. Private traffic is to China what
email marketing is to brands in the US. And, instead of
bridging users from a 3rd party platform to an ‘owned’
website, brands in China connect interest inside an app to
direct sales inside the same app. In this sense, brands are
building a network of small funnels - one for each app.
In the US, there are clear lines between apps that raise awareness
(through ads), from those which provide social proof/validation
(influencers), and those which allow customers to buy. Facebook
revenue comes (overwhelmingly) from advertising. And, its
attempts at building up shops (ecommerce) have been
underwhelming (so far). Compare this to China where advertising
is a much smaller portion of overall revenue for major platforms.
Private traffic and group purchase dynamics have always been critically important in China. Its a really low trust environment,
requiring more validation/consideration (in general). There is a lesson here for Global marketers, in that, if you can rally more
social validation - and create moments of group trust and commitment - the sales process can be dramatically expedited.
FIVE FUTURE-FORWARD TRENDS
Ad Revenue
Other
Payments
Gaming
TENCENT ALIBABA META
17% 60% 98%
TIKTOK
DURATION LIFESPAN OF POST
INSTAGRAM
CONVERT EXCITEMENT TO
SALES
CONVERT
FACEBOOK
CONVERT
CONVERT
ENGAGE & CULTIVATE
TRUST
AUDIENCE ATTENTION EXCITEMENT
TIKTOK WILL LEAD SOCIAL COMMERCE
TikTok (the Global version) does not yet have embedded
shops for on-platform ecommerce.
But, look for TikTok to play a leading role in the evolution
toward social commerce Globally. TikTok has the
advantage of being able to get the formula right in China
first, with its native version of its platform (Douyin), and
then rapidly rollout Globally once it’s fully refined.
And, it is not under extreme pressure to rollout globally
(yet), as; (1)it is still growing rapidly with its social
functions, and (2)Facebook is struggling to crack-the-
code with commerce.
We expect that TikTok will launch native/embedded
shopping functions outside of China sometime in the next
12-18months.
TikTok does an incredible job of helping brands amplify content
quickly, create widespread attention and support impulse
purchases - in what we call “excitement ecommerce.” By contrast,
Facebook and Instagram dance to a slower beat, and are more well
suited to building brand awareness and cultivating a longer-term
sale.
While it is great at converting excitement into action, content on
TikTok is fleeting and requires constant stoking by brands. This
mode is ideal for brands in fashion, beauty, hobbies where impulses
can be more easily excited.
If a brand can build trust, it can get into a powerful rhythm of
producing “see now, buy now” success with product drops.
2. SHIFT TO SOCIAL COMMERCE
See Now, Buy Now!
3. GAMIFICATION OF SHOPPING
The gamification of shopping has exploded in conjunction
with the rise of social commerce.
Gamification of shopping in China can be observed
through the following trends;
1. The ubiquity of social media connected shopping apps
such as Pinduoduo, which encourage social contacts
to band together and make discount group purchases
2. The rapid expansion of loyalty and rewards programs
3. LIvestreaming events where sales are limited by time
and a limited number of products
4. The use of blind boxes (mystery boxes), lucky draws
for branded collectibles and special gifts with purchase
5. An explosion in the number of co-branded and cross-
brand collaborations to create special edition, limited
edition products
6. The use of vending machines with gamified interfaces
7. Cross-over shopping experiences using new media
such as AR/VR and the metaverse
In an environment where shopping is highly social (and
connected via social media), the brands that create more
moments of joy and discovery put themselves in a better
position to succeed. Social commerce solutions are swiftly being deployed across Asia. There are also clear signs that gamified shopping
is coming to the West. The lockdowns of 2020-21 accelerated this trend. It should continue as brands look to create
more unique and memorable brand experiences.
FIVE FUTURE-FORWARD TRENDS
4. BRANDED LIVESTREAMING
Flowing from the concept of shopping as being
entertaining, China has propelled forward livestreaming as
a legitimate form of brand-audience engagement. Covid
lockdowns in China and the West have advanced the
livestreaming trend.
Selling (with online influencers as pitch-people) has
captured most of the attention when it comes to brand
livestreaming. The trend however has such wider
application than simply selling. It’s more than a new age
QVC.
Livestreaming has become institutionalized by brands to
address four distinct objectives;
1. Selling (where a flash sale with influencers helps the
brand establish a hero product quickly …and/or build
awareness for a new product rapidly)
2. Brand Storytelling
3. Product/Brand Demonstrations
4. Customer Service (where sales and service staff from
the brand engage with customers and prospects to
answer questions and challenges about the product in
real time, for all to see)
Livestream customer engagements - speaking live, online with
customers - fit perfectly with the DTC mission. In the event that a
DTC brand does not yet have any physical stores, a livestream
session is a pretty close substitute for the in-person engagement
that might happen in a shop. And for DTC brands launching pop-
up shops and special events, livestreaming can dramatically
amplify awareness from offline to online.
Branded livestreams are absolutely ubiquitous in China. In the mall before the afternoon rush, salespeople are doing
livestreams in their shops with VIPs. Attend an event or visit a popular location …brand representatives and
influencers are livestreaming the proceedings. Brands are also launching “owned” talk and game shows.
FIVE FUTURE-FORWARD TRENDS
4. BRANDED LIVESTREAMING
HIGH EQUITY
CONVERT
LOW EQUITY
(Rent Audience)
(Retain Audience)
SALES
GROWTH
BRAND
Paid pitch-people like live-streaming star
Austin Li are capable of rallying fans to
flash sales and selling-out products in
minutes.
Livestream brand introductions and
product demos from KOL accounts can
boost overall product awareness and
improve credibility.
Institutionalized broadcasts
by brands (customer
service, product demos) -
elevates consideration, re-
enforces trust.
3rd Party KOLs/Media can
kick-start awareness,
interest in (a new) brand,
product …and/or widen
appeal to new segments.
KOL Livestream sales spark
the link between attention-
action, to generate quick
sales and …ideally establish
“hero products.”
Brand storytelling,
entertainment, interest-
based content creates
meaningful, lasting
engagement with audiences.
“Gucci Live” (left) is a livestreaming program
for personal shopping and product Q&A.
Beauty brands have institutionalized daily
Q&A, demo’s and service from “owned”
accounts.
Brand “moments” and digital events,
improve equity and DTC metrics.
LV’s SS’21 men’s fashion show was live-
streamed on Douyin, with 52m+ viewers.
5. RETAIL RE-IMAGINED
Given how overwhelmingly digital China’s retail
environment is (with 50%+ of sales being online), China is
completely re-imagining, re-inventing what omni-channel
retail looks like.
When all of your customers purchase online, then the role
of the physical retail space should change. Instead of
simply focusing on sales and merchandising, offline shops
are being repurposed as centers for customer
engagement and entertainment.
Many physical shops (eg. Ikea, Vans, Nike…) are starting to
feel like “theme parks” dedicated to hobby/interest areas,
with brand memorabilia, games/activities and product co-
creation (personalization).
Offline shops become marketing and engagement
centers - where the brand focuses energy around creating
“wow” moments with customers. The roles of offline and
online are getting flipped upside down. The online world
is distinctly transactional – highly efficient and accessible,
but lacking in meaningful interaction – while offline
spaces are where relationships with customers can
properly grow and form more intimately, and naturally.
The new formulas for offline retail in China are about; (1)linking
profiles to/from CRM systems, (2)using those profiles to make
shopping experiences more personal and interesting, (3)while
facilitating omni-channel sales and fulfillment options, (4)usually
supported by a focal AR feature for entertainment sake. These
efforts are as much about supporting conversions from online-to-
offline as they are about activating, attaining new followers offline.
Long-term the shop becomes more about experience and affinity
and less about sales.
Physical retail spaces will also play a critical role for large brands with DTC strategies. ‘Owned’ offline shops allow brands to
engage with customer and capture loyalty data. A growing number of retail brands over the past 3-5 years have been
restructuring retail operations to go “direct” - eliminating 3rd party retail firms as middlemen. In this context, physical retail may
provide brands with the customer data they need to be more “direct” online.
FIVE FUTURE-FORWARD TRENDS
TECH & TOOLS USED BY DTCS
MEDIA
PORTFOLIO
BRANDS MUST DEVELOP STRATEGIES
TO BALANCE FOUNDATIONAL
CHANNELS WITH EMERGING,
EXPERIMENTAL ONES.
For large, established brands, these newer channels present opportunities to
refresh identity and reconnect with customers on more approachable terms.
For DTCs, the focus with new channels should be about trying to create
breakthrough moments while reducing ad spend and CAC.
EARLY ADOPTERS
Small user base, deep
involvement from creators.
LATE MASS LATE PASSIVE
Hit maximum potential in
terms of audience #s..
Engagement % static.
EARLY MASS
Very quickly growing audience,
strong engagement.
Very low active engagement.
Audience #s in decline.
60%25%10%5%
EXPERIMENTAL
(BETS ON BIG WINS)
HIGH GROWTH
(ACQUISITION)
CORE CHANNEL
(LONG TERM ENGAGEMENT)
AUDIENCE SCALEPORTFOLIO
MEDIA PORTFOLIO PLANNING
NEW & NICHE
FACEBOOK
INSTAGRAM
SNAP
DISCORD
TIKTOK
YOUTUBE
WHATSAPP
MEDIA CHANNELS
APPS & OPS
TO WATCH
With the fixation on/for Facebook and other larger channels, a large number of
brands are systematically overlooking niche marketing opportunities.
New apps (especially those that share audiences/activities with the brand) offer
important value as experimental investments.
TIKTOK CREATOR MARKETPLACE
“BRANDED MISSION” CURRENTLY IN
TESTING (FULL RELEASE END OF 2022)
ENABLES BRANDS TO CROWDSOURCE
AN ARRAY OF CONTENT FROM
CREATORS ON TIKTOK.
“Branded Missions” posted by the brand are open to
creators on TikTok with a minimum of 1,000 followers.
Brands receive PGC videos, can turn them into ads and
boost them. Top creators are eligible for cash payments
as reward for successful videos.
The potential of this opportunity for brands is in giving
them access to much more branded creative. Using a
wider array of creators to tap into niche communities, on
terms that fit with the culture of those communities.
There’s the potential to unlock some breakthroughs,
while increasing penetration into a much wider set of
audiences.
Brands create a mission with
campaign parameters for Creators.
The mission is open to Creators.
TikTok tests for effectiveness and ‘brand
safety.’ Brand selects videos to be
sponsored & boosted.
PUBLIC RELATIONS
TRADITIONAL PR, ESPECIALLY FOR
EARLIER STAGE BRANDS CAN YIELD
CRITICAL LEAPS IN CREDIBILITY, TRUST
AND QUALIFIED ATTENTION.
As Bill Gates, Chairman of Microsoft was once quoted: “If
I was down to my last dollar, I would spend it on public
relations.” It’s free and can generate major breakthroughs.
Not all attention is created equal. While digital advertising
is measurable and clearly effective at driving traffic, the
results coming from these efforts often yield ‘dumb
traffic’ (people who have a quick look and move on
cause they do not know, understand or trust the brand
enough to buy). By contrast, PR, is hard to measure but
has the potential to generate significant brand equity.
As a general rule, the younger the brand, the more important PR can be
in making big gains. PR can have an outsized impact for smaller
(growth) brands. Conversely, the larger the brand, the more important
experimental channels are likely to be. Big gains from PR become
harder to achieve for larger brands, unless they are able to imbue
releases with growth-brand excitement (eg. Tesla).
There is a growing expectation that the modern CEO will be responsible for creating significant
PR (media) leverage for their businesses. A company leader who is also a creator/expert, is in a
position to rally media coverage for the brand, where it might otherwise be very challenging.
DISCORD
BRANDS SHOULD LOOK TO TAKE A
‘PRIVATE TRAFFIC’ APPROACH TO
DISCORD, UNLOCKING CONSIDERATION
WITH CRITICAL USER COHORTS.
Discord does not have any built-in advertising features,
but its rapid growth (350 million+ MAU) and dynamism
make it a high-potential environment - especially for
brands looking to grow with younger audience groups.
The first instinct of brands setting up on Discord, is to
create ‘branded servers’ (communities dedicated to their
brand). What they should be doing is using the platform
take a much more organic (guerilla-style) approach.
Brand should look to (1)setup topic/interest based
servers, and (2)seed quality content into 3rd party
servers, and (3)leverage influencers and key opinion
consumers (KOCs) to create brand relevant buzz.
In addition to promoting the business, brands should use Discord as a
tool for customer service by creating specific channels to house
answers to frequently asked questions, or where users can ask
questions and get answers from you or other active community
members on topics related to your products.
TECH/GAMES
VIDEO GAMES
GEAR & GADGETS
ESPORTS
DRONES
VR
This ‘private traffic’ (guerrilla style) approach to Discord should be taken with a clear picture
for audience cohorts in mind. Who are the major groups and who are the niche’s we want to
connect with? What can we share with them? What can we learn from/about them?
Interest-based Cohorts
WHATSAPP
WHATSAPP EMERGING AS CLEAR
LEADER IN CONVERSATIONAL
MARKETING GLOBALLY.
For most of the World, chat/messenger apps are the
equivalent of email - they are THE foundational
communications tool. According to Meta, more than 1.0
billion users connect with a business on its messaging
services each week. WhatsApp, with more than 2.0 billion
MAU is the clear leader across most of the globe.
WhatsApp has a growing set of solutions for businesses;
(1)SME’s mostly use the WhatsApp business app for
hosting customer chats, while (2)larger businesses, are
tapping into the ‘Cloud API’ (which is now available to all
businesses worldwide.
Marketing on WhatsApp is conversational (display ads are not available
to advertisers), with customer service/support and cultivating sales
being the mode of operations. Businesses on WhatsApp pay on a per-
message basis (with rates varying by geography and volume). This
method of social commerce is well-proven in China (with WeChat). And
the open rates on WhatsApp (80%+) dramatically out-perform email
open rates which are in the range of 20% (MailChimp 2021).
Bags brand Cheel uses QR codes to initiate
transactions (and customer engagement
at/after purchase).
Fashion brand Modanisa has chatbots for customer
service and ecommerce. 55% of customers using
the chatbot placed their first orders.
NEXTDOOR
NEXTDOOR COULD HELP BRANDS TO
SPARK GROWTH INTO NEW, LOCAL
COMMUNITIES.
DTC brands are challenged in being relatively biased to a
home town-city-state. Despite being digital-first, many
DTCs have sales which are skewed heavily toward HQ
(and/or areas with retail locations).
Local social networks like Nextdoor could help bridge
this gap by providing more geo-specific (cost effective)
communications to ‘jumpstart’ activity into new cities-
states/provinces. Businesses use Nextdoor to; share
special offers, run local deal ads, engage with community,
and gauge local brand reputation.
While Nextdoor is (for the most part) designed more around local
restaurants, services and shops, there are still opportunities for retail
brands to use it to support community growth into specific cities/
communities and facilitate word of mouth These efforts could precede
a physical store or be done side-by-side with a physical store launch. Nextdoor has an ads management dashboard. Costs for highly targeted ads on
Nextdoor offer savings when compared with Facebook and Google
POSHMARK
AS A LEADER IN SECONDHAND RETAIL,
POSHMARK MAY SEE AN UPTICK IF AN
ECONOMIC RECESSION HITS
CONSUMERS IN 2022-23.
Lucky Brand’s official “brand
closet” on Poshmark
Levi’s Secondhand approach to
reselling, focuses on sustainability
Poshmark has more than 80 million users. Its “Brand
Closet” allows big brands to sell directly on/thru the
platform. With this program, brands can sell limited-
edition products and get rapid customer feedback on
new, limited releases.
Poshmark touts the fact that many of its GenZ and
Millennial customers buy big name brands on its platform
for the first time. In this way, platforms like Poshmark offer
real potential for early stage discovery (by customers),
while allowing bigger brands to refresh their audience
cohorts (moving to younger, first-time buyer).
Large brands such as Nike, Lululemon, Patagonia, REI, Levis and a long
list of other major fashion labels have resale/trade-in/secondhand
programs. These programs combine severals objectives nicely, including;
sustainability, loyalty and new customer growth aims.
REGIONAL INSIGHTS
5
NORTH AMERICA
96
LATIN AMERICA
99
ASIA PACIFIC
102
EUROPE
105
OCEANIA
108
Most DTC brands have only begun to
explore their geographic potential. While
strong brands are drawing interest and
traffic from all corners of the Globe, there
is a great deal of work to turn this surface-
level attention into solid business traction.
If done correctly, internationalization can
provide growth brands with much
improved CAC/LTV metrics. There can be
a large gap between acquisition costs in
the US when compared with other
countries (even mature markets like
Europe often have much lower digital
costs than the US). As US digital channels
continue to become more crowded and
costly, overseas markets should become
ever more enticing. Amazon, Shopify and
others have made internationalization
much easier from a logistics perspective.
Research conducted in 2020 found that the majority of
sales, for DTC brands came from a home city - or a city
where a physical shop was located (77.% of brands sold
more than 50% in or near a headquarters or hub city).
The obvious insight is that most DTC brands are way
too local and need prioritize geographic expansion.
EXPANDING TO NEW GEOGRAPHIES
MARKETING COSTS/REGION
There are considerable opportunities for
growth brands to tap into lower marketing
costs by looking overseas, to new markets.
REGIONAL ANALYSIS
US$8
US$15
US$23
US$30
United States
Japan
Australia
Canada
Germany
Singapore
Hong Kong
United Kingdom
Taiwan
France
Italy
Malaysia
Thailand
Russia
Spain
Saudi Arabia
Vietnam
Turkey
Mexico
Brazil
India
Indonesia
Philippines
Pakistan
Egypt
2021 Q1 Average CPM
FACEBOOK ADS AVERAGE CPM BY COUNTRY
Reference: ADCostly
The majority of identifiable DTC
brands originate in North America.
77% of the Top 200 brands are from
this region.
This region is also (by far) the largest
in terms of shopper traffic for DTC
brands - with nearly 80% of all traffic
for the sample set of brands.
For brands in other regions, expansion to North
America may be a challenging proposition. Given
the level of competition and high costs of
advertising, it requires new brand entrants to be
strong operators with very distinct positioning/
products.
NORTH AMERICA
CANADA
UNITED
STATES
MEXICO
CUBA
THE BAHAMAS
BELIZE
HONDURAS
EL SALVADOR
COSTA RICA PANAMA
JAMAICA
HAITI DOMINICAN
REPUBLIC
PUERTO RICO (U.S)
7.4M
205.2M
1.3M
144.2K
63.6K
75.1K
33.2K
26.9K
24.8K
21.4K
13.1K
NICARAGUA
16.1K
GUATEMALA
3.9K
N. AMERICA
GDP (ppp): US$23.7 Trillion
Population: 579 Million
GDP per capita: US$45,560
Of total DTC traffic
is from this region
79.5
%
PRESENCE OF DTC BRANDS IN REGION VS GLOBAL
As measured by region-specific Web presence, per category
FASTEST GROWING DTC BRANDS FROM NORTH AMERICA
Measured by Web and Social Traffic from 2020 - 2022
NORTH AMERICA: BRANDS BY CATEGORY
Categories Where DTC Brands Are Penetrating
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
GROWTH (%)
728
Branch
Home & Kitchen
US
2018
30,345.8
563
Doe Lashes
Beauty & Cosmetics
US
2018
10,680.9
792
Partake
Food & Beverage
US
2016
2,759.6
1066
Kate Mcleod
Beauty & Cosmetics
US
2018
2,716.8
958
Huron
Beauty & Cosmetics
US
2019
1,888.0
304
Caraway
Home & Kitchen
US
2018
1,053.0
284
Pair Eyewear
Accessories
US
2017
1,035.5
206
Pillow Cube
Home & Kitchen
US
2019
940.2
674
Bala
Fitness/Sport/Outdoor
US
2018
928.5
620
Knickey
Fashion & Apparel
US
2017
883.3
659
West & Willow
Pet Care
US
NA
727.7
771
Thistle
Food & Beverage
US
2013
552.0
508
Ergatta
Fitness/Sport/Outdoor
US
NA
533.8
327
Superplastic
Toys & Hobby
US
2018
450.8
823
Saie
Beauty & Cosmetics
US
NA
441.4
497
Dôen
Fashion & Apparel
US
2016
411.9
549
Madhappy
Fashion & Apparel
US
2017
404.3
421
Thuma
Home & Kitchen
US
2017
372.1
556
Riley Home
Home & Kitchen
US
2018
339.3
180
Our Place
Home & Kitchen
US
2018
332.4
Accessories
Beauty & Cosmetics
Electronics
Fashion & Apparel
Fitness/Sports/Outdoor
Food & Beverage
Health & Wellness
Home & Kitchen
Mom & Baby
Pet Care
Toys & Hobby
0.6%
2.2%
2.8%
14.3%
12.0%
12.5%
2.1%
32.0%
0.9%
15.3%
5.4%
0.6%
2.2%
2.9%
14.3%
11.9%
12.7%
2.1%
31.5%
0.9%
15.6%
5.3%
Global
North America
DTC brands have
traffic from this region
95.5%
LATIN AMERICA
Latin America is the fourth placed
region for identifiable DTC brands.*
Only 1.5% of the Top 200 brands
originate from this region.
Latin America accounts for 0.63% of
Web traffic for the DTC brands within
our sample set.
From early analysis by Totem Media, reviewing
“Chinese brands going Global,” we found that Latin
America was a top target for Chinese brands. We
therefore expect that Latin America should hold
greater potential than this data suggests. 42.4% of
DTC brands from this report have traffic from Latin
America.
*Mexico was included into this region
PERU
ECUADOR
VENEZUELA
COLOMBIA
GUYANA
SURINAME
BRAZIL
BOLIVIA
PARAGUAY
CHILE
ARGENTINA
URUGUAY
104.3K
471.7K
427.2K
91.6K
TRINIDAD AND TOBAGO
73.4K
64.9K
63.6K
55.5K
14.2K
12.8K
933
5.7K
1.8K
LATIN AMERICA
GDP (ppp): US$6.567 Trillion
Population: 422 Million
GDP per capita: US$14,156
Of total DTC traffic
is from this region
0.63
%
PRESENCE OF DTC BRANDS IN REGION VS GLOBAL
FASTEST GROWING DTC BRANDS FROM LATIN AMERICA
Measured by Web and Social Traffic from 2020 - 2022
LATIN AMERICA: BRANDS BY CATEGORY
Categories Where DTC Brands Are Penetrating
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
GROWTH (%)
751
Dr. Jones
Beauty & Cosmetics
BR
2013
171.1
399
Cariuma
Fashion & Apparel
BR
2018
140.9
298
Viamo
Fashion & Apparel
AR
1988
22.0
531
Momiji Beauty
Beauty & Cosmetics
MX
2016
20.6
317
Ben and Frank
Accessories
MX
2015
18.2
223
Fantasias Miguel
Toys & Hobby
MX
1965
8.9
293
Sallve
Beauty & Cosmetics
BR
2018
8.4
375
Luuna
Home & Kitchen
MX
2015
5.5
166
Beyoung
Beauty & Cosmetics
BR
2015
-2.2
570
Acapella
Fashion & Apparel
MX
2013
-2.4
137
Mascara de Latex
Mom & Baby
MX
N/A
-3.3
52
Cuidado Con el Perro
Fashion & Apparel
MX
2004
-5.2
520
Pantys
Fashion & Apparel
BR
2017
-5.8
440
Havanna
Food & Beverage
AR
N/A
-6.2
168
Ricky Sarkany
Fashion & Apparel
AR
1985
-10.0
260
Cuesta Blanca
Fashion & Apparel
AR
1993
-20.7
104
Flexi
Fashion & Apparel
MX
1935
-21.4
264
Lola
Beauty & Cosmetics
BR
2011
-27.8
490
El Rey Palomo
Fashion & Apparel
MX
N/A
-30.0
342
Juanita Jo
Accessories
AR
N/A
-31.8
Accessories
Beauty & Cosmetics
Electronics
Fashion & Apparel
Fitness/Sport/Outdoor
Food & Beverage
Health & Wellness
Home & Kitchen
Mom & Baby
Pet Care
Toys & Hobby
0.8%
1.5%
2.0%
12.6%
13.1%
11.3%
2.3%
31.9%
2.0%
17.1%
5.5%
0.6%
2.2%
2.9%
14.3%
11.9%
12.7%
2.1%
31.5%
0.9%
15.6%
5.3%
Global
Latin America
DTC brands have
traffic from this region
42.4%
As measured by region-specific Web presence, per category
ASIA
Asia is the third placed region for
identifiable DTC brands. 6.5% of the
Top 200 brands originate from this
region.
Asia accounts for 4.64% of Web traffic
for the DTC brands within our sample
set.
Asia shows high potential for brand expansion, as
86.9% of brands have some traffic already coming
from this region. Asia is also a very high growth
region in general, so investments into Asia also are
likely to enjoy the benefit of rapidly improving
macro-economic conditions.
Most of the region has significantly lower ad costs
than the US or EU (China and Japan being
exceptions). The challenge is, for many of the lower
cost regions (eg. Indonesia), there may be a smaller
cohort of affluent consumers. Therefore, brands
need to select regions and cohorts carefully.
MONGOLIA
IRAN
AFGHANISTAN
NEPAL
MALDIVES
SAUDI ARABIA
OMAN
JAPAN
CHINA
JAPAN
INDIA
MALAYSIA
PHILIPPINES
THAILAND
VIETNAM
INDONESIA
SOUTH KOREA
SINGAPORE
PAKISTAN
HONG KONG
BANGLADESH
KAZAKHSTAN
UZBEKISTAN
SRI LANKA
TAIWAN
CAMBODIA
MYANMAR
RUSSIA
320.3K
6.8M
1.4M
616.1K
440.1K
381.0K
303.1K
261.2K
196.5K
4.5K
126.2K
194.5K
77.3K
129.3K
101.0K
72.7K
5.8K
2.9K
11.2K
664.1K
6.6K
7.5K
ASIA
GDP (ppp): $65.44 Trillion
Population: 4.5 Billion
GDP per capita: $7,351
Of total DTC traffic
is from this region
4.64
%
PRESENCE OF DTC BRANDS IN REGION VS GLOBAL
FASTEST GROWING DTC BRANDS FROM ASIA
Measured by Web and Social Traffic from 2020 - 2022
ASIA: BRANDS BY CATEGORY
Categories Where DTC Brands Are Penetrating
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
GROWTH (%)
906
Sleepy Owl
Food & Beverage
IN
2016
602.8
50
BoAT
Electronics
IN
2016
165.6
656
Sleepy Cat
Home & Kitchen
IN
2017
109.3
2
Shein
Fashion & Apparel
SG
2012
90.0
128
Wakefit
Home & Kitchen
IN
2014
63.8
1082
Leaders
Beauty & Cosmetics
KR
2004
52.4
521
Native Union
Accessories
HK
2009
41.5
687
Vadham Teas
Food & Beverage
IN
2015
35.6
132
MyGlamm
Beauty & Cosmetics
IN
2015
32.0
57
Lenskart
Accessories
IN
2008
29.8
503
Base Food
Food & Beverage
JP
2016
25.5
103
Go Noise
Electronics
IN
2014
22.2
412
Melorra
Accessories
IN
2015
16.0
501
Country Delight
Food & Beverage
IN
2015
15.7
352
Etvos
Beauty & Cosmetics
JP
2007
11.0
665
Fabric Tokyo
Fashion & Apparel
JP
2012
10.5
10
Infinix
Electronics
CN
2013
10.1
205
Lilysilk
Fashion & Apparel
CN
2010
5.3
485
Cohina
Fashion & Apparel
JP
NA
3.8
195
Ugreen
Electronics
CN
2012
1.3
Accessories
Beauty & Cosmetics
Electronics
Fashion & Apparel
Fitness/Sport/Outdoor
Food & Beverage
Health & Wellness
Home & Kitchen
Mom & Baby
Pet Care
Toys & Hobby
0.4%
2.1%
3.1%
13.8%
11.8%
13.0%
2.2%
32.1%
1.0%
15.8%
4.8%
0.6%
2.2%
2.9%
14.3%
11.9%
12.7%
2.1%
31.5%
0.9%
15.6%
5.3%
Global
Asia
DTC brands have
traffic from this region
86.9%
*IN = India
As measured by region-specific Web presence, per category
EUROPE
Europe is the second leading region as
a source for DTC brands. 13% of the
Top 200 brands originate from this
region.
Europe accounts for 13.9% of Web
traffic for the DTC brands within our
sample set.
Europe shows high potential for brand expansion,
as 91.5% of brands have some traffic already
coming from this region.
Fewer competitors and lower ad costs (in most
countries), support opportunities for brands
coming from more expensive areas (eg. US).
IRELAND
UNITED
KINGDOM
PORTUGAL
BELGIUM
NETHERLANDS
DENMARK
NORWAY
SWEDEN
FINLAND
ESTONIA
LATVIA
LITHUANIA
UKRAINE
ROMANIA
SWITZERLAND AUSTRIA SLOVAKIA
CZECH REP
HUNGARY
BULGARIA
GREECE
CROATIA
SERBIA
SLOVENIA
MACEDONIA
FRANCE
GERMANY
SPAIN
ITALY
RUSSIA
POLAND
TURKEY
13.4M
4.0M
3.6M
2.5M
1.9M
1.3M
1.1M
697.3K
606.7K
179.7K
120.0K
206.4K
203.0K
277.0K
339.2K
320.3K
81.0K
536.1K
109.2K
461.4K
426.3K
504.0K
713.3K
182.6K
40.3K
45.0K
102.4K
24.8K
34.2K
449.0K
45.8K
113.8K
BELARUS
EUROPE
GDP (ppp): US$26.7 Trillion
Population: 748 Million
GDP per capita: US$27,330
Of total DTC traffic
is from this region
13.9%
PRESENCE OF DTC BRANDS IN REGION VS GLOBAL
FASTEST GROWING DTC BRANDS FROM EUROPE
Measured by Web and Social Traffic from 2020 - 2022
EUROPE: BRANDS BY CATEGORY
Categories Where DTC Brands Are Penetrating
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
GROWTH (%)
931
The Stem
Home & Kitchen
GB
2019
9,516.2
502
Sister Jane
Fashion & Apparel
GB
2011
2,974.4
988
Vaay
Health & Wellness
DE
2018
2,354.3
572
Cole Buxton
Fashion & Apparel
GB
2014
2,104.3
417
FLO Vitamins
Health & Wellness
GB
2016
1,967.0
416
Sheep Inc.
Fashion & Apparel
GB
2018
1,126.3
406
Sunspel
Fashion & Apparel
GB
1860
605.3
300
Paloma Wool
Fashion & Apparel
ES
2014
385.0
311
Percival Menswear
Fashion & Apparel
GB
2009
375.1
637
OAS
Fashion & Apparel
SE
N/A
323.3
532
Passenger Clothing
Fashion & Apparel
GB
2012
310.2
120
Pangaia
Fashion & Apparel
GB
2018
309.3
635
Babaá
Fashion & Apparel
ES
2012
305.8
528
kencko
Food & Beverage
PT
2016
292.1
149
Dossier
Beauty & Cosmetics
NO
2000
283.3
980
Mr. Marvis
Fashion & Apparel
NL
2016
262.0
518
Gisou
Beauty & Cosmetics
NL
2015
195.5
265
VANMOOF
Fitness/Sports/Outdoor
NL
2009
183.4
470
Pasta Evangelists
Food & Beverage
GB
2016
182.2
907
Heights
Health & Wellness
GB
2018
171.6
Accessories
Beauty & Cosmetics
Electronics
Fashion & Apparel
Fitness/Sport/Outdoor
Food & Beverage
Health & Wellness
Home & Kitchen
Mom & Baby
Pet Care
Toys & Hobby
0.4%
2.1%
3.1%
13.8%
11.8%
13.0%
2.2%
32.1%
1.0%
15.8%
4.8%
0.6%
2.2%
2.9%
14.3%
11.9%
12.7%
2.1%
31.5%
0.9%
15.6%
5.3%
Global
Europe
DTC brands have
traffic from this region
91.5%
As measured by region-specific Web presence, per category
OCEANIA
Oceania is the fifth placed region for
identifiable DTC brands. 2.0% of the
Top 200 brands originate from this
region.
Oceania accounts for 1.05% of Web
traffic for the DTC brands within our
sample set.
Oceania shows modest potential for brand
expansion, as 61.5% of brands have some traffic
already coming from this region. The region is
however very small, with Australia (25.7 million)
being the largest country.
TUVALU
PAPUA NEW GUINEA
SOLOMON
ISLANDS
NAURU
KIRIBATI
FUJI
VANUATU
TONGA
NEW
CALEDONIA
(FRANCE)
AUSTRALIA
26
NEW ZEALAND
11
OCEANIA
GDP (ppp): US$1.67 Trillion
Population: 38 Million
GDP per capita: US$22,647
Totem Database (n = 213 Brands)
Of total DTC traffic
is from this region
1.05
%
PRESENCE OF DTC BRANDS IN REGION VS GLOBAL
FASTEST GROWING DTC BRANDS FROM OCEANIA
Measured by Web and Social Traffic from 2020 - 2022
OCEANIA: BRANDS BY CATEGORY
Categories Where DTC Brands Are Penetrating
Accessories
Beauty & Cosmetics
Electronics
Fashion & Apparel
Fitness/Sport/Outdoor
Food & Beverage
Health & Wellness
Home & Kitchen
Mom & Baby
Pet Care
Toys & Hobby
0.4%
1.9%
1.7%
14.4%
10.8%
12.3%
2.3%
33.6%
1.4%
15.9%
5.4%
0.6%
2.2%
2.9%
14.3%
11.9%
12.7%
2.1%
31.5%
0.9%
15.6%
5.3%
Global
Oceania
DTC brands have
traffic from this region
61.5%
RANK
COMPANY
CATEGORY
COUNTRY
FOUNDED
GROWTH (%)
463
PE nation
Fashion & Apparel
AU
2016
260.8
246
Who Gives A Crap
Beauty & Cosmetics
AU
2012
96.1
533
Assembly Label
Fashion & Apparel
AU
2011
81.6
962
Coffee Supreme
Food & Beverage
NZ
1993
63.1
55
Princess Polly
Fashion & Apparel
AU
2010
38.9
343
Ace & Tate
Accessories
AU
1962
29.9
519
Orbit Key
Accessories
AU
2013
17.5
756
The Beauty Chef
Health & Wellness
AU
2012
13.5
860
Good Pair Days
Food & Beverage
AU
2015
2.8
129
Aesop
Beauty & Cosmetics
AU
1987
1.2
330
Frank Body
Beauty & Cosmetics
AU
2013
-0.3
278
Koala Mattress
Home & Kitchen
AU
2015
-3.0
279
BROSA
Home & Kitchen
AU
2014
-3.1
831
Karst
Home & Kitchen
AU
2016
-4.9
143
Black Milk
Fashion & Apparel
AU
2009
-7.4
1107
Strange Love Soda
Food & Beverage
AU
2011
-16.3
940
Bailey Nelson
Accessories
AU
2012
-17.4
119
Hi Smile
Beauty & Cosmetics
AU
2014
-22.3
426
Maap
Fashion & Apparel
AU
2014
-34.2
As measured by region-specific Web presence, per category
Chris Baker, Founder
Email: chris@hiparray.com
www.hiparray.com
SCALING BRANDS INTO
NEW MARKETS
HipArray works with both DTC brands
and incumbent (leaders) globally on
brand strategy, business intelligence
solutions and growth.
Our clients range across industries,
including; retail, fashion, beauty, travel,
entertainment.
Projects for our clients address critical
issues including; new markets entry,
corporate development and M&A
advisory, digital capabilities/innovation,
brand strategy/positioning, category
design and data insights/analysis.
www.hiparray.com
ABOUT HIPARRAY - WHAT WE DO
HipArray’s Global Database of DTC brands. Global data visualization & analysis, brand & sales growth
