by DTC brands look to make inroads in brick-and-mortar stores, seeing opportunity for revenue growth, brand exposure
Purple. Casper. Ghostbed. Helix.
What do all of these brands have in common?
They all started as primarily direct-to-consumer brands and have now made a serious commitment to brick-and-mortar retailers.
The evidence was apparent at Las Vegas Market, where these online players have opened showrooms in an effort to reach retailers who can bring their products to physical stores.
As part of an omnichannel approach, many of these companies have realized that selling online alone is not enough. People want to shop — or at least look at product in person — in stores, so that’s where they need to be.
That’s a tricky question considering how DTC companies affected retailers in the past. They essentially stole business from brick-and-mortar stores, but now they want to be partners.
Some retailers are highly skeptical, and some I’ve talked to have said DTC companies will never succeed in physical stores.
How do DTC companies make good with retailers after stealing business?
One way I’ve seen is promotion of brand recognition. Major DTC brands are as well-known as Band-Aid and GE, and they claim that they can drive traffic to a retailer’s store with their impressive SEO.
That may be true, and it’s going to be a hurdle for them to connect with some retailers who are turned off at the idea of carrying these brands in their stores.
But ultimately, I think a paradigm shift (a fundamental change of approach) has been happening in the industry and will continue as retailers either accept partnerships with DTC brands or compete against those who do carry them.
The first part of this shift was DTC players dominating the online space. But now that they’ve conquered that front they are realizing it’s not enough.
Data shows that people want to go to stores to see and feel the product in person. Even if they end up buying online after shopping in a store, the need for a physical space to show product has become more important that ever.
As a critical part of their overall strategy, DTC brands are creating special and exclusive products for retailers to help set them apart from what’s online. Others have a revenue share system where they offer retailers a percentage of the sale if a person comes into the store but ultimately buys online at a later date.
The convergence of DTC companies and brick-and-mortar retailers will change the entire dynamic of the industry — hopefully for the better — and the game is on.
